Fred Alger Management, an investment management company, released its “Alger Small Cap Focus Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the Class A shares of the Alger Small Cap Fund underperformed the Russell 2000 Growth Index. The Information Technology and Consumer Discretionary sectors contributed to the performance, while Health Care and Energy detracted from the performance. US equities experienced a volatile period in the first quarter of 2026, driven by AI disruption and the U.S.-Iran conflict that began in late February. The Fund identifies opportunities in companies that are adopting and facilitating the technology as it evolves into an agentic phase while navigating AI disruption challenges. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Alger Small Cap Focus Fund highlighted stocks like GeneDx Holdings Corp. (NASDAQ:WGS). GeneDx Holdings Corp. (NASDAQ:WGS) is a genomics company that offers pediatric and rare disease diagnostics services. On May 1, 2026, GeneDx Holdings Corp. (NASDAQ:WGS) closed at $65.38 per share. One-month return of GeneDx Holdings Corp. (NASDAQ:WGS) was -1.85%, and its shares gained 2.46% over the past 52 weeks. GeneDx Holdings Corp. (NASDAQ:WGS) has a market capitalization of $1.92 billion.
Alger Small Cap Focus Fund stated the following regarding GeneDx Holdings Corp. (NASDAQ:WGS) in its Q1 2026 investor letter:
“GeneDx Holdings Corp. (NASDAQ:WGS) is a specialty genomics laboratory focused on delivering complex genetic tests, including whole exome and genome sequencing, to diagnose pediatric rare diseases. The company possesses a comprehensive and proprietary database of genetic data that enables it to deliver superior diagnostic yields relative to competitors and alternative testing modalities, creating a meaningful competitive advantage in a highly specialized market. During the quarter, shares detracted from performance driven by two primary factors. First, while the company reported fiscal fourth quarter revenue above analyst estimates, the magnitude of the upside was lower than investors anticipated as average selling prices per test remained steady on a sequential basis. Second, the launch of a competing genomics assay by a well-known diagnostics peer introduced concerns around potential market share erosion in the rare disease testing space. Despite these headwinds, we believe GeneDx’s established market access and the depth of its genomic database represent a durable competitive moat.”
GeneDx Holdings Corp. (NASDAQ:WGS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 39 hedge fund portfolios held GeneDx Holdings Corp. (NASDAQ:WGS) at the end of the fourth quarter, up from 34 in the previous quarter. While we acknowledge the risk and potential of GeneDx Holdings Corp. (NASDAQ:WGS) 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 GeneDx Holdings Corp. (NASDAQ:WGS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered GeneDx Holdings Corp. (NASDAQ:WGS) and shared the list of best diagnostics and research stocks to buy according to analysts. 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.
