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Laughing Water Capital, an investment management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Class A investment in Laughing Water Capital returned approximately -4.5% net of all fees and expenses in the first quarter of 2026. The SP500TR and R2000 returned -4.3% and 0.9% respectively, during the same period. Over the first ten years, since its inception, Laughing Water Capital returned approximately 410%, or 17.7% per year. Recent developments, such as AI breakthroughs and U.S. operations in Iran and Venezuela, demonstrate the enduring nature of global uncertainty. The firm believes volatility has generated possibilities that lead to portfolio modifications with recent additions reflecting shorter investment timelines, strong balance sheets, and near-term cash flows, with limited event path risk. In addition, please check the portfolio’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Laughing Water Capital highlighted stocks like NextNav Inc. (NASDAQ:NN). Headquartered in Reston, Virginia, NextNav Inc. (NASDAQ:NN) specializes in positioning, navigation, and timing (PNT) solutions that offers Pinnacle, an accurate altitude service for public safety applications. On April 24, 2026, NextNav Inc. (NASDAQ:NN) closed at $17.71 per share. One-month return of NextNav Inc. (NASDAQ:NN) was 15.98%, and its shares gained 44.57% over the past 52 weeks. NextNav Inc. (NASDAQ:NN) has a market capitalization of $2.41 billion.

Laughing Water Capital stated the following regarding NextNav Inc. (NASDAQ:NN) in its Q1 2026 investor letter:

"NextNav Inc. (NASDAQ:NN) – I have written about Nextnav, our wireless spectrum / 5G terrestrial backup to GPS investment, several times in the past. This investment remains an outsized position, and it remains subject to wild swings every month around the timing of the release of each month’s Federal Communications Commission (FCC) agenda. The swings can be frustrating, but in my view, the investment has been largely de-risked as the FCC submitted a draft Notice of Proposed Rule Making (NPRM) to the White House Office of Information and Regulatory Affairs (OIRA). In other words, it seems that the FCC is now on our side.

However, the proposal still needs to pass OIRA review, which would entail checking with other agencies that could be affected by the proposal. In this case, that would primarily be the Department of Transportation (DOT) and the Department of Defense (DOD). From my perspective, it seems unlikely that FCC Chair Brendan Carr would submit a proposal to OIRA without first running it by DOT and DOD. Further, the DOT and FCC both fall under oversight from the Senate Commerce, Science, and Transportation Committee, which is chaired by Senator Ted Cruz. Cruz has been a vocal advocate for terrestrial GPS in the past, which seems to indicate that the DOT will be on board…” (Click here to read the full text)

NextNav Inc. (NASDAQ:NN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 34 hedge fund portfolios held NextNav Inc. (NASDAQ:NN) at the end of the fourth quarter, up from 29 in the previous quarter. While we acknowledge the potential of NextNav Inc. (NASDAQ:NN) 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 NextNav Inc. (NASDAQ:NN) and shared the list of stocks with monster returns. 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.