ClearBridge Investments, a global equity manager, recently published first-quarter 2026 commentary for its “Small Cap Growth Strategy”. A copy of the letter can be downloaded here. The beginning of 2026 highlighted the significance of narratives, as the rapidly changing technological and geopolitical dynamics influenced market direction, leading the Russell 2000 Growth Index to decline by 2.8% for the quarter. Despite this, small-cap stocks continued to perform well. Market returns diversified in the first quarter, following a period of market concentration, favoring smaller-cap, value-oriented, and cyclical sectors. Concerns regarding the AI capital expenditure cycle led to increased sector dispersion. The ClearBridge Small Cap Growth Strategy outperformed its Russell 2000 Growth Index benchmark due to strong stock selection, particularly in industrials and consumer staples. The Strategy remains focused on identifying companies with sustainable, unique growth drivers, while reevaluating companies that may be affected by new technology. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, the ClearBridge Small Cap Growth Strategy highlighted stocks such as XPO, Inc. (NYSE:XPO). XPO, Inc. (NYSE:XPO) is a US based transportation and logistics company that provides freight transportation services. On April 9, 2026, XPO, Inc. (NYSE:XPO) closed at $211.73 per share. One-month return of XPO, Inc. (NYSE:XPO) was 16.52%, and its shares gained 125.77% over the past 52 weeks. XPO, Inc. (NYSE:XPO) has a market capitalization of $24.86 billion.
ClearBridge Small Cap Growth Strategy stated the following regarding XPO, Inc. (NYSE:XPO) in its Q1 2026 investor letter:
“Contributions in industrials reflected a mix of both long-standing positions and newer investments. Performance was largely balanced between broad-based strength across a variety of industries — particularly the aerospace and defense, data center power and infrastructure and transportation industries— as well as company specific execution stories and exposure to improving or attractive growth markets. XPO, Inc. (NYSE:XPO), a less than-truckload transportation provider, is benefiting from implementing an array of strategies to improve service quality, mix and pricing. This is helping profitability while positioning for a possible uptick in freight demand and activity.”
XPO, Inc. (NYSE:XPO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 46 hedge fund portfolios held XPO, Inc. (NYSE:XPO) at the end of the fourth quarter, compared to 40 in the previous quarter. In Q4 2025 XPO, Inc.’s (NYSE:XPO) total revenue increased 5% year over year to $2 billion. While we acknowledge the risk and potential of XPO, Inc. (NYSE:XPO) 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 XPO, Inc. (NYSE:XPO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered XPO, Inc. (NYSE:XPO) and shared a bullish thesis on the company. 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.
