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Conestoga Capital Advisors, an asset management company, released its first-quarter 2026 investor letter. A copy of the letter is available to download here. The first quarter of 2026 started with optimism about the domestic economy and attractive small-cap valuations, but it was affected by volatility due to geopolitical unrest in the Middle East and shifting expectations regarding interest rates. This unrest drove up energy prices and created a cautious global market. Energy, Basic Materials, and Industrials performed well, while software companies faced challenges due to AI disruption concerns. Market sensitivity to geopolitical events, energy prices, and inflation remains high. The Conestoga Smid Cap Composite fell 10.24% net-of-fees, underperforming the Russell 2500 Growth Index’s -3.52% return. The decline was driven by negative stock selection and sector/industry-specific headwinds, notably within Technology, Industrials, and Health Care sectors. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Conestoga Capital Advisors highlighted CACI International Inc (NYSE:CACI). CACI International Inc (NYSE:CACI) provides expertise and technology to enterprise and mission customers in support of national security in the intelligence, defense, and federal civilian sectors. On May 5, 2026, CACI International Inc (NYSE:CACI) closed at $494.04 per share. One-month return of CACI International Inc (NYSE:CACI) was -14.91%, and its shares gained 3.81% over the past 52 weeks. CACI International Inc (NYSE:CACI) has a market capitalization of $10.91 billion.
Conestoga Capital Advisors stated the following regarding CACI International Inc (NYSE:CACI) in its Q1 2026 investor letter:
"CACI International Inc (NYSE:CACI) provides information solutions and services to the U.S. government, primarily in defense and intelligence. The company continues to benefit from strong demand for mission-critical technology and services, supported by a robust backlog and favorable budget environment. Its focus on higher-value programs and disciplined execution supports a durable growth profile and expanding margins."
CACI International Inc (NYSE:CACI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 42 hedge fund portfolios held CACI International Inc (NYSE:CACI) at the end of the fourth quarter, up from 41 in the previous quarter. In the third quarter of fiscal 2026, CACI International Inc (NYSE:CACI) reported revenue of $2.4 billion, marking an 8.5% year over year growth. While we acknowledge the potential of CACI International Inc (NYSE:CACI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered CACI International Inc (NYSE:CACI) and shared the list of best defense stocks that will skyrocket. 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.