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 Shopify Inc. (NASDAQ:SHOP). Shopify Inc. (NASDAQ:SHOP) is a Canada-based e-commerce technology company that provides a cloud-based platform for individuals and companies to create and manage their operations. On June 8, 2026, Shopify Inc. (NASDAQ:SHOP) closed at $110.78 per share. One-month return of Shopify Inc. (NASDAQ:SHOP) was 12.17%, and its shares gained 1.57% over the past 52 weeks. Shopify Inc. (NASDAQ:SHOP) has a market capitalization of $143.75 billion.
Sands Capital Select Growth Strategy stated the following regarding Shopify Inc. (NASDAQ:SHOP) in its Q1 2026 investor letter:
“Shopify Inc. (NASDAQ:SHOP) is an ecommerce software platform that enables merchants to build, manage, and scale their businesses. Shares declined alongside software stocks amid investor concerns about AI-related disruption. While AI is reshaping the software landscape, we believe Shopify is better positioned than most horizontal vendors. As a vertical application tailored to ecommerce, it is less likely to be displaced by agentic workflows. Instead, generative tools such as ChatGPT may act as incremental demand channels. Shopify has already enabled an integration with ChatGPT and created a universal protocol for AI shopping alongside Google, which applies third-party payment fees to transactions originating there, consistent with its platform model. Strong operating momentum supports this view. Shopify has delivered three consecutive quarters of roughly 30 percent year-over-year gross merchandise volume growth, with 2025 marking its fastest calendar year growth since 2021. This growth reflects ecommerce expansion, share gains, and product innovation, reinforcing the durability of its business model in an evolving AI landscape.”
Shopify Inc. (NASDAQ:SHOP) is not on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 88 hedge fund portfolios held Shopify Inc. (NASDAQ:SHOP) at the end of the fourth quarter, compared to 101 in the previous quarter. In Q1 2026, Shopify Inc. (NASDAQ:SHOP) generated revenue of $3.2 billion, an increase of 34% year-over-year. While we acknowledge the risk and potential of Shopify Inc. (NASDAQ:SHOP) 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 Shopify Inc. (NASDAQ:SHOP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Shopify Inc. (NASDAQ:SHOP) and shared the list of best SaaS stocks to buy according to hedge funds. 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.
