Sands Capital Management, LLC released its Q1 2026 investor letter for its “Select Growth Strategy”. A copy of the letter is available to download here. Select Growth mainly targets leading U.S. businesses, driving positive structural changes. U.S. large-cap growth stocks fell in the first quarter. Sharp dispersion driven by AI advances marked the quarter, but late in the quarter, geopolitical tensions with Iran caused a broad-based risk-off move across the market. AI continued to influence market behavior, with AI-related investments increasing dispersion and shifting capital to asset-heavy sectors benefiting from AI infrastructure demand, which faced less disruption risk. While equities struggled, corporate fundamentals remained strong. Select Growth underperformed the Russell 1000 Growth Index, returning -12.9% vs. -9.8%, due to concerns about AI disruption affecting sector and stock choices. The Strategy’s focus on higher-growth, asset-light, service businesses faced challenges as markets rotated toward more capital-intensive, lower-risk sectors. Underweights in cyclical and defensive sectors slightly hurt relative results amid the broader market shift. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Sands Capital Select Growth Strategy highlighted Carvana Co. (NYSE:CVNA). Carvana Co. (NYSE:CVNA) is a US-based used car retailer that operates an e-commerce platform. On June 8, 2026, Carvana Co. (NYSE:CVNA) closed at $69.45 per share. One-month return of Carvana Co. (NYSE:CVNA) was -5.79%, and its shares gained 2.58% over the past 52 weeks. Carvana Co. (NYSE:CVNA) has a market capitalization of $76.17 billion.
Sands Capital Select Growth Strategy stated the following regarding Carvana Co. (NYSE:CVNA) in its Q1 2026 investor letter:
“Carvana Co. (NYSE:CVNA) is the world’s largest ecommerce used car retailer by revenue. Shares of the business declined after fourth quarter profitability failed to meet expectations, driven by a lower-than-expected gross profit per unit in retail. Our research indicates the miss was driven by three primary factors, including lower shipping fees due to greater retail density, industry car depreciation, and less efficient reconditioning at newly acquired sites. Absolute results were strong, with units and revenues increasing 43 percent and 58 percent year over year, respectively. In our view, outsized intra-year volatility is within expectations for Carvana and as such, we believe the business is attractively valued relative to our expectation for it to compound earnings by over 40 percent over the next three years.”
Carvana Co. (NYSE:CVNA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 79 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the first quarter, compared to 100 in the previous quarter. In Q1 2026, Carvana Co. (NYSE:CVNA) reported revenue of $6.432 billion, marking an increase of 52% from Q1 2025. While we acknowledge the risk and potential of Carvana Co. (NYSE:CVNA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Carvana Co. (NYSE:CVNA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Carvana Co. (NYSE:CVNA) and shared Optimist Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
