Fred Alger Managementan investment management company, published its Q1 2026 “Alger Capital Appreciation Fund” investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, Alger Capital Appreciation Fund Class A shares underperformed the Russell 1000 Growth Index. The information technology and financial sectors contributed, while consumer discretionary and utilities detracted from performance. US stocks experienced a volatile period in the first quarter of 2026, with the S&P 500 index falling 4.33%, driven by two distinct forces that transformed the investment landscape. The software industry experienced significant disruption due to the rise of agent AI tools. The second is the conflict between the United States and Iran that began in late February and caused a major supply shock. This results in an increase in crude oil prices, injecting potential inflationary pressure into the economy. The Fund identifies opportunities for companies that are adopting and enabling the technology as it evolves into an agency phase, despite the market’s focus on industries impacted by AI advances. Also, check out the Fund’s top five holdings to learn your best picks in 2026.
In its Q1 2026 investor letter, Alger Capital Appreciation Fund highlighted stocks like Western Digital Corporation (NASDAQ:WDC). Western Digital Corporation (NASDAQ:WDC) is a data storage company engaged in the manufacturing and distribution of data storage devices and solutions. On April 17, 2026, Western Digital Corporation (NASDAQ:WDC) closed at $372.52 per share. Western Digital Corporation (NASDAQ:WDC)’s monthly performance was 26.37% and its shares gained 935.93% in the last 52 weeks. Western Digital Corporation (NASDAQ:WDC) has a market capitalization of $127.36 billion.
Alger Capital Appreciation Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q1 2026 investor letter:
“Western Digital Corporation (NASDAQ:WDC) is a hard disk drive (HDD) storage company benefiting from growing investment in hyperscaler data centers and continued data proliferation. The hard drive industry is highly consolidated, with only two large-scale manufacturers, and Western Digital holds a leading position in the market. The business has structurally shifted toward cloud customers as consumer exposure has declined, with cloud accounting for the majority of Western Digital’s revenue. Importantly, industry participants have emphasized capital discipline, prioritizing higher areal density (i.e. more terabytes per unit) rather than adding significant unit capacity, supporting a healthier supply-demand balance and higher profitability.
During the quarter, the stock contributed positively to performance after the company delivered strong fiscal results in the second quarter, highlighted by solid revenue growth, record gross margins and favorable pricing dynamics in a tightly supplied market. In particular, the company’s annual production capacity is committed through long-term agreements, providing strong revenue visibility. “We believe Western Digital’s leadership in high-capacity drive technology and its essential role within the AI data infrastructure ecosystem supports a durable, long-term growth trajectory.”
