Meridian Funds, managed by ArrowMark Partners, released its first-quarter 2026 investor letter for “Meridian Growth Fund”. A copy of the letter can be downloaded here. The US equity market started 2026 with volatility due to trade policy uncertainty and geopolitical risks. Initial optimism from domestic company confidence and the Federal Reserve easing waned following increased tariffs and military strikes against Iran. The value outperformed across the entire market-cap spectrum. Against this backdrop, the Meridian Growth Fund (the “Fund”) returned -7.90%, trailing the Russell 2500 Growth Index benchmark, which returned -3.52%. The underperformance was driven by industry allocation effects, while stock selection was a meaningful positive contributor. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Meridian Growth Fund highlighted stocks like DraftKings Inc. (NASDAQ:DKNG). DraftKings Inc. (NASDAQ:DKNG) is an American digital sports entertainment and gaming company. On May 21, 2026, DraftKings Inc. (NASDAQ:DKNG) closed at $25.40 per share. One-month return of DraftKings Inc. (NASDAQ:DKNG) was 7.51%, and its shares lost 32.33% over the past 52 weeks. DraftKings Inc. (NASDAQ:DKNG) has a market capitalization of $11.86 billion.
Meridian Growth Fund stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its Q1 2026 investor letter:
“DraftKings Inc. (NASDAQ:DKNG) is a leading digital sports entertainment and gaming company operating across online sportsbook and iGaming platforms. The company is leveraging its scale, technology, and brand to drive profitable growth as sports betting legalizes across additional states. Shares declined sharply during the quarter after management provided cautious revenue guidance that fell meaningfully below consensus expectations, reigniting concerns about emerging competition from prediction markets. We believe the guidance conservatism is deliberate, reflecting management’s effort to return to a consistent beat-and-raise cadence, and that the long-term opportunity in online gaming and prediction markets remains substantial.”
DraftKings Inc. (NASDAQ:DKNG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 72 hedge fund portfolios held DraftKings Inc. (NASDAQ:DKNG) at the end of the fourth quarter, up from 68 in the previous quarter. While we acknowledge the risk and potential of DraftKings Inc. (NASDAQ:DKNG) 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 DraftKings Inc. (NASDAQ:DKNG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered DraftKings Inc. (NASDAQ:DKNG) and shared the list of best low priced growth 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.
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Disclosure: None. This article is originally published at Insider Monkey.
