Optimist Fund, an investment management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund’s objective is to achieve capital growth at a rate in the mid-teens or higher over the course of several decades. In Q1 2026, the Fund declined 27.3%, driven by a swift shift in the market narrative amid fears of AI disruption and the outbreak of war in Iran. The fund views this drawdown as an opportunity to strengthen the core holdings at more attractive prices. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Optimist Fund highlighted stocks like Carvana Co. (NYSE:CVNA). Carvana Co. (NYSE:CVNA) is a US-based used car retailer that operates an e-commerce platform. On May 18, 2026, Carvana Co. (NYSE:CVNA) closed at $66.02 per share. One-month return of Carvana Co. (NYSE:CVNA) was -17.66%, and its shares gained 9.20% over the past 52 weeks. Carvana Co. (NYSE:CVNA) has a market capitalization of $72.41 billion.
Optimist Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its Q1 2026 investor letter:
“Carvana Co. (NYSE:CVNA) – Carvana finished the year with another strong quarter. EBITDA came in modestly below our expectations, driven by elevated costs at a handful of reconditioning centers, but this does not change our view of the long-term earnings power of the business.
Stepping back, the underlying momentum remains exceptional. Unit growth continues to exceed 35% year over year, while the company is delivering best-in-class profitability. Management expects the reconditioning cost pressures experienced in Q4 to be resolved by Q2 2026.
With less than 2% share of the U.S. used car market, Carvana’s growth runway remains measured in decades, not years. Carvana remains a top five holding, and we added to the position during Q1.”
Carvana Co. (NYSE:CVNA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 100 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the fourth quarter, compared to 109 in the previous quarter. In Q1 2026, Carvana Co. (NYSE:CVNA) reported revenue of $6.432 billion, marking an increase of 52% from Q1 2025. While we acknowledge the risk and potential of Carvana Co. (NYSE:CVNA) 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 Carvana Co. (NYSE:CVNA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Carvana Co. (NYSE:CVNA) and shared the list of richest hedge fund managers in the world and their top stock picks. 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.
