In this article, we will take a look at the 10 Best Stocks to Buy According to D1 Capital’s Daniel Sundheim.
Daniel Sundheim is the founder and chief investment officer of D1 Capital Partners, a global investment firm active across both public and private markets. Established in 2018, the hedge fund successfully endured the COVID-19 slump by relying on an aggressive investment strategy based on fundamental research. D1 currently manages a portfolio of $8 billion in public investments and $12 billion in private holdings. The firm has maintained a significant presence in Silicon Valley, investing in major players such as SpaceX, which accounts for about a third of its private portfolio.
Of course, staying on the winning side is nearly impossible for any investor, including billionaires like Daniel Sundheim. Back in 2022, Sundheim endured one of the most challenging years of his career as broader equity markets came under pressure from rising inflation. While the S&P 500 sank 19.4%, D1 Capital underperformed with a 30.5% decline, largely due to its substantial private-market bets on tech startups, whose valuations plummeted sharply. D1 Capital was among several high-profile hedge funds caught in this downturn. However, the firm rebounded in 2023, rising more than 19% after strategically reducing some of its private investments.
According to an investor letter received by Financial Times, D1 Capital’s public portfolio returned 44% in 2024, driven by strategic investments in European stocks. This incredible run of gains continued into 2025, with the fund gaining 7.7% in January. D1’s approach of capitalizing on valuation discounts in European markets relative to US rivals seems to have been largely successful. Speaking on this, Sundheim stated in the letter:
“We believe there is currently an extremely attractive opportunity to buy great businesses that trade on non-U.S. exchanges.”
The billionaire is also a major proponent of artificial intelligence, and believes that public companies represent the best way to capitalize on the AI boom. Speaking in late 2024, he explained that, unlike previous technological breakthroughs, AI would have an impact on almost every sector, prompting companies across industries to invest heavily in its development. Large public corporations, he noted, have the resources and scale required to effectively implement AI initiatives, giving them an advantage over smaller, more agile firms. Sundheim further stressed that companies investing in AI today are doing so with a long-term view, realizing that the substantial infrastructure necessary suggests returns are likely to come over the next decade, not the next quarter.
Daniel Sundheim of D1 Capital
Our Methodology
For this list, we picked stocks from D1 Capital Partner’s 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. 3M Company (NYSE:MMM)
D1 Capital Partners’s Stake as of Q4: $175.1 million
Number of Hedge Fund Holders: 79
3M Company (NYSE:MM) is a multinational industrial company that manufactures adhesives, abrasives, ceramics, and nanotechnology.
On April 24, UBS analyst Amit Mehrotra reiterated his Buy rating and $184 price target for 3M Company (NYSE:MM) shares. Following the company’s first-quarter results and subsequent talks with 3M, Mehrotra raised his 2025 earnings per share projection to $8 from $7.93. This change pushes his projection over the consensus estimate of $7.73. Mehrotra emphasized that 3M’s repeated earnings guidance of $7.60 to $7.90 represents a favorable sign. He also noted that the guidance now includes a 10-cent contingency or cushion, which was not previously included.
Despite a challenging macroeconomic climate, 3M Company (NYSE:MM) remained financially strong, returning $1.7 billion to shareholders and increasing its dividend by 4%. The firm also introduced 62 new products, a 60% increase over the previous year. Additionally, 3M Company (NYSE:MM) intends to raise share repurchases to $2 billion, demonstrating confidence in its future cash flows and financial stability.
9. Lineage Inc. (NASDAQ:LINE)
D1 Capital Partners’s Stake as of Q4: $219.8 million
Number of Hedge Fund Holders: 35
Lineage, Inc. (NASDAQ:LINE) is a global leader in temperature-controlled logistics, focusing on the storage and delivery of perishable goods. The company has a network of more than 480 strategically positioned properties totaling over 84 million square feet in North America, Europe, and Asia-Pacific.
Lineage, Inc. (NASDAQ:LINE) has increased its presence in the Pacific Northwest by acquiring three facilities from Bellingham Cold Storage. The deal, which comprises around 24 million cubic feet of space and 85 thousand pallet positions, expands Lineage’s substantial operations, which produced $5.34 billion in revenue over the previous year.
Lineage Inc.’s fourth-quarter and full-year 2024 earnings showed unchanged revenues of $5.34 billion. Despite this, the company expects adjusted EBITDA to grow in 2025, with a range of $1.35 billion to $1.4 billion. Additionally, Lineage declared a quarterly cash dividend of $0.5275 per share for the first quarter of 2025.
8. XPO, Inc. (NYSE:XPO)
D1 Capital Partners’s Stake as of Q4: $266.7 million
Number of Hedge Fund Holders: 45
XPO Inc. (NYSE:XPO) offers freight transportation services across the globe, operating in a wide range of industries, including retail, e-commerce, manufacturing, food & beverage, and consumer products.
XPO Inc. (NYSE:XPO) has also announced the authorization of a $750 million stock repurchase program. The scheme succeeds the previous plan from February 2019, which had $503 million remaining.
On April 10, Benchmark analysts lowered their price target on XPO Inc. (NYSE:XPO) shares to $130 from $160, while maintaining a Buy rating on the stock. According to analyst Chris Kuhn, XPO Inc. has been able to deliver sequential price growth and operational ratio (OR) in a poor freight market. The firm also stated that, while XPO has not reported QTD revenue per hundredweight (rev/cwt) disregarding fuel expenses, the 6.3% growth in rev/cwt during the fourth quarter was positive and surpassed expectations.
7. GE HealthCare Technologies Inc. (NASDAQ:GEHC)
D1 Capital Partners’s Stake as of Q4: $272.5 million
Number of Hedge Fund Holders: 50
GE Healthcare Technologies Inc. (NASDAQ:GEHC) is a healthcare company that develops products and services for diagnosing, treating, and monitoring patients. The firm spun off from General Electric in early 2023.
On March 27, GE HealthCare Technologies Inc. (NASDAQ:GEHC) announced the debut of the FDA-approved Flyrcado imaging agent for the diagnosis of suspected coronary artery disease at the 2025 American College of Cardiology Annual Scientific Session & Expo. The company also announced that it would be displaying its latest AI-powered invention, the CardIQ Suite.
On April 23, Piper Sandler analyst Jason Bednar lowered his price target for GE HealthCare Technologies Inc. (NASDAQ:GEHC) to $88 from $104. Despite this change, the analyst maintained an Overweight rating for the company. Bednar’s assessment highlights worries about the possible impact of tariffs and trade tensions on GE HealthCare’s profitability, especially given the company’s considerable revenue exposure to China and its part in sourcing. While he believed that the recent sell-off in GE HealthCare Technologies Inc. (NASDAQ:GEHC) shares was excessive, he advised that picking up the stock right now would either require a high risk tolerance or a longer-term investment horizon of more than a year.
River Road Large Cap Value Select Fund stated the following regarding GE HealthCare Technologies Inc. (NASDAQ:GEHC) in its Q4 2024 investor letter:
“As of December 31, the portfolio held 29 positions, up four positions from Q3. During Q4, the largest sector increase was 736 bps within industrials, while the largest decrease was -276 bps within consumer discretionary. We established five new positions and eliminated one position.
We eliminated GE HealthCare Technologies Inc. (NASDAQ:GEHC) (GEHC, 2.5 conviction) during the quarter as the stock traded near its assessed value and we have some concerns around the demand shortfalls in China (11% of revenue). The management team has demonstrated strong execution since its spinoff from GE in January 2023 with 140 bps of margin expansion and 400 bps of organic topline growth. We placed GEHC on our watch list and would happily repurchase shares if it trades at a sufficient discount.”
6. Entegris, Inc. (NASDAQ:ENTG)
D1 Capital Partners’s Stake as of Q4: $272.7 million
Number of Hedge Fund Holders: 47
Entegris, Inc. (NASDAQ:ENTG) is a global semiconductor equipment company that primarily provides products and services that assist chip makers in maintaining the purity of their products during manufacturing processes.
Entegris, Inc. (NASDAQ:ENTG) posted fourth-quarter 2024 results that surpassed analyst expectations, with adjusted earnings per share of $0.84 and revenue of $849.84 million, both exceeding the average forecast. However, the company offered lower-than-expected guidance for the first quarter of 2025, estimating adjusted EPS of $0.64 to $0.71 and revenues of $775 million to $805 million. That said, Entegris, Inc. (NASDAQ:ENTG) has achieved a notable milestone by being included in the S&P MidCap 400 index, which may increase its visibility to investors.
Furthermore, on April 16, Entegris, Inc. (NASDAQ:ENTG) reported that its board of directors had authorized a quarterly cash dividend of $0.10 per share to be paid on May 21 to shareholders of record at the close of business on April 30.
The London Company Mid Cap Strategy stated the following regarding Entegris, Inc. (NASDAQ:ENTG) in its Q4 2024 investor letter:
“Entegris, Inc. (NASDAQ:ENTG) – ENTG underperformed during 4Q due to a more sluggish market recovery, particularly in mainstream and 3D NAND areas, as well as providing a cautious outlook. That said, its solutions for advanced technology and incremental wafer content gains should propel a faster recovery next year. ENTG is one of the most diversified players in the semi-materials industry with its size and scale. We remain attracted to the industry’s high barriers to entry, limited competitors, and high switching costs.”
5. Elevance Health, Inc. (NYSE:ELV)
D1 Capital Partners’s Stake as of Q4: $294.7 million
Number of Hedge Fund Holders: 73
Elevance Health Inc. (NYSE:ELV), formerly Anthem, Inc., is a vital health-benefits provider in the United States. Anthem Blue Cross, Blue Shield, Wellpoint, and Carelon are some of the brands under which the company offers medical, pharmaceutical, dental, long-term care, disability, and behavioral health insurance.
On April 24, Cantor Fitzgerald reiterated its solid outlook on Elevance Health Inc. (NYSE:ELV), keeping an Overweight rating and a $485 price target. Sarah James, the firm’s analyst, stated that Elevance’s performance is beginning to be evaluated more positively than that of its sector peers, especially after finishing a clean financial quarter. According to James, if these trends continue, Elevance holds the potential to surpass its financial guidance slightly.
Elevance Health’s first-quarter financial results for 2025 surpassed Wall Street forecasts, with adjusted earnings per share of $11.97 compared to an estimate of $11.08. The company’s revenue totaled $48.9 billion, 5% higher than expected. Notably, Elevance’s Carelon division saw impressive growth, with revenues jumping to $16.7 billion, representing a year-over-year rise of 37.9%.
Artisan Select Equity Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q4 2024 investor letter:
“Elevance Health, Inc. (NYSE:ELV) took a couple of blows this quarter. First, it warned that its Medicaid earnings would come in below expectations this year. The Medicaid business has been in the spotlight as a result of COVID-19. Medicaid rolls filled up during the pandemic, but then rolls started to come down as enrollees lost eligibility when the economy began to normalize. This has made estimating the severity and health trends of the remaining population difficult. So far this year, cost trends have been much worse than expected and are out of line with Elevance’s approved rate structure. Margins in the Medicaid business, therefore, will be down this year, and overall profits are likely to be flat. We believe this is a temporary situation. State Medicaid programs are legally required to pay actuarially sound rates to the providers of Medicaid services, such as Elevance. Rates are expected, therefore, to moveupwardoverthenext12to18months,restoring Elevance’s margins to a more normal level.
The second issue for Elevance is investor sentiment. A mentally deranged young man murdered top executive of United Healthcare, the largest health insurer in the country. This led to an Internet frenzy of vicious, inaccurate and, frankly, deplorable criticisms of health insurance companies and their executives. Negative and controversial headlines tend to hurt share prices. This was true of Elevance’s stock in the aftermath of this heinous crime. The share price has fallen to extremely attractive levels, trading currently at about 11X earnings. We added to our position during this weakness.”
4. Constellation Brands, Inc. (NYSE:STZ)
D1 Capital Partners’s Stake as of Q4: $337.6 million
Number of Hedge Fund Holders: 51
Constellation Brands, Inc. (NYSE:STZ) is a leading manufacturer and marketer of beer, wine, and spirits, best known for its portfolio of premium imported beer brands including Corona Extra, Modelo Especial, and the Modelo Cheladas line.
Constellation Brands, Inc. (NYSE:STZ) reported fourth-quarter earnings for fiscal year 2025 that were above expectations, with earnings per share of $2.63, up from the average estimate of $2.28.
On April 15, RBC Capital Markets lowered its price target for Constellation Brands, Inc. (NYSE:STZ) shares to $233 from $289 while maintaining an Outperform rating. The change comes following Constellation Brands’ fiscal fourth-quarter results, which showed higher demand issues, particularly among its key Hispanic customer base. Despite these setbacks, RBC Capital anticipates that the revised projection sets a reasonable target for the company to reach or exceed in the coming years. The company’s EPS projection for FY2026 is $12.42, with experts expecting a return to profitability this year.
3. Royal Caribbean Cruises Ltd. (NYSE:RCL)
D1 Capital Partners’s Stake as of Q4: $362.2 million
Number of Hedge Fund Holders: 58
Royal Caribbean Cruises Ltd. (NYSE:RCL) is a global cruise company that operates under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, among others, and offers a wide range of itineraries.
On April 9, Stifel analysts led by Steven Wieczynski reduced the price target for Royal Caribbean Cruises Ltd. (NYSE:RCL) from $310 to $265. However, the firm still recommends the stock with a Buy rating. The change indicates a cautious approach due to a significant market decline and an uncertain consumer environment, prompting investors to seek out solid equities that may have been oversold.
The company has signed a credit agreement to fund its seventh Oasis-class ship, which will be delivered in the second quarter of 2028. This loan, guaranteed by BpiFrance Assurance Export, will be repaid over twelve years. Additionally, Royal Caribbean Cruises Ltd. (NYSE:RCL) announced a debt-for-equity exchange involving $200 million of its Convertible Senior Notes to optimize its capital structure.
2. Philip Morris International Inc. (NYSE:PM)
D1 Capital Partners’s Stake as of Q4: $436.8 million
Number of Hedge Fund Holders: 102
Philip Morris International Inc. (NYSE:PM) is a major multinational tobacco company with operations in over 180 countries. It is well-known for its flagship product, Marlboro, which has cemented its position among “Big Tobacco” leaders.
On April 24, Stifel analysts raised their price target on Philip Morris International Inc. (NYSE: PM) shares from $168 to $186 while maintaining a Buy rating. The upgrade follows the company’s solid first-quarter performance, which included significant organic revenue and profit growth, as well as a consistent improvement in constant currency earnings per share. Philip Morris reported more than 10% organic revenue increase, which was fueled in part by over 4% volume growth. Smoke-free products played a significant role in this expansion. The company further disclosed a 16% increase in organic operating profit and a 17% increase in constant currency EPS. Its reported earnings per share of $1.69 were above Stifel’s projection by $0.07 and $0.06 higher than the high end of its own guidance.
1. Maplebear Inc. (NASDAQ:CART)
D1 Capital Partners’s Stake as of Q4: $934 million
Number of Hedge Fund Holders: 60
Maplebear Inc. (NASDAQ:CART), also known as Instacart, provides a grocery delivery platform that is well-known throughout the United States, with over 600,000 drivers and a network of about 8 million monthly active customers. It also benefits from its strategic alliance with Uber Technologies, which improves delivery via the Instacart app.
Maplebear Inc. (NASDAQ:CART) has also launched the Smart Shop feature, which uses artificial intelligence to customize grocery shopping, and Health Tags and Inspiration Pages, which provide extensive nutritional information and expert-backed health advice to grocers.
On April 11, JMP Securities analysts, led by Andrew Boone, maintained Maplebear Inc. (NASDAQ:CART)’s Market Outperform rating and price target of $55. The analysts emphasized Instacart’s competitive environment, particularly with vertically integrated e-commerce retailers like Walmart. Despite this, they stressed the massive scale of the US grocery sector, valued at more than $700 billion, that can sustain numerous players. The JMP team noted the strategic advantage of mid-tier supermarkets partnering with Instacart to compete with larger retailers. They also noted the company’s ability to increase revenue and margins by providing more software-based tools to retailers.
While we acknowledge the potential for CART 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CART but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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