Madison Investments, an investment advisor, released its first-quarter 2026 investor letter for the “Madison Large Cap Fund”. A copy of the letter is available to download here. The Madison Large Cap Fund (Class I) declined 2.7% in the quarter, outperforming the S&P 500’s -4.33% return. The fund focuses on long-term capital appreciation. The quarter saw a shift in the equity market beyond the mega-cap technology stocks into physical economy stocks, influenced by fears of AI disruption. Additionally, rising commodity prices due to the Middle East conflict reignited inflation concerns, benefiting sectors such as Energy, Materials, Utilities, Staples, and Real Estate, which the Fund does not invest in, impacting its relative performance. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Madison Large Cap Fund highlighted Starbucks Corporation (NASDAQ:SBUX). Based in Seattle, Washington, Starbucks Corporation (NASDAQ:SBUX) is a leading coffee company and coffeehouse chain. On June 15, 2026, Starbucks Corporation (NASDAQ:SBUX) closed at $101.59 per share. One-month return of Starbucks Corporation (NASDAQ:SBUX) was -4.50%, and its shares gained 10.92% over the past 52 weeks. Starbucks Corporation (NASDAQ:SBUX) has a market capitalization of $115.78 billion.
Madison Large Cap Fund stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q1 2026 investor letter:
“The investment we sold was Starbucks Corporation (NASDAQ:SBUX) , a specialty coffee restaurant chain. We are encouraged by CEO Brian Niccol’s turnaround plan and believe margins will materially increase over the coming years. However, in our view, the valuation already incorporates healthy margin expansion and revenue growth. Thus, there is little room for error if it takes longer for margins to improve or sales growth has a hiccup, so we elected to sell our shares.”
Starbucks Corporation (NASDAQ:SBUX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 65 hedge fund portfolios held Starbucks Corporation (NASDAQ:SBUX) at the end of the first quarter, up from 59 in the previous quarter. While we acknowledge the risk and potential of Starbucks Corporation (NASDAQ:SBUX) 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 STARBUCKS CORPORATION (NASDAQ:SBUX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Starbucks Corporation (NASDAQ:SBUX) and shared a bullish thesis on the company. 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.
