ClearBridge Investments, a global equity manager, recently published first-quarter 2026 commentary for its “Mid Cap Strategy”. A copy of the letter can be downloaded here. Mid-cap stocks showed strong performance in Q1, with the Russell Midcap Index rising 1.3%, outperforming both large-cap and small-cap stocks. In contrast, large-cap equities dropped 4.2%, while small-caps increased by only 0.9%; this dynamic suggested broadening in market leadership. Though investor concerns about the US-Israel-Iran conflict influenced mid-cap stocks, their performance was more focused on company fundamentals and sector trends. However, the ClearBridge Mid Cap Strategy underperformed its benchmark due to challenges in the IT, health care, and consumer discretionary sectors. The Strategy focuses on the consumer discretionary sector, acquiring firms that can perform in a variety of circumstances while being adaptable as the environment changes. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, ClearBridge Mid Cap Strategy highlighted stocks like Chewy, Inc. (NYSE:CHWY). Chewy, Inc. (NYSE:CHWY) is an online retailer of pet food and treats, supplies, and pet healthcare products, as well as pet services. On April 9, 2026, Chewy, Inc. (NYSE:CHWY) closed at $26.00 per share. One-month return of Chewy, Inc. (NYSE:CHWY) was 2.08%, and its shares lost 24.99% over the past 52 weeks. Chewy, Inc. (NYSE:CHWY) has a market capitalization of $10.83 billion.
ClearBridge Mid Cap Strategy stated the following regarding Chewy, Inc. (NYSE:CHWY) in its Q1 2026 investor letter:
“Several of our consumer discretionary holdings faced both macro and company-specific challenges. Chewy, Inc. (NYSE:CHWY), a leading online retailer of pet products, and Churchill Downs, an operator of gaming and entertainment assets — including the Kentucky Derby — were among the weaker performers during the quarter. Chewy’s stock has drifted lower recently in response to its in-line results and continued investment in the business.”
Chewy, Inc. (NYSE:CHWY) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 56 hedge fund portfolios held Chewy, Inc. (NYSE:CHWY) at the end of the fourth quarter, compared to 57 in the previous quarter. While we acknowledge the risk and potential of Chewy, Inc. (NYSE:CHWY) 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 Chewy, Inc. (NYSE:CHWY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Chewy, Inc. (NYSE:CHWY) and shared the list of most active mid-cap stocks to invest in. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
