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 stocks like Sea Limited (NYSE:SE). Sea Limited (NYSE:SE) is a leading Singapore-based technology company that operates through E-commerce, Digital Financial Services, and Digital Entertainment segments. On June 8, 2026, Sea Limited (NYSE:SE) closed at $91.94 per share. One-month return of Sea Limited (NYSE:SE) was -6.66%, and its shares lost 42.67% over the past 52 weeks. Sea Limited (NYSE:SE) has a market capitalization of $56.31 billion.
Sands Capital Select Growth Strategy stated the following regarding Sea Limited (NYSE:SE) in its Q1 2026 investor letter:
“Sea Limited (NYSE:SE) is an internet business in Southeast Asia that operates leading platforms in video games (Garena), ecommerce (Shopee), and digital financial services (Monee). Shares have come under pressure in recent months due to earnings revisions tied to incremental investment in the ecosystem, competition concerns with TikTok, and perceived AI disintermediation risk. We believe Shopee’s ongoing investments reflect a proactive effort to strengthen competitive advantages. These initiatives, costing roughly 70 basis points of gross merchandise value, focus on logistics, fulfillment, and loyalty programs. Compared with the reactive investment cycle in late 2023, this approach is more offensive, with clear visibility into return on investment and outcomes, and has a smaller financial impact. We believe TikTok’s threat is overblown and that competitive intensity remains stable, as evidenced by both platforms’ continued commission rate hikes throughout 2025. Our latest consumer survey also indicates Shopee continues to capture incremental wallet share and mindshare across Southeast Asia and Taiwan. At the same time, structural factors, including low ecommerce penetration in core markets, strong infrastructure, and concentrated market dynamics, should limit AI disintermediation risk and support Shopee’s long term position.”
Sea Limited (NYSE:SE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 86 hedge fund portfolios held Sea Limited (NYSE:SE) at the end of the first quarter, compared to 113 in the previous quarter. In Q1 2026, Sea Limited (NYSE:SE) generated over $7 billion of revenue, representing 47% year-on-year growth. While we acknowledge the risk and potential of Sea Limited (NYSE:SE) 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 Sea Limited (NYSE:SE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Sea Limited (NYSE:SE) and shared the list of best NYSE stocks to buy for long-term investment. 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.
