Fred Alger Management, an investment management company, released its “Alger Capital Appreciation Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the Class A shares of the Alger Capital Appreciation Fund underperformed the Russell 1000 Growth Index. The Information Technology and Financials sectors contributed, while Consumer Discretionary and Utilities detracted from the performance. US equities experienced a volatile period in the first quarter of 2026, with the S&P 500 Index declining 4.33%, driven by two distinct forces that transformed the investment landscape. The software industry experienced significant disruption due to the rise of agentic artificial intelligence tools. The second is the U.S.-Iran conflict that began in late February, causing a significant supply shock. This results in a surge in crude oil prices, injecting potential inflationary pressure into the economy. The Fund identifies opportunities for companies that are adopting and facilitating the technology as it evolves into an agentic phase, despite the market’s focus on industries affected by AI advancements. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Alger Capital Appreciation Fund highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) is a leading data center-scale AI infrastructure company that operates through Compute & Networking and Graphics segments. On April 17, 2026, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $201.68 per share. One-month return of NVIDIA Corporation (NASDAQ:NVDA) was 13.93%, and its shares gained 108.11% over the past 52 weeks. NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $4.90 trillion.
Alger Capital Appreciation Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2026 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the world’s leading designer of graphics processing units (GPUs) and accelerated computing platforms, providing the foundational hardware and software that power artificial intelligence training and inference across data centers, cloud infrastructure, and edge applications globally. The company’s GPUs have become the de facto standard for AI workloads, and its expanding ecosystem of networking, software, and systems solutions has deepened its strategic importance to hyperscalers, enterprises, and sovereign AI initiatives worldwide. We believe Nvidia is a direct beneficiary of the AI infrastructure buildout given its dominant market position, unmatched product roadmap, and rapidly expanding addressable market. During the quarter, shares detracted from performance despite the company delivering record fiscal fourth-quarter results that exceeded expectations on both revenue and earnings, with strong forward guidance that pointed to continued acceleration. However, a sharp post-earnings sell-off reflected broader investor anxiety around the sustainability of AI capital spending, lingering questions about whether more cost efficient AI models could reduce demand for high-end computing hardware, and a wider rotation out of mega-cap technology names. Despite the near-term volatility, we believe the structural demand for accelerated computing remains firmly intact.”
NVIDIA Corporation (NASDAQ:NVDA) is in fourth position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 264 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter, compared to 234 in the previous quarter. In the fourth quarter of fiscal 2026, NVIDIA Corporation (NASDAQ:NVDA) reported $68 billion in revenues, marking a 73% year over year growth. While we acknowledge the risk and potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVIDIA Corporation (NASDAQ:NVDA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) 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.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
