The present treatise offers an investigation into the operative mechanisms of stress redistribution and notch insensitivity of the prepreg-based, long-fiber discontinuous composites with stochastic fiber orientation state manufactured via a compression molding process. Open-hole tensile behavior is examined to determine the source of notch insensitivity. Both experimental and simulation approaches reveal that local damage mechanisms result in stress redistribution and corresponding reduction in notch sensitivity as measured by the ratio of the notched to un-notched tensile strengths. The analysis showed that open-hole coupon fracture may occur in locations at or away from the hole, depending on the details of the stochastic meso-morphology and the notch size. It was also demonstrated that as the notch diameter is increased, the probability of fracture at the notch is increased. The experimentally observed notch insensitivity of the prepreg platelet composite was reproduced in the numerical simulations.