In this article, we discuss Billionaire Brian Higgins’ Stock Picks with Huge Upside Potential.
Brian J. Higgins, founder and managing partner of King Street Capital, recently emphasized that successful investing in complex global markets required a blend of “analytical rigor” and “trading acumen” to navigate shifting liquidity cycles. During the FII Priority conference, he highlighted the evolving investment landscape in the Middle East, specifically announcing a new partnership with the Public Investment Fund (PIF) in Saudi Arabia to develop a credit fund for the region. Higgins noted that for survival in the credit markets, investors must remain “skeptical” and “conservative,” stating that “the key hallmark of investors that survive are those who… balance it with the trading acumen to be able to pick the entry and exit points and be respectful of liquidity or lack thereof”.
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Regarding global infrastructure and the impact of emerging technologies like AI, Higgins warned that a “misallocation of resources” often occurred when capital was diverted from essential maintenance toward speculative trends. He pointed out that while innovation generally raised the global standard of living, it could also lead to a $15 trillion infrastructure gap if current depreciation was not met with adequate capital expenditure. Higgins observed that “politicians around the world” often hesitated to raise taxes for replenishment, leading to a situation where “if any organization… underspend today, it’ll be the future people’s problem”. He remained cautious about valuation “outer bounds,” noting that while King Street was active in the AI ecosystem, financing GPU chips and data centers, they also saw significant “short opportunities” where market enthusiasm had led to billions in “misspending of assets”.
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Our Methodology
For this article, we selected stocks by combing through the 13F portfolio of King Street Capital at the end of the fourth quarter of 2025. The top stocks were ranked based on their analyst upside potential and the top 10 from this list were filtered out. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database of 1041 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Billionaire Brian Higgins’ Stock Picks with Huge Upside Potential
10. Annaly Capital Management, Inc. (NYSE:NLY)
King Street Capital’s Stake: $32 Million
Analyst Upside Potential: 6%
Annaly Capital Management, Inc. (NYSE:NLY) has featured in the 13F portfolio of King Street Capital since the third quarter of 2025. When the position was first disclosed, the fund owned 600,000 shares in the company. Filings for the fourth quarter of 2025 show that the fund owned over 1.4 million shares in the firm, up close to 137% compared to filings for the previous quarter. The company operates a diversified capital manager, engaged in the residential mortgage finance business. It invests in agency mortgage-backed securities collateralized by residential mortgages, non-agency residential whole loans, and securitized products within the residential and commercial markets.
Interest in Annaly Capital Management, Inc. (NYSE:NLY) is driven primarily by its role as a high-yield stabilizer in a shifting interest rate environment. The firm has performed a successful diversification beyond just Agency Mortgage-Backed Securities. It has shifted significantly toward Residential Credit and Mortgage Servicing Rights. These assets act as a natural hedge against rising rates because they become more valuable when refinancing activity slows down. Annaly’s residential credit arm, Onslow Bay, hit record volumes in Q4 2025. The firm has consistently out-earned its dividend. While many high-yield REITs were forced to cut distributions during the volatility of 2024 and 2025, Annaly generated an 8.6% economic return in Q4 2025 alone and over 20% for the full year.
9. LPL Financial Holdings Inc. (NASDAQ:LPLA)
King Street Capital’s Stake: $37 Million
Analyst Upside Potential: 12%
LPL Financial Holdings Inc. (NASDAQ:LPLA) is a new addition to the 13F portfolio of King Street Capital. Filings for the fourth quarter of 2025 show that the fund owned 104,000 shares in the company. The firm provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at institutions in the United States. The brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and education savings plans, and insurance.
Elite investors view LPL Financial Holdings Inc. (NASDAQ:LPLA) as an acquisition engine. The company recently integrated Atria Wealth Solutions and is on track to complete the massive Commonwealth Financial Network conversion in late 2026. These acquisitions are expected to add approximately $425 million in run-rate EBITDA. Top hedge funds see the company as the ultimate consolidator in the fragmented independent advisor space, allowing it to scale costs while growing assets. Another driver for institutional interest has been the rebound in client cash balances. LPL reported that client cash balances increased to $61 billion in Q4 2025. The firm achieved a record $2.4 trillion in total client assets at the start of 2026. It also recruited over $104 billion in assets during 2025 alone.
8. Ally Financial Inc. (NYSE:ALLY)
King Street Capital’s Stake: $20 Million
Analyst Upside Potential: 15%
Ally Financial Inc. (NYSE:ALLY) is a long-term holding in the 13F portfolio of King Street Capital. The fund first disclosed a stake in the company in the fourth quarter of 2016. This holding comprised 2.5 million shares. The hedge fund added to this stake in the coming months, growing it to more than 6.9 million shares by the first quarter of 2018. Thereafter, it started trimming this holding, reducing it by half in the next quarter and selling it off completely by early 2019. A new position was then opened in the third quarter of 2025. This comprised just over 440,000 shares. Filings for the fourth quarter of 2025 show that the fund owns just under 440,000 shares in the company.
Ally Financial Inc. (NYSE:ALLY) stock has started turning heads on Wall Street as a coiled spring for earnings growth as interest rate pressures begin to ease and credit metrics stabilize. In its Q1 2026 report, Ally delivered an adjusted EPS of $1.11, representing a 90% year-over-year increase. Hedge funds are rewarding management for their strategy of shedding non-core assets, like the recent sale of their credit card business, to focus on high-return retail auto and corporate finance. Management expects to exit 2026 with a NIM at or above 3.7%, up from 3.52% in Q1. Because Ally is a digital bank with a massive $146 billion deposit base, even a small expansion in margin translates to hundreds of millions in additional profit.
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7. The Boeing Company (NYSE:BA)
King Street Capital’s Stake: $144 Million
Analyst Upside Potential: 19%
The Boeing Company (NYSE:BA) has featured in the 13F portfolio of King Street Capital consistently since the fourth quarter of 2024. Back then, this position comprised 500,000 shares. The fund added to this stake by 80% in the next quarter, growing ownership to 900,000 shares. In the following two quarters, it trimmed this holding, reducing it by 16% and 22%. Filings for the fourth quarter of 2025 show that the fund owned 664,000 shares in the company, up 13% compared to filings for the previous quarter. The firm designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.
For the first time since 2019, The Boeing Company (NYSE:BA) outpaced Airbus in commercial deliveries during Q1 2026, handing over 143 aircraft. Hedge funds view this as the definitive end of Boeing’s multi-year production crisis. The ability to out-deliver its primary rival signals that supply chain constraints and regulatory caps are finally in the rearview mirror. With a record $695 billion backlog, over 6,100 aircraft, the stock is being treated as a guaranteed revenue play for the next decade. After burning through billions for years, Boeing reported a significantly narrowed loss in Q1 2026 and confirmed it is on track for positive Free Cash Flow in 2026. Analysts at TD Cowen and RBC are modeling a massive ramp to $5.6 billion in FCF for the full year 2026, potentially reaching over $11 billion by 2028.
6. RH (NYSE:RH)
King Street Capital’s Stake: $16 Million
Analyst Upside Potential: 21%
RH (NYSE:RH) is a new addition to the 13F portfolio of King Street Capital. Filings for the fourth quarter of 2025 show that the fund owns 87,000 shares in the company. RH operates as a retailer and lifestyle brand in the home furnishings market in the United States, Canada, the United Kingdom, Germany, Belgium, and Spain. It offers merchandise in various categories, including furniture, lighting, textiles, bath ware, décor, and outdoor and garden furnishings, as well as baby, child, and teen furnishings.
RH (NYSE:RH) CEO Gary Friedman has argued that his firm is at peak investment during a housing trough. Under this plan, the company is aggressively opening new Design Galleries in Europe, in places like Madrid, London, and Brussels, and expanding into luxury ecosystem services, like RH Media and RH Guesthouses. Smart money managers often buy the stock during these high-expense periods, betting that when the housing market recovers and the investment cycle scales back, profit margins will explode. Despite a difficult macroeconomic environment, RH has significantly outperformed its peers in the furniture and home décor space. In fiscal 2025, the firm achieved 8% revenue growth, which was 8 to 30 percentage points higher than its industry competitors.
While we acknowledge the potential of RH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RH and that has 100x upside potential, check out our report about the cheapest AI stock.
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