Hotchkis & Wiley, an investment management company, released its first-quarter 2026 investor letter for the “Hotchkis & Wiley Mid-Cap Value Fund.” A copy of the letter can be downloaded here. In the first quarter, geopolitical instability and AI-focused investments were the key market drivers. The energy sector significantly benefited from the Brent crude oil surge due to U.S.-Israel strikes on Iran. The Hotchkis & Wiley Mid-Cap Value Fund outperformed the Russell Midcap Value Index, mainly due to strong stock selection in energy, which returned 79% compared to 37% for the index. The Fund delivered a return of 6.74% in Q1 Vs. 3.68% return for the index. While stock selection in technology, healthcare, and consumer discretionary negatively impacted overall performance. The firm remains focused on its disciplined and long-term investment approach. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks like Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a leading enterprise software company that provides cloud applications for human resources and financial management. On April 23, 2026, Workday, Inc. (NASDAQ:WDAY) closed at $114.67 per share. One-month return of Workday, Inc. (NASDAQ:WDAY) was -7.66%, and its shares lost 52.13% over the past 52 weeks. Workday, Inc. (NASDAQ:WDAY) has a market capitalization of $29.47 billion.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q1 2026 investor letter:
“Workday, Inc. (NASDAQ:WDAY) is a leader in cloud application software for back-office business functions including human capital management, financials management, and ERP (enterprise resource planning). Workday’s formidable competitive advantages lead to compelling unit economics (97% gross retention, 38% normal EBIT margin, low-teens subscription revenue growth) and its ERP software markets are both the largest and least cloud-penetrated in the application software universe. This provides Workday with a long runway to invest at high returns while trading at a valuation that is attractive for an established franchise. Workday posted a good Q4 that slightly beat expectations. However, continued market concerns that AI agents will displace traditional software have pressured the stock, despite switching costs and compliance risks making displacement scenarios unrealistic.”
Workday, Inc. (NASDAQ:WDAY) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 70 hedge fund portfolios held Workday, Inc. (NASDAQ:WDAY) at the end of the fourth quarter, up from 64 in the previous quarter. In fourth quarter of fiscal 2026, Workday, Inc. (NASDAQ:WDAY) reported revenue of $2.532 billion, marketing an increase of 15% year-over-year. While we acknowledge the risk and potential of Workday, Inc. (NASDAQ:WDAY) 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 Workday, Inc. (NASDAQ:WDAY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Workday, Inc. (NASDAQ:WDAY) and shared the list of stocks Jim Cramer discussed. 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.
