Rowan Street Capital, an investment management company, released its Q1 2026 investor letter. A copy of the letter can be downloaded here. The first quarter of 2026 left investors with plenty of concerns. Rising tensions in the Middle East have driven oil prices up, reigniting inflation concerns and delaying a shift to lower interest rates. Markets are narrative-driven, suggesting that high borrowing costs hinder growth, while skepticism grows about the immediate returns of AI. Investors are increasingly favoring energy and cyclical sectors, as they seek stable cash flows. Additionally, there are fears that AI could disrupt software companies, potentially making current leaders obsolete. In this turbulent market landscape, Rowan Street declined 19.8%, compared to a 4.3% decline for the S&P 500. The firm is not happy with the results. Rowan Street invests in a focused group of businesses expected to compound value over the long term, even amid short-term stock price volatility due to higher interest rates and a shift in investor focus. The fundamentals of these businesses remain strong, despite recent declines in stock prices, reflecting changes in price multiples rather than deteriorating business performance. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Rowan Street Capital highlighted stocks like Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META), the parent company of dominant social media platforms, is a multinational technology company that develops products to connect people. On April 17, 2026, Meta Platforms, Inc. (NASDAQ:META) closed at $688.55 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was 13.99%, and its shares gained 42.07% over the past 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $1.75 trillion.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q1 2026 investor letter:
“Meta Platforms, Inc. (NASDAQ:META): Meta has delivered a cumulative return of approximately 1,300% since its IPO, or about 21% annually. The path to those returns, however, has been anything but smooth.
Over the past decade, the stock has experienced numerous drawdowns of 30% or more several declines of 50% or more, and, most notably, a decline of nearly 80% in 2022.
These periods were not isolated events — they were a recurring feature of owning t business. And yet for those who remained focused on the underlying fundamentals, the long-term outcome has been exceptional….” (Click here to read the full text)
Meta Platforms, Inc. (NASDAQ:META) holds 5th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 256 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the fourth quarter, compared to 273 in the previous quarter. While we acknowledge the risk and potential of Meta Platforms, Inc. (NASDAQ:META) 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 Meta Platforms, Inc. (NASDAQ:META) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Meta Platforms, Inc. (NASDAQ:META) and shared the list of best major stocks to buy according to Wall Street 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.
