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.
8. Primo Brands Corporation (NYSE:PRMB)
D1 Capital Partners Equity Stake: $142.47 Million
Stock Upside Potential: 40.36%
Stock Performance (end Q2 – October 30): -27.52%
Number of Hedge Fund Holders: 72
Primo Brands Corporation (NYSE:PRMB) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 28, Mizuho revised its price target for Primo Brands Corporation (NYSE:PRMB), reducing it from $40 to $35, while maintaining its Outperform rating on the stock.
Earlier on October 17, Jefferies initiated coverage of the stock with a ‘Hold’ rating and a $23 price target. The research firm has echoed the company’s position at the intersection of scale and structural growth. Its premium offerings are expected to maintain the upside momentum as growing cash flow provides the much-needed flexibility. However, the research firm echoed the Hold stance, citing concerns about integration complexity that could limit near-term visibility. The research firm insists the company needs to demonstrate execution proof points.
Moreover, on October 8, BofA Securities analyst Peter Galbo lowered the price target for Primo Brands from $32 to $26 but reaffirmed a Buy rating. Galbo explained that BofA is reducing Q3 projections for revenue and earnings per share across its consumer staples portfolio, with Primo Brands among the affected companies. Despite the downward revision, the continued Buy rating signals confidence in Primo’s core business strength.
Primo Brands Corporation (NYSE:PRMB) is a North American beverage company focused on healthy hydration that distributes a broad portfolio of bottled water brands through retail and home delivery channels. It is a large bottled water company that owns brands like Poland Spring, Pure Life, Mountain Valley, and Saratoga, and its products include spring, sparkling, and purified water.
7. Amazon.com Inc. (NASDAQ:AMZN)
D1 Capital Partners Equity Stake: $153. 77 Million
Stock Upside Potential: 20.33%
Stock Performance (end Q2 – October 30): 5.99%%
Number of Hedge Fund Holders: 335
Amazon.com Inc. (NASDAQ:AMZN) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 29, Amazon unveiled Project Rainier, a sprawling AI data center built on a 1,200-acre site near Lake Michigan. Powered by nearly 500,000 Trainium2 chips, the $11 billion cluster is already operational and training models for Anthropic, the startup behind Claude. Unlike other tech giants still in planning mode, Amazon’s facility is live, underscoring its ability to execute large-scale infrastructure projects quickly.
As demand for AI compute surges, companies like Meta, Alphabet, and OpenAI are racing to build supercomputing hubs. OpenAI alone has committed to 33 gigawatts of new capacity, backed by major chipmakers and cloud providers. Amazon’s deep experience in logistics and strong ties with local governments have helped it move faster than most.
Anthropic, supported by Amazon, is tapping into the power of Project Rainier to develop and run its AI model, Claude. By year-end, the company plans to scale operations using over a million of Amazon’s Trainium2 chips through AWS. Amazon also confirmed that Rainier’s infrastructure will be used to support future iterations of Claude.
Amazon.com Inc. (NASDAQ:AMZN) is a technology company that offers a diverse range of services, including e-commerce, cloud computing, digital streaming, advertising, and artificial intelligence.
6. Alaska Air Group, Inc. (NYSE:ALK)
D1 Capital Partners Equity Stake: $155.51 Million
Stock Upside Potential: 56.32%
Stock Performance (end Q2 – October 30): -16.33%
Number of Hedge Fund Holders: 41
Alaska Air Group Inc. (NYSE:ALK) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 23, Alaska Air Group Inc. (NYSE:ALK) reported third-quarter revenue of $3.8 billion, a 23% increase year-over-year and slightly above expectations.
Despite the top-line strength, earnings fell short: GAAP net income came in at $0.62 per share, well below last year’s $1.84 and missing analyst estimates. Adjusted EPS was $1.05, also under forecasts. Operating cash flow reached $229 million, and the company held $2.3 billion in liquidity at quarter-end.
The airline repurchased 10.6 million shares for $540 million through September, signaling confidence in its long-term outlook. However, unit costs rose 8.6% due to IT recovery expenses and adverse weather. While revenue hit a new high, profitability faced headwinds that tempered investor enthusiasm.
Alaska Air Group Inc. (NYSE:ALK) is a holding company that operates major airlines, including Alaska Airlines, Hawaiian Airlines, and Horizon Air. Its primary business is providing passenger and cargo air transportation services, with an extensive network that connects the western U.S. and beyond to cities across North America, Central America, and other global destinations.
5. Louisiana-Pacific Corporation (NYSE:LPX)
D1 Capital Partners Equity Stake: $155.81 Million
Stock Upside Potential: 23.21%
Stock Performance (end Q2 – October 30): -2.19%
Number of Hedge Fund Holders: 49
Louisiana-Pacific Corp (NYSE:LPX) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 30, Louisiana-Pacific Corp (NYSE:LPX) said it will pay a cash dividend of $0.28 per share to its common shareholders. The payment is scheduled for November 21, to shareholders of record as of November 14.
Earlier on October 10, DA Davidson reiterated a ‘Buy’ rating on Louisiana-Pacific Corp (NYSE:LPX) and a $117 price target. The positive stance comes as the research firm expects the company to fill the market void left by the exit of a small fiber-cement player.
Nichicha is poised to close its primary manufacturing plant that produces residential lap, panel, trim, and shake products. According to the research firm, the closure should create a void that Louisiana-Pacific Corp can capitalize on. Additionally, the research believes the shares are trading at attractive levels given the business’s strong margin profile. It also echoed the durable above-market growth profile as one factor that affirms why the stock is a buy at current levels.
Based in Nashville, Tennessee, LP Building Solutions (NYSE:LPX) makes engineered wood materials used in construction, such as siding and structural panels. The company runs over 20 manufacturing plants across the U.S., Canada, Chile, and Brazil. Founded in 1972 and previously known as Louisiana-Pacific Corporation, LP trades on the New York Stock Exchange under the symbol LPX.
4. Apollo Global Management, Inc. (NYSE:APO)
D1 Capital Partners Equity Stake: $200.75 Million
Stock Upside Potential: 26.06%
Stock Performance (end Q2 – October 30): -12.06%
Number of Hedge Fund Holders: 86
Apollo Global Management (NYSE:APO) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 22, reports emerged indicating Apollo Global Management (NYSE:APO) is in the process of divesting its Hispanic grocery chain Heritage Grocers Group. The sale is expected to fetch about $1.5 billion.
The divestment comes amid growing fears that immigration raids will weaken consumer demand among Latino communities across the US. Consequently, it has engaged investment bank UBS to maximize value from the sale.
Heritage Grocers Group generated $150 million in earnings before interest, taxes, depreciation, and amortization, with over $2 billion in revenue. However, in recent months, the chain’s performance has come under pressure due to weak consumer spending. Additionally, rating agencies have downgraded the company’s credit rating due to soft consumer spending.
Apollo Global Management (NYSE:APO) is a global asset manager and capital provider that offers investment solutions and retirement services. It invests in various public and private markets, including credit, equity, and real assets.
3. Philip Morris International Inc. (NYSE:PM)
D1 Capital Partners Equity Stake: $223.12 Million
Stock Upside Potential: 27.27%
Stock Performance (end Q2 – October 30): -19.34%%
Number of Hedge Fund Holders: 111
Philip Morris International Inc. (NYSE:PM) is one of billionaire Daniel Sundheim’s stock picks with huge upside potential. On October 22, analysts at Stifel reiterated a ‘Buy’ rating on Philip Morris International Inc. (NYSE:PM) and $180 price target.
The bullish stance comes on the heels of a robust third quarter, during which the company’s smoke-free portfolio continued to outgrow the industry by a clear margin while driving positive total volumes and top-line growth. Earnings per share in the quarter grew 13.2% as diluted EPS rose 17.3% to $2.24.
Philip Morris expects the third-quarter momentum to continue into year-end, with full-year EPS increasing by between 13.5% and 15.1%, ranging from $7.39 to $7.49 a share. It also expects organic revenue growth of 6% to 8%.
Stifel expects the inventory reduction headwind to be temporary and remains confident of the company’s top-line and EPS growth profile relative to consumer staple peers.
Philip Morris International Inc. (NYSE:PM) is a consumer goods company that sells a variety of products, with a strategic focus on shifting from traditional cigarettes to a portfolio of smoke-free alternatives. Its current products include traditional cigarettes (led by Marlboro), as well as smoke-free products like heated tobacco (e.g., IQOS), e-vapor, and oral nicotine pouches (e.g., ZYN).
2. The Charles Schwab Corporation (NYSE:SCHW)
D1 Capital Partners Equity Stake: $321.52 Million
Stock Upside Potential: 20.94%
Stock Performance (end Q2 – October 30): 3.29%
Number of Hedge Fund Holders: 100
Charles Schwab Corporation (NYSE:SCHW) is one of billionaire Daniel Sundheim’s stock picks with tremendous upside potential. On October 17, analysts at TD Cowen reiterated a ‘Buy’ rating on Charles Schwab Corporation (NYSE:SCHW) and raised the price target to $134 from $129.
The research firm echoed the company’s third-quarter results, in which revenue was up 27% year over year to $6.1 billion and net income increased 70% to $2.4 billion, or $1.31 per share. The better-than-expected results underscore strong management execution, balance sheet flexibility, and reduced perception risk.
Consequently, TD Cowen expects Charles Schwab to achieve a return on tangible equity of 38% in 2026 and 40% in 2027. It also views the company as both defensive and offensive, given its balance sheet levers to offset the impact of interest rate cuts.
Charles Schwab Corporation (NYSE:SCHW) is a financial services company that provides a wide range of brokerage, banking, and financial advisory services to individuals and institutions. Its services include brokerage accounts, investment products, and financial planning, as well as banking services such as deposits and lending.
1. Maplebear Inc. (NASDAQ:CART)
D1 Capital Partners Equity Stake: $1.02 Billion
Stock Upside Potential: 42.76%
Stock Performance (end Q2 – October 30): -15.90%
Number of Hedge Fund Holders: 64
Maplebear Inc. (NASDAQ:CART) is one of billionaire Daniel Sundheim’s 10 stock picks with huge upside potential. On October 29, Wedbush revised its price target for Maplebear Inc. (NASDAQ:CART), trimming it from $42 to $40 while maintaining an Underperform rating.
The firm cited changing pricing patterns, including more restaurant orders and lower thresholds for free delivery, along with a growing share of revenue from advertising and enterprise services. While short-term projections remain steady, Wedbush adjusted its longer-term outlook downward.
Just days earlier, on October 23, Bernstein’s Nikhil Devnani reaffirmed a Buy rating on Maplebear, Instacart’s parent company, setting a price target of $63. The contrast highlights differing views on the company’s future amid evolving market dynamics.
Also on October 15, Maplebear Inc. rolled out new business features to support bulk ordering and team purchasing. The update includes dashboards, spending controls, and tools for managing orders and receipts. These additions strengthen Instacart’s e-commerce platform, helping retailers streamline operations and serve business clients more efficiently. Hundreds have already adopted the new tools.
“Expanding business features to retailers’ customers on their sites is part of our ongoing investment in enhancing retailer sites with tools that deliver added value and unlock new revenue from business customers. With more than one million business customers who have ordered from Instacart in the past year¹, we’re making it easier for retailers to capture more of this growing demand,” said Ryan Hamburger, Vice President of Retail Partnerships at Instacart.
Maplebear Inc. (NASDAQ:CART) is an online grocery delivery service that connects customers with local stores for same-day delivery or curbside pickup. Customers place orders through the Instacart app or website, and a personal shopper then shops for the items and either delivers them to the customer’s door or prepares them for pickup.
While we acknowledge the potential of CART 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 CART and that has 100x upside potential, check out our report about this cheapest AI stock.
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