Meridian Funds, managed by ArrowMark Partners, released its first-quarter 2026 investor letter for “Meridian Contrarian Fund”. The Fund aims to invest in undervalued companies with clear catalysts for sustainable improvement. A copy of the letter can be downloaded here. The US equities market started 2026 with volatility driven by trade policy uncertainty and heightened geopolitical risks. Early-period gains were attributed to confidence in domestic companies and to the Federal Reserve easing. However, sentiment deteriorated following increased tariffs and military strikes by the U.S. and Israel against Iran. During the quarter, Meridian Contrarian Fund returned 1.10% compared to the Russell 2500 Growth Index’s 2.04% return and its secondary benchmark, the Russell 2500 Value Index’s 4.77% return. 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 Contrarian Fund highlighted Klarna Group plc (NYSE:KLAR). Klarna Group plc (NYSE:KLAR) is a digital bank and flexible payments company that provides payment solutions, pay-later options, and fair financing. On June 26, 2026, Klarna Group plc (NYSE:KLAR) closed at $20.29 per share, reflecting a market capitalization of $7.71 billion. Klarna Group plc (NYSE:KLAR) posted a one-month return of -13.13%, while its shares gained 62.26% over the past three months.
Meridian Contrarian Fund stated the following regarding Klarna Group plc (NYSE:KLAR) in its Q1 2026 investor letter:
“Klarna Group plc (NYSE:KLARC) is the global leader in the buy-now-pay later (BNPL) payments platform. The fund started our position this quarter, and shares sold off after management issued cautious guidance that showed Klarna’s growth was above expectations, but in a newer US credit product that delays the profitability path. Regulatory headlines in both the U.S. and EU around tighter consumer-lending rules further pressured sentiment, overshadowing continued user growth and higher merchant adoption. We remain constructive on Klarna’s long term opportunity to monetize its large user base and expand into broader payment and shopping services; we kept our position size modest to reflect elevated regulatory and credit cycle risk as the company works through these headwinds.”
Klarna Group plc (NYSE:KLAR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 40 hedge fund portfolios held Klarna Group plc (NYSE:KLAR) at the end of the first quarter, compared to 44 in the previous quarter. While we acknowledge the risk and potential of Klarna Group plc (NYSE:KLAR) 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 Klarna Group plc (NYSE:KLAR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Klarna Group plc (NYSE:KLAR) and shared the list of best growth stocks under $30 to buy. 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.
