RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” Q1 2026 investor letter. A copy of the letter can be downloaded here. The US stock market declined in the quarter with the S&P 500 index (“S&P”) and the Russell 1000 Growth index (“RLG”) falling 4.33% and 9.78%, respectively. Markets started the year positively but became volatile mainly due to increased tensions with Iran. The Federal Reserve kept rates unchanged in January and February. Still, rising energy prices and weaker economic data sparked concerns about stagflation, leading investors to rethink the timing and scale of future rate cuts. Investor sentiment shifted from growth and tech stocks amid inflation, interest rate, and supply chain concerns. Opposing AI-driven rotations heavily influenced investor sentiment, affecting growth stocks—enthusiasm grew for semiconductor firms linked to AI infrastructure spending, while enterprise software companies, viewed as vulnerable to AI disruption, faced pessimism. The Fund’s software holdings were sold off heavily, while the underweight in semiconductor companies, which benefited most from AI infrastructure spending, affected the performance. Despite challenges, the firm remains confident in the long-term prospects and valuations of its portfolio companies. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, RiverPark Large Growth Fund highlighted Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) is a leading cloud computing and software company that provides an observability and security platform for cloud applications. On July 7, 2026, Datadog, Inc. (NASDAQ:DDOG) closed at $256.81 per share, reflecting a market capitalization of $91.41 billion. Datadog, Inc. (NASDAQ:DDOG) posted a one-month return of 12.82%, while its shares gained 79.90% over the past 52 weeks.
RiverPark Large Growth Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q1 2026 investor letter:
“Furthermore, for the software companies we own, the evidence suggests AI is driving new business rather than destroying existing revenue. Datadog, Inc. (NASDAQ:DDOG), which monitors the AI infrastructure being built by hyperscalers and enterprises alike, reported 32% revenue growth, accelerating from 29% last quarter, with new logo bookings setting an all-time record. The AI gold rush is not disintermediating Datadog; it is providing its fastest-growing source of new customers.”
Datadog, Inc. (NASDAQ:DDOG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 80 hedge fund portfolios held Datadog, Inc. (NASDAQ:DDOG) at the end of the first quarter, up from 75 in the previous quarter. While we acknowledge the risk and potential of Datadog, Inc. (NASDAQ:DDOG) 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 Datadog, Inc. (NASDAQ:DDOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Datadog, Inc. (NASDAQ:DDOG) and shared the list of AI stocks on Wall Street’s radar. 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.
