In this article, we will take a look at Billionaire Daniel Sundheim’s 10 Stocks Picks with Huge Upside Potential.
The upward momentum in the equity market is likely to continue heading into the year-end. It is a stance held by major investment banks in response to the economy and consumers showing resilience. Corporations delivering healthy pre-Liberation Day growth of more than 12% in the face of tariff rates have also benefited from double-digit corporate earnings growth.
Analysts at Goldman Sachs expect the S&P 500 to power through the 6,600 level before year-end as investors continue to shun valuation concerns. The analysts also expect 7% earnings-per-share growth for the S&P 500 this year and next.
“Recent inflation data and corporate surveys indicate less tariff pass-through so far than we expected,” the analysts said, reported Reuters. “However, we expect the digestion of tariffs to be a gradual process, and large-cap companies appear to have some buffer from inventories ahead of the increase in tariff rates.”
D1 Capital Partners, founded by billionaire Dan Sundheim, is one hedge fund that continues to capitalize on the market’s strong bullish momentum. The hedge fund was up by 11.8% for the year as of April, even as the overall market crumbled amid the weight of US tariffs.
The strong performance underscores how legendary investor Dan Sundheim has made a name for himself by generating significant returns regardless of the prevailing economic cycle. The former chief investment officer of Viking Global Investors is one of the most revered hedge fund managers on Wall Street. He launched D1 Capital Partners in 2018 with about $5 billion in capital after leaving Viking Global Investors, because he grew frustrated with the lack of a more flexible mandate.
“I think of Dan like LeBron James. Whatever team he is on is going to be a contender because he makes everyone else around him so much better,” one of Sundheim’s former Viking colleagues told Business Insider.
D1 Capital Partners has staged a strong recovery after tumbling 30.5% in 2022, stung by plunging tech stocks and declining venture valuations. Sundheim’s hedge fund is believed to have posted a 44% return on its portfolio in 2024, driven by strategic investments. The fund’s focus on European valuation discount was one of the catalysts behind the strong performance.
“We believe there is currently an extremely attractive opportunity to buy great businesses that trade on non-US exchanges,” Sundheim wrote in the letter.
As the equity market continues to edge higher amid the US Federal Reserve’s easing cycle, let’s look at some of billionaire Daniel Sundheim’s stock picks with huge upside potential.
Daniel Sundheim of D1 Capital Partners
Our Methodology
To make the list of the best billionaire Daniel Sundheim’s 10 stock picks with huge upside potential, we scanned D1 Capital Partners’ investment portfolio. We settled on stocks with more than 20% upside potential (as of October 30) and that were popular among elite hedge funds in Q2 2025. We examined the stock’s performance from the end of the second quarter (June 30) through October 30 to provide readers insight into whether the hedge fund has been right or wrong about betting on the stock, so far. Finally, we ranked the stocks in ascending order based on the value of D1 Capital Partners’ equity stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Billionaire Daniel Sundheim’s Stocks Picks with Huge Upside Potential
10. Lexeo Therapeutics Inc. (NASDAQ:LXEO)
D1 Capital Partners Equity Stake: $3.93 Million
Stock Upside Potential: 95.14%
Stock Performance (end Q2 – October 30): 138.79%
Number of Hedge Fund Holders: 15
Lexeo Therapeutics (NASDAQ:LXEO) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 21, Leerink’s Mani Foroohar lowered the price target on Lexeo Therapeutics (NASDAQ:LXEO) from $20 to $18 but maintained an Outperform rating.
The revision followed Lexeo’s $135 million capital raise through a secondary offering and private placement, along with new data from its LX2020 PKP2 program. Leerink viewed the move as a smart step to strengthen the company’s financial position ahead of its upcoming FACM trial, keeping the spotlight on clinical progress rather than funding concerns.
Earlier, on October 16, Lexeo Therapeutics announced a public offering and private placement totaling roughly $135 million in gross proceeds. The company offered over 15.6 million shares at $8 each, with underwriters granted a 30-day option to buy more.
Lexeo Therapeutics (NASDAQ:LXEO) is a clinical-stage genetic medicine company focused on developing adeno-associated virus (AAV)-based gene therapies for genetically defined cardiovascular diseases and a specific form of Alzheimer’s disease. The company uses cutting-edge science to create treatments that address the underlying genetic causes of these devastating conditions.
9. Affirm Holdings, Inc. (NASDAQ:AFRM)
D1 Capital Partners Equity Stake: $56.69 Million
Stock Upside Potential: 30%
Stock Performance (end Q2 – October 30): 7.46%
Number of Hedge Fund Holders: 70
Affirm Holdings, Inc. (NASDAQ:AFRM) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 31, Affirm Holdings, Inc. (NASDAQ:AFRM) expanded its partnership with New York Life Insurance, which agreed to buy up to $750 million in installment loans through 2026.
This builds on their 2023 relationship and brings Affirm fresh funding to support $1.75 billion in annual loan volume. New York Life has already invested nearly $2 billion in Affirm’s loan structures, reflecting a broader trend of insurers tapping into consumer finance as rising interest rates boost returns. Affirm has also secured backing from Liberty Mutual, PGIM, and Sixth Street Partners in recent years.
Earlier on October 21, Affirm Holdings, Inc. announced an expanded partnership with Wayfair. The strategic partnership is poised to bring Affirm payment solutions directly into Wayfair’s checkout process, both online and in-store. The integration of the Affirm payment solution into Wayfair checkout underscores growing demand amid strong customer interest over the eight-year relationship. On October 16, Affirm broadened its buy now, pay later reach by partnering with Fanatics and FreshBooks. A week earlier, on October 9, the company voiced support for Google’s Agent Payments Protocol (AP2), a system built to facilitate secure transactions via AI-driven and automated platforms.
Affirm Holdings, Inc. (NASDAQ:AFRM) is a financial technology company that provides a “buy now, pay later” service, allowing customers to purchase items and pay over time through a series of installments, as the Company explains. For consumers, Affirm offers transparent loans with no hidden fees or late penalties. At the same time, for merchants, it provides a way to increase sales by offering flexible payment options to their customers.
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