Rowan Street Capital, an investment management company, released its Q1 2026 investor letter. A copy of the letter can be downloaded here. The Fund’s performance remained stable in the second quarter, with the portfolio declining about 1$ from the first quarter, resulting in a net return of -21% for the second half of 2026. Despite the stock prices of several holdings facing pressure in 2026, the underlying businesses have performed effectively, marking a trend where stock prices may not align with business performance. This divergence is typical in long-term investing, as business performance ultimately drives investment returns. Rowan Street emphasizes patience, conviction, and long‑term business performance over short‑term market enthusiasm. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Rowan Street Capital highlighted Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) is a global leader in electric vehicles and energy generation and storage systems, and also focuses on actively investing in AI technologies and robotics. On July 31, 2026, Tesla, Inc. (NASDAQ:TSLA) closed at $311.21 per share, reflecting a market capitalization of $1.23 trillion. Tesla, Inc. (NASDAQ:TSLA) posted a one-month return of -25.86%, while its shares gained 0.63% over the past 52 weeks.
Rowan Street Capital stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q2 2026 investor update:
“Tesla, Inc. (NASDAQ:TSLA) continued to make progress on what we believe are the initiatives that matter most over the long term. The company achieved record Q2 deliveries, exited the quarter with its largest order backlog since 2023, and management noted that production is increasingly constrained by supply rather than demand.
Perhaps most notably, Full Self-Driving (FSD) is becoming a primary driver of customer demand. As Musk remarked, many customers are now “buying Full Self-Driving with a car attached” rather than simply purchasing a vehicle. Robotaxi operations also continued to scale during the quarter. Tesla expanded service to seven U.S. markets, including Texas, Florida, and the San Francisco Bay Area, with autonomous miles driven increasing by more than 10% each week. Management emphasized that the pace of expansion is being dictated not by demand, but by safety. Optimus also remains on track to begin production, although management emphasized that manufacturing will likely scale gradually given the unprecedented complexity of building what Elon Musk believes could ultimately become the largest product in history…” (Click here to read the full text)
Tesla, Inc. (NASDAQ:TSLA) ranks 15 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 123 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter, compared to 137 in the previous quarter. While we acknowledge the risk and potential of Tesla, Inc. (NASDAQ:TSLA) 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 Tesla, Inc. (NASDAQ:TSLA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Tesla, Inc. (NASDAQ:TSLA) and shared the list of safe stocks for beginners to buy in 2026. 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.
