L1 Capital, an investment management firm, released its “L1 Long Short Fund” second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The market’s main themes in the June quarter were the Iran conflict and developments in the AI sector. These trends shifted after oil prices declined due to a ceasefire agreement, leading to a reversal. AI stocks surged, driven by strong earnings, rapid capital investment, and critical supply shortages. During this period, the L1 Long Short Fund achieved notable gains, rising 12.7% compared to the ASX200AI’s 4.0%, with year-to-date returns at 12.5% versus 2.4%. U.S. equities outperformed, especially those benefiting from AI-related capital expenditure. The firm is satisfied with the portfolio’s positioning, emphasizing strong medium-term growth potential, supported by attractive valuations, solid earnings, and robust cash flow. In addition, you can check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, L1 Long Short Fund highlighted Nexgen Energy Ltd. (NYSE:NXE). Nexgen Energy Ltd. (NYSE:NXE) is an exploration and development stage company that engages in the acquisition, exploration, evaluation, and development of uranium properties in Canada. On July 17, 2026, NexGen Energy Ltd. (NYSE:NXE) closed at $8.80 per share, reflecting a market capitalization of $5.83 billion. NexGen Energy Ltd. (NYSE:NXE) posted a one-month return of -15.79%, while its shares gained 28.28% over the past 52 weeks.
L1 Long Short Fund stated the following regarding NexGen Energy Ltd. (NYSE:NXE) in its Q2 2026 investor update:
“A key stock detractor for the June quarter was: NexGen Energy Ltd. (NYSE:NXE) (Long -17%) declined alongside the broad uranium complex, driven by general risk-off sentiment in the commodities space. Despite the equity volatility, spot uranium prices increased modestly (+1.5%). NexGen is preparing to develop the world’s largest undeveloped uranium deposit, Arrow, located in Saskatchewan, Canada, which will be a new major strategic Western source of uranium to address the looming market deficit. The company received final regulatory approvals in March 2026 and is preparing to commence full-scale project construction, with an estimated 4-year construction timeline. Once developed, Arrow has the potential to generate ~C$2.8b of EBITDA annually, assuming a US$80/lb uranium price (below current spot prices). We believe this is a highly compelling proposition given NexGen’s current market cap of only ~C$8.8b.”
NexGen Energy Ltd. (NYSE:NXE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 36 hedge fund portfolios held NexGen Energy Ltd. (NYSE:NXE) at the end of the first quarter, compared to 37 in the previous quarter. While we acknowledge the risk and potential of NexGen Energy Ltd. (NYSE:NXE) 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 NexGen Energy Ltd. (NYSE:NXE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered NexGen Energy Ltd. (NYSE:NXE) and shared the list of largest uranium producing countries in the world. In addition, please check out our hedge fund investor letters Q2 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.
