Greenhaven Road Capital, an investment management company, released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The fund achieved an approximate 11% net return in the second quarter, indicating progress from the first quarter.
Key changes to the portfolio will include lower concentration and increased investments with near-term catalysts, alongside a proactive stance on profit-taking. The focus will remain on owning strong businesses and conducting research that challenges consensus views, as several major investments are poised for significant events within the year. Despite declines in market multiples, underlying businesses continue to grow, suggesting a favorable positioning for returns.
Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026. In its Q2 2026 investor letter, Greenhaven Road Capital 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 August 14, 2026, AppLovin Corporation (NASDAQ:APP) closed at $315.44 per share, reflecting a market capitalization of $105.97 billion. AppLovin Corporation (NASDAQ:APP) posted a one-month return of -25.71%, while its shares lost 28.07% over the past 52 weeks. Greenhaven Road Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q2 2026 investor letter: "AppLovin Corporation (NASDAQ:APP) — This is a 1% position in a small AI basket.
AppLovin is an AI company whose product happens to be ad matching. AXON predicts which ad to show to which user to maximize conversion AppLovin has been one of the best companies at using AI at scale to drive revenues and profits. In 2025 revenue grew ~70% year-over-year to $5.48B with ~82% adjusted EBITDA margin and $3.95B of free cash flow (FCF), an 88% conversion of EBITDA to FCF.
In 2025 the company was a rule of 142 company with 70% revenue growth and 72% FCF margin. AppLovin should generate more than $6 million of EBITDA per employee in 2026, paring down headcount while growing at very high rates. Shares trade at sub 20X 2027 FCF." AppLovin Corporation (NASDAQ:APP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.
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