Janus Henderson Investors, an investment management company, released its “Forty Fund” Q2 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned 19.00% in the second quarter of 2026, outperforming the Russell 1000 Growth Index’s 16.74% gain as strong stock selection and an overweight position in healthcare supported results. The firm said resilient economic growth, robust corporate earnings, easing geopolitical tensions that pushed crude oil below $75 per barrel, and continued AI investment supported markets, although the Federal Reserve kept interest rates unchanged as inflation remained elevated. It added that AI-related opportunities remain a key driver of its outlook, noting demand for AI computing power is expected to exceed supply for the foreseeable future, while one portfolio holding reported revenue growth of more than 30% year over year, and another has an AI-related contracted orders backlog exceeding $550 billion. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Janus Henderson’s Forty Fund highlighted stocks like Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) is a cloud monitoring and security company that helps businesses track the performance of their applications, infrastructure, and digital systems. The one-month return of Datadog, Inc. (NASDAQ:DDOG) was 8.39% while its shares traded between $98.01 and $278.75 over the last 52 weeks. On July 31, 2026, Datadog, Inc. (NASDAQ:DDOG) stock closed at approximately $267.97 per share, with a market capitalization of about $98.633 billion.
Janus Henderson’s Forty Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q2 2026 investor letter:
In the information technology sector, top performers included several companies benefiting from increased AI-related spending. Datadog, Inc. (NASDAQ:DDOG) provides observability and infrastructure monitoring solutions that help AI and cloud-based applications run more efficiently, without downtime or latency issues. Demand for these solutions has continued to grow as more AI workflows move onto the cloud, and Datadog has solidified its market leadership in observability through successful collaborations with significant AI-oriented clients. Revenue grew more than 30% year-over-year in the first quarter, exceeding market expectations. The company also raised guidance as it signaled the potential for continued business acceleration.
Datadog, Inc. (NASDAQ:DDOG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 80 hedge fund portfolios held Datadog, Inc. (NASDAQ:DDOG) at the end of the first quarter, which was 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.
