Sands Capital Management, LLC released its Q1 2026 investor letter for its “Select Growth Strategy”. A copy of the letter is available to download here. Select Growth mainly targets leading U.S. businesses, driving positive structural changes. U.S. large-cap growth stocks fell in the first quarter. Sharp dispersion driven by AI advances marked the quarter, but late in the quarter, geopolitical tensions with Iran caused a broad-based risk-off move across the market. AI continued to influence market behavior, with AI-related investments increasing dispersion and shifting capital to asset-heavy sectors benefiting from AI infrastructure demand, which faced less disruption risk. While equities struggled, corporate fundamentals remained strong. Select Growth underperformed the Russell 1000 Growth Index, returning -12.9% vs. -9.8%, due to concerns about AI disruption affecting sector and stock choices. The Strategy’s focus on higher-growth, asset-light, service businesses faced challenges as markets rotated toward more capital-intensive, lower-risk sectors. Underweights in cyclical and defensive sectors slightly hurt relative results amid the broader market shift. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Sands Capital Select Growth Strategy highlighted Netflix, Inc. (NASDAQ:NFLX). Netflix, Inc. (NASDAQ:NFLX) is a leading subscription-based streaming entertainment platform. On June 8, 2026, Netflix, Inc. (NASDAQ:NFLX) closed at $82.64 per share. One-month return of Netflix, Inc. (NASDAQ:NFLX) was -5.73%, and its shares lost 31.34% over the past 52 weeks. Netflix, Inc. (NASDAQ:NFLX) has a market capitalization of $347.98 billion.
Sands Capital Select Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q1 2026 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) shares rose after the company walked away from a proposed acquisition of Warner Bros. Discovery. While we viewed the deal positively, the uncertainty had weighed on sentiment, and Netflix will receive a $2.8 billion break fee. We believe the company is now better positioned to exceed guidance and resume share repurchases. The stock also trades below 30 times forward earnings, a level rarely seen over the past 15 years. Fourth-quarter 2025 results included several positives. Management tacitly endorsed a leaked long-term forecast of reaching a $1 trillion valuation by 2030. Advertising revenue exceeded expectations, and net subscriber additions surpassed 23 million in 2025. We see upside potential to 2026 growth guidance of 12 percent to 14 percent, driven by management’s typical conservatism, consensus underestimation of United States and Canada revenue, and strength in advertising revenue.”
Netflix, Inc. (NASDAQ:NFLX) ranks 13th on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 144 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the first quarter, compared to 146 in the previous quarter. While we acknowledge the risk and potential of Netflix, Inc. (NASDAQ:NFLX) 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 Netflix, Inc. (NASDAQ:NFLX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Netflix, Inc. (NASDAQ:NFLX) and shared the list of best blue chip stocks under $100 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.
