Eagle Capital Management, an investment management company, released its first quarter 2026 investor letter. A copy of the letter is available to download here. The letter notes that individual stocks and subsectors are now more reactive to sentiments, reducing market efficiency but creating opportunities to add value. Over the last decade, multi-asset managers, or pods, have grown significantly, operating with leverage, tight risk controls, and quickly cutting losers, often relying on earnings momentum. Growth managers have outperformed value managers, attracting flows; retail investors increasingly chase momentum, reducing overall diversity and amplifying momentum’s influence. It’s more valuable to find controversial or underexplored assets early and benefit as earnings grow. Eagle has capitalized on this trend, expecting continued opportunities. Investments should consider probabilities, building portfolios for various outcomes rather than betting on one, which allows for compound growth. The Strategy is generating strong long-term absolute returns. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Eagle Capital Management 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 May 20, 2026, Workday, Inc. (NASDAQ:WDAY) closed at $126.61 per share. One-month return of Workday, Inc. (NASDAQ:WDAY) was 5.35%, and its shares lost 55.60% over the past 52 weeks. Workday, Inc. (NASDAQ:WDAY) has a market capitalization of $30.47 billion.
Eagle Capital Management stated the following regarding WORKDAY, INC. (NASDAQ:WDAY) in its Q1 2026 investor letter:
“SAP, WORKDAY, INC. (NASDAQ:WDAY), and Intuit are highly entrenched application software businesses. Workday is the only de novo ERP to be successfully built in decades, with the leading global human capital management position and a large financials platform. Software is lately controversial due to AI-driven disruption. AI is deflationary for engineering costs and will change many workflows in how software is used. The technology is widening the distribution of 5- to 10-year outcomes for these businesses. In some cases, the central tendency shifts lower; in others, it’s stable or even shifts upward. The entire space has sold off over the past year, and we believe the recovery will be more heterogeneous than the decline. Many businesses will be impaired, but a number will likely benefit.
We have positioned ourselves with companies that we expect to be comparatively resilient, that also have idiosyncratic earnings growth paths or call options. Workday earns well bel ow normalized margins today and may reignite product development with the return of its founder to the CEO role.”
