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 Seagate Technology Holdings plc (NASDAQ:STX) as a newly added position. Seagate Technology Holdings plc (NASDAQ:STX) is a leading data storage technology and infrastructure solutions company that offers capacity storage products. On June 9, 2026, Seagate Technology Holdings plc (NASDAQ:STX) closed at $846.01 per share. One-month return of Seagate Technology Holdings plc (NASDAQ:STX) was 3.51%, and its shares gained 568.84% over the past 52 weeks. Seagate Technology Holdings plc (NASDAQ:STX) has a market capitalization of $191.41 billion.
Sands Capital Select Growth Strategy stated the following regarding Seagate Technology Holdings plc (NASDAQ:STX) in its Q1 2026 investor letter:
“We initiated positions in Seagate Technology Holdings plc (NASDAQ:STX) and Lam Research and believe both businesses will play a key role in this transition. As a provider of hard disk drives, we expect Seagate Technology to benefit from limited capacity and potential price increases for solid state memory, which we expect may exceed current expectations. The hard disk drive market is a duopoly with limited risk of Chinese competition and Seagate is the clear industry leader in both share and technology.
Seagate Technology is a global leader in mass-capacity data storage. The company has built its position over decades of innovation and industry consolidation, emerging as one of two scaled providers in the global storage market, with a focus on high-capacity nearline hard disk drives that serve cloud service providers and enterprise data centers. Its Mozaic platform uses heat assisted magnetic recording to increase storage density, enabling a significantly lower cost per byte than flash alternatives and reinforcing hard drives as the preferred solution for large-scale data storage. Demand for storage is rising rapidly, driven by AI-related workloads that generate and retain large volumes of data, including generative and agentic applications that require long-context processing. We believe this growth in data creation is likely to outpace near-term supply, creating a favorable industry backdrop. In our view, a constrained supply environment, combined with sustained demand, should support volume growth and stable to improving pricing, positioning Seagate to benefit from durable trends tied to cloud computing and AI-driven data expansion.”
Seagate Technology Holdings plc (NASDAQ:STX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 93 hedge fund portfolios held Seagate Technology Holdings plc (NASDAQ:STX) at the end of the first quarter, up from 74 in the previous quarter. Seagate Technology Holdings plc (NASDAQ:STX) reported revenue of $3.1 billion in the March quarter, up 10% sequentially and up 44% year-over-year. While we acknowledge the risk and potential of Seagate Technology Holdings plc (NASDAQ:STX) 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 Seagate Technology Holdings plc (NASDAQ:STX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Seagate Technology Holdings plc (NASDAQ:STX) and shared the list of top unstoppable growth stocks to invest In. 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.
