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Crossroads Capital LLC, an investment management firm, published its first-quarter 2026 investor letter. You can download a copy here. The Fund increased by 4.2% net of fees and expenses during the quarter. Since its founding, the fund has compounded at a gross rate of 21.3% and a net rate of 17.1%.  By the end of March 20206, the fund’s overall non-delta adjusted gross and net exposures were 114.1% and 73.3%, respectively. The letter noted that the stable market trends from 20205 were broken by geopolitical tensions linked to Trump’s increasingly unpredictable foreign policy, causing the S&P 500 to fall about 4.3%. Nonetheless, Q1’s fundamentals aligned with broader trends. Overall, the firm is pleased with its portfolio, maintaining its position as special situations begin to accelerate. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Crossroads Capital highlighted Nebius Group N.V. (NASDAQ:NBIS) as a notable contributor. Nebius Group N.V. (NASDAQ:NBIS) is a technology company that focuses on developing full-stack infrastructure to service the global AI industry. On May 22, 2026, Nebius Group N.V. (NASDAQ:NBIS) closed at $214.77 per share. One-month return of Nebius Group N.V. (NASDAQ:NBIS) was 48.16%, and its shares gained 456.54% over the past 52 weeks. Nebius Group N.V. (NASDAQ:NBIS) has a market capitalization of $54.53 billion.

Crossroads Capital stated the following regarding Nebius Group N.V. (NASDAQ:NBIS) in its Q1 2026 investor letter:

"Nebius Group N.V. (NASDAQ:NBIS): It’s worth pausing to remember where this one sat a year ago. When we first bought NBIS in late 2025, the bear case wrote itself. Nebius was a freshly re-listed carve-out of Yandex, operating a modest data center with a few co-locations across Europe, and a customer book composed almost entirely of VC-backed AI natives and other small, unproven firms. No anchor customer. No enterprise counterparties worth the name. A small but growing fleet of Nvidia GPUs financed with cash the company was burning faster than it was generating. And the elephant in the room was that nobody had any real idea how the capital markets would treat a Russian-adjacent carve-out asking them to underwrite a multi-gigawatt buildout. You had to squint to see a business. What you could see was a team, a collection of good assets arguably trading below liquidation value, and an execution-based timing window.

One year later, the questions that defined that bear case have been answered in sequence, and not one of them broke the wrong way. Late in 2025, NBIS added META to its customer list with a ~$3B capacity-constrained contract. In March, that became a $27B five-year commitment in two pieces: $12B of dedicated capacity on one of the first large-scale Vera Rubin deployments starting in early 2027, and a further $15B in which Meta commits to backstop Nebius’s uncommitted third-party capacity as it comes online. That second piece matters more than the headline suggests, as it turns Meta into a floor buyer for speculative builds and collapses demand risk on capacity Nebius was already planning to scale. Combined with Microsoft, committed contract value now sits at roughly $46B against a platform that did $228M of revenue in Q4. The platform thesis is scaling as we speak, with AAA counterparties…” (Click here to read the full text)

Nebius Group N.V. (NASDAQ:NBIS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 54 hedge fund portfolios held Nebius Group N.V. (NASDAQ:NBIS) at the end of the fourth quarter, compared to 65 in the previous quarter. Nebius Group N.V.'s (NASDAQ:NBIS) Q1 2026 revenue grew 684% from last year to $399 million. While we acknowledge the potential of Nebius Group N.V. (NASDAQ:NBIS) 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 Nebius Group N.V. (NASDAQ:NBIS) and shared the list of stocks with easy double-digit gains. 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.