Polen Capital, an investment management company, released its first-quarter 2025 investor letter for “Polen 5Perspectives Small Growth Strategy”. A copy of the letter is available to download here. Polen 5Perspectives Small Growth Composite Portfolio returned 3.3% gross and 3.0% net of fees, respectively, in the first quarter of 2026, compared to the -2.8% return of the Russell 2000 Growth Index. Small caps performed strongly at the start of the first quarter, but market volatility caused a shift in focus. Initially, fears of AI disruption in software dominated, followed by worries over private credit redemptions raising broader systemic risk concerns. By March, concerns shifted mainly to increasing geopolitical risks and their impact on rates and inflation. This heightened volatility is expected to continue for the foreseeable future. The importance of adopting a flexible approach to opportunities has become clear this year. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Polen 5Perspectives Small Growth Strategy highlighted Powell Industries, Inc. (NASDAQ:POWL) as a leading contributor. Powell Industries, Inc. (NASDAQ:POWL) is an industrial company that designs, develops, manufactures, sells, and services custom-engineered equipment and systems. On May 13, 2026, Powell Industries, Inc. (NASDAQ:POWL) closed at $300.84 per share. One-month return of Powell Industries, Inc. (NASDAQ:POWL) was 29.22%, and its shares gained 407.72% over the past 52 weeks. Powell Industries, Inc. (NASDAQ:POWL) has a market capitalization of $10.96 billion.
Polen 5Perspectives Small Growth Strategy stated the following regarding Powell Industries, Inc. (NASDAQ:POWL) in its Q1 2026 investor letter:
“The top contributors to the Portfolio’s relative performance in the quarter were Powell Industries, Inc. (NASDAQ:POWL), Argan, and Bloom Energy. Powell Industries manufactures highly engineered electrical systems that distribute and manage power in mission-critical environments such as utilities, energy, and increasingly data centers. As electricity demand rises, particularly from AI-driven workloads, Powell’s equipment plays a key role in enabling safe, reliable power delivery across complex infrastructure. During the quarter, shares outperformed following continued strength in orders and backlog, reflecting robust demand across end markets. The company reported significant year-over-year order growth and a book-to-bill well above 1.0x, driven by both traditional energy projects and accelerating investment in data center and grid infrastructure.”
Powell Industries, Inc. (NASDAQ:POWL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 30 hedge fund portfolios held Powell Industries, Inc. (NASDAQ:POWL) at the end of the fourth quarter, compared to 33 in the previous quarter. While we acknowledge the risk and potential of Powell Industries, Inc. (NASDAQ:POWL) 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 Powell Industries, Inc. (NASDAQ:POWL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Powell Industries, Inc. (NASDAQ:POWL) and shared the list of best grid modernization stocks to buy for AI infrastructure. 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.
