RGA Investment Advisors, an investment management company, has released its second-quarter 2026 investor letter. The letter can be downloaded here. The letter addresses the incorporation of AI into investment strategies and the dramatic changes in market dynamics that have emerged, specifically referencing the AI Bottleneck 40. This group of stocks is crucial to data center infrastructure. Initially, these stocks were closely aligned with the S&P, but by mid-2025, they began to diverge and outperform the index, exhibiting significant volatility, with realized volatility rates approaching 60%. The letter stresses the importance of continually monitoring these trends and adjusting the investment strategy. Also, check the fund’s top five holdings to see its best picks in 2026.
In its Q2 2026 investor letter, RGA Investment Advisors highlighted GitLab Inc. (NASDAQ:GTLB). GitLab Inc. (NASDAQ:GTLB) develops a platform that supports the software development lifecycle, covering DevSecOps lifecycle stages. On August 24, 2026, GitLab Inc. (NASDAQ:GTLB) closed at $42.03 per share, reflecting a market capitalization of $7.099 billion. GitLab Inc. (NASDAQ:GTLB) posted a one‑month return of 27.50%, while its shares lost 3.98% over the past 52 weeks.
RGA Investment Advisors stated the following regarding GitLab Inc. (NASDAQ:GTLB) in its Q2 2026 investor letter:
“We bought shares in GitLab Inc. (NASDAQ:GTLB). GitLab is a software company offering DevSecOps and git management for enterprises, serving as an essential “orchestrating” layer for companies to securely manage their codebase and IP. AI is unquestionably driving demand for GitLab’s offerings, but there is concern around its traditional per seat pricing model versus a consumption-based model. If AI reduces the number of employees in technical roles at large enterprises, this presents a headwind to growth. This headwind has slowed top-line growth faster than GitLab’s budding consumption-based models for AI agents have been able to replace the lost revenue. As it stands today, AI-based revenues are a small piece of the pie, but we expect substantial growth over time. At sub-4x EV/sales, around 20x EV/EBITDA and a free cash flow yield over 5%, we think the valuation is compelling for a business still growing its top line in the high teens and playing an increasingly important role in enterprise AI workflows.”
GitLab Inc. (NASDAQ:GTLB) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held GitLab Inc. (NASDAQ:GTLB) at the end of the second quarter, which was 43 in the previous quarter. While we acknowledge the potential of GitLab Inc. (NASDAQ:GTLB) 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.