Greenlight Capital , an investment management firm, recently released its Q3 2026 investor letter. A copy of the letter can be downloaded here . The funds returned -3.3% in the third quarter of 2026, compared with a 2.3% gain for the S&P 500, bringing their year-to-date return to -1.5% against the index's 12.7% advance. The disappointing performance reflected weakness across the fund's long portfolio, which declined 8.5%, while its short portfolio gained 7.1%. Several holdings fell between 10% and 25% without identifiable company-specific catalysts. A significant portion of the letter focused on the economics of artificial intelligence. The firm estimated that current worldwide end-user AI revenue is probably below $100 billion, compared with the approximately $30 trillion total addressable market claimed by some industry participants. It also highlighted the intense competition among AI providers, the availability of open-source models, and the possibility that substantial capital could be destroyed during the infrastructure buildout. The macro portfolio lost 2.0% during the quarter, bringing its year-to-date decline to 6.0%, largely because the fund's position anticipating Federal Reserve rate cuts moved against it. Greenlight reduced that position by one-third for risk-management purposes. In addition, please check the Fund's top five holdings to know its best picks in 2026.
In its third-quarter 2026 investor letter, Greenlight Capital highlighted stocks like PG&E Corporation (NYSE: PG ). PG&E Corporation (NYSE:PG) is an energy-based holding company that provides electricity and natural gas services to customers in Northern and Central California. The one-month return of PG&E Corporation (NYSE:PG) was approximately 7.8%, while its shares traded between $11.77 and $19.16 over the last 52 weeks. On November 2nd, 2026, PG&E Corporation (NYSE:PG) stock closed at $13.28 per share. Its market capitalization at the close is $375.60 billion.
Greenlight Capital stated the following regarding PG&E Corporation (NYSE:PG) in its Q3 2026 investor letter:
" PG&E Corporation (NYSE:PG)was one of the few long positions that suffered a specific negative development, as the company did not obtain legislative relief from its wildfire risk. Fortunately, we were able to sidestep most of the potential loss."
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PG&E Corporation (NYSE:PG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . As per our database, 83 hedge fund portfolios held PG&E Corporation (NYSE:PG) at the end of the second quarter, which was 78 in the previous quarter. While we acknowledge the risk and potential of PG&E Corporation (NYSE:PG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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 PG&E Corporation (NYSE:PG) and shared the list of most undervalued dividend growth stocks according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
