Bristlemoon Capital, a global equities firm, released its “Bristlemoon Global Fund” first-quarter 2026 investor letter. The Bristlemoon Global Fund returned -25.5 percent in the March 2026 quarter, with a -3.4 percent return for March 2026, net of fees. A copy of the letter is available to download here. This was the Fund’s most severe drawdown since inception, caused not by declining earnings, but by sharp and rapid repricing by investors. The letter outlined the weak performance, how the firm addressed it with a compounding/conviction position sizing framework, and adjustments following the Iran War developments. The first quarter of 2026 saw a sharp sell-off in software companies, mostly due to fears that AI would impact SaaS companies. During this dislocation, the firm increased its holdings of high-quality assets at lower prices. Long-term earnings growth remains key, and the firm believes its positions are well-placed to compound earnings attractively over time. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Bristlemoon Global Fund highlighted AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) is a mobile technology company specializing in developing software-based platforms for advertisers to enhance the marketing and monetization of their content. On May 5, 2026, AppLovin Corporation (NASDAQ:APP) closed at $478.11 per share. One-month return of AppLovin Corporation (NASDAQ:APP) was 22.22%, and its shares gained 57.55% over the past 52 weeks. AppLovin Corporation (NASDAQ:APP) has a market capitalization of $160.77 billion.
Bristlemoon Global Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2026 investor letter:
“AppLovin Corporation (NASDAQ:APP), the largest position in the Fund, declined by almost -41% in the March quarter. This drawdown in the stock was a material hit to the Fund’s performance for the quarter. Like many of the Fund’s other holdings, expectations for future earnings for APP have steadily increased, yet the share price plummeted due to misplaced AI-disruption fears. In other words, all of the APP stock price decline was driven by a decline in the earnings multiple.
Some of the APP stock price movements during the quarter are worth recounting to highlight the bizarre trading activity we observed. For example, APP declined by -30% in January 2026. This included a -17% single-day selloff following Google’s announcement of Project Genie – a generative-AI tool enabling users to create 3D playable worlds via text prompts. This price decline appeared irrational to us, given that this development is more likely to be positive for APP. In a world where AI reduces the barriers to game content creation, we would likely see an explosion of new mobile games. And in a world flooded with games, content becomes commoditised, and distribution – that is, getting your game in front of people who want to play it and spend money – becomes the scarce asset…” (Click here to read the full text)
