David Abrams founded Abrams Capital Management in 1999. Before forming the Boston-based investment firm, Abrams worked at Seth Klarman’s Baupost Group for 10 years. He graduated from the University of Pennsylvania with a BA degree in History, where he also served on the Board of Advisors of the College of Arts and Sciences. Abrams didn’t have a finance background when he got his first job in New York in the early 1980s. He learned all about investing under Seth Klarman before setting out independently after a decade. He is a value investor, and in the ~12 years of his fund, he has achieved an annualized return of around 20%. His firm is like a one-man shop, which employs a small staff. Abrams Capital has 9 clients and discretionary assets under management (AUM) of $10.05 billion, as reported in the firm’s Form ADV dated 13 January 2025. The last reported 13F filing for Q4 2024 included $6.22 billion in managed 13F securities and a top 10 holdings concentration of 98.7%.
Abrams is known for maintaining a low public profile, but in a conversation on Columbia Business School’s ‘Value Investing with Legends’ Podcast series, he discussed the surface of his foundational principles when it comes to his investment philosophy. He starts by looking at the risks first and foremost, without any consideration of prospective gains. This is a reminder that the future remains unpredictable, which Abrams puts in the following words:
“When you look back, there’s one path that happened, but that doesn’t mean that going forward there’s only one path. In the future, there’s multiple paths.”
Abrams’ portfolio reflects a balanced approach with exposure to growth sectors like Industrials and Consumer Cyclical, while also maintaining moderate allocations in established industries such as Communication Services. He also believes that declining industries can present stability because they attract limited new entrants. This also implies that high-growth sectors are, on the contrary, characterized by intense competition, which necessitates a more detailed analysis of potential competitive threats. Here’s what Abrams had to say about this:
“If you have a shrinking industry and it’s dying, it’s like, people are not dying to get into that.”
Abrams serves as a director of several private companies. He is currently on the board of MITMCO, which manages the MIT endowment. Previously, he was a trustee of Berklee College of Music for 15 years, where he chaired the investment committee. He was also the trustee of Milton Academy.
That being said, we’re here with a list of billionaire David Abrams’ 10 stock picks with huge upside potential.
David Abrams of Abrams Capital Management
Our Methodology
To compile the list of billionaire David Abrams’ 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Abrams Capital Management from Insider Monkey. From these filings, we checked each stock’s upside potential from CNN and ranked the stocks in ascending order of this upside potential. We have also added Abrams Capital Management’s stake in each stock as well as the broader hedge fund sentiment for it.
Note: All data was sourced on May 8.
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).
Billionaire David Abrams’ 10 Stock Picks with Huge Upside Potential
10. Asbury Automotive Group Inc. (NYSE:ABG)
Abrams Capital Management’s Stake: $512.44 million
Number of Hedge Fund Holders: 32
Average Upside Potential as of May 8: 8.11%
Asbury Automotive Group Inc. (NYSE:ABG) is an automotive retailer in the US. It offers a range of automotive products and services, such as new & used vehicles, vehicle repair & maintenance services, replacement parts, collision repair, and reconditioning of used vehicles. It also provides finance and insurance products, like arranging vehicle financing through third parties.
Asbury’s parts and service division achieved a record in gross profit in Q1 2025. Same-store gross profit in parts and service saw an increase of 5% year-over-year, with customer pay gross profit specifically up by 6%. This growth particularly accelerated in March and reached 7% due to warranty work. The gross profit margin for the parts and service business expanded by 1.7% to 58.3%, fueled by the segment’s increased profitability of higher-margin components.
The company also highlighted the customer growth pay gross profit at stores they have operated since 2014. This metric ~doubled and increased by 97% over 10 years. Asbury Automotive Group Inc. (NYSE:ABG) believes that the aging vehicle fleet and the increasing complexity of modern cars position the company’s stores favorably to capture further service growth.
Artisan Mid Cap Value Fund stated the following regarding Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2024 investor letter:
“Our next largest new position was Asbury Automotive Group, Inc. (NYSE:ABG), a franchised automative dealer. Our purchase of ABG was in conjunction with selling auto retailer AutoNation (AN). We like both companies. Auto dealerships are good businesses, and both companies are growing well. However, we prefer ABG’s business mix to that of AN as AN is investing more heavily in its used car dealership business, which we believe is a poorer use of capital, and its captive finance arm is more vulnerable in an economic downturn. ABG remains solely focused on buying and running top-quality dealerships, and it has the best margins in the industry. ABG is also selling cheaply. As we see it, the market still thinks auto dealerships are highly cyclical, not giving them enough credit for their steadily growing parts and services business, secular market share gains versus independent mechanics and retailers, and their penetration growth in the used car market.”
9. Coupang Inc. (NYSE:CPNG)
Abrams Capital Management’s Stake: $286.13 million
Number of Hedge Fund Holders: 87
Average Upside Potential as of May 8: 9.02%
Coupang Inc. (NYSE:CPNG) owns and operates retail businesses through its mobile applications and internet websites in South Korea and internationally. It operates through the Product Commerce and Developing Offerings segments. It also performs operations and support services in the US, South Korea, Taiwan, Singapore, China, Japan, and India.
Coupang’s Product Commerce segment saw a 9% improvement year-over-year in Q4 2024. This was fueled by the increased efficiencies in operations, such as greater utilization of automation and technology, supply chain optimization, and the scaling of margin-accretive offerings. On February 26, Citi analysts assigned a Buy rating on the stock and raised its price target from $28 to $29.
This sentiment was driven by Coupang Inc.’s (NYSE:CPNG) impressive growth, a boost in active customers, and the strong performance of its Fastest Last-Mile delivery service. The number of active customers in the Product Commerce segment also grew by 10% year-over-year, and the average spend per active customer saw a constant currency increase of 6%.
Baron Fifth Avenue Growth Fund remains positive on the company’s long-term growth and stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q4 2024 investor letter:
“Shares of Coupang, Inc. (NYSE:CPNG), Korea’s largest e-commerce platform, corrected 10.5% in the fourth quarter (even though they finished 2024 up 33.9%). While the company delivered solid quarterly results with 27% year-on-year revenue growth with Farfetch and other initiative losses narrowing significantly, its product commerce EBITDA margin missed expectations due to a temporarily elevated spending on technology and automation. Sluggish domestic consumption in Korea, with the e-commerce market experiencing flattish to negative growth, and political uncertainty stemming from President Yoon’s declaration of martial law and subsequent impeachment, further weighed on the stock. Despite these short-term challenges, we maintain a positive outlook on Coupang’s long-term market share expansion and margin growth trajectory, and view Coupang as one of the most competitively advantaged e-commerce businesses globally, with significant runway for both revenue and earnings growth.”
8. Meta Platforms Inc. (NASDAQ:META)
Abrams Capital Management’s Stake: $326.57 million
Number of Hedge Fund Holders: 262
Average Upside Potential as of May 8: 15.61%
Meta Platforms Inc. (NASDAQ:META) is a technology company that owns leading social platforms. These include Facebook, Instagram, Messenger, WhatsApp, and Meta Quest VR under its Family of Apps (FoA) segment. It also employs AI across its platform to improve content discovery, ad delivery, and product development.
Meta’s FoA advertising revenue totaled $41.4 billion in Q1 2025, which was up 16% year-over-year. This segment accounts for the vast majority of Meta’s total revenue, which was $42.3 billion in Q1. This growth is attributed to a 5% increase in the total number of ad impressions served and a 10% increase in the average price per ad.
Meta Platforms Inc. (NASDAQ:META) is also investing in AI to further enhance its advertising capabilities. One example of early success from this integration includes a 30% increase in advertisers using AI creative tools in the last quarter alone. On April 30, BofA Securities analyst Justin Post maintained a Buy rating on the stock with a price target of $640 due to the company’s advancement in AI and particularly its open-source approach.
7. Willis Towers Watson (NASDAQ:WTW)
Abrams Capital Management’s Stake: $225.78 million
Number of Hedge Fund Holders: 48
Average Upside Potential as of May 8: 20.91%
Willis Towers Watson (NASDAQ:WTW) is an advisory, broking, and solutions company. It offers a range of services, such as strategy & design consulting and plan management service & support. Some of its group benefit programs include medical, dental, disability, life, voluntary benefits, and other coverages. It also provides advice, data, software, and products to address different client concerns.
The company’s Risk and Broking (R&B) segment showed a 7% organic growth in Q1 2025, which also marked its 9th consecutive quarter of high single-digit to double-digit growth. This was fueled by R&B’s specialization strategy and ongoing investments in talent, tech, and innovation. Within R&B, the Corporate Risk and Broking business also grew by 8%.
Willis anticipates mid to high single-digit growth for the full year 2025 for R&B alone. On March 18, UBS analyst Brian Meredith upgraded the stock’s rating from Neutral to Buy, while also increasing the price target from $344 to $395 per share. The analyst expects Willis Towers Watson (NASDAQ:WTW) to sustain an organic revenue growth of 5.9% in 2025, compared to a consensus estimate of 5.2%.
Heartland Mid Cap Value Fund has expectations for further margin and cash flow improvement at the company and stated the following regarding Willis Towers Watson Public Limited Company (NASDAQ:WTW) in its Q4 2024 investor letter:
“Another example of a successful self-help story is Willis Towers Watson Public Limited Company (NASDAQ:WTW). This insurance brokerage and consulting firm operates two segments: Health, Wealth, and Career (HWC) accounts for 58% of revenues and includes services such as retirement plan administration, health care plan outsourcing, and executive compensation consulting. The other segment, Risk & Broking (R&B), includes global insurance brokerage and risk management consulting services.
In 2020, competitor Aon Plc attempted to acquire WTW in an all-stock merger that would have created the world’s largest insurance brokerage. However, the Justice Department sued to block the merger, which was called off in July 2021. The turmoil from the split caused WTW to significantly underperform its peers on critical metrics including organic revenue, earnings growth, margins, and free cash flow conversion.
In 2022, CEO Carl Hess was brought in to turn the business around. He implemented a restructuring plan to transition the business from a roll-up with disparate systems into a streamlined operating company. Since then, organic growth has accelerated to peer-like performance. We expect WTW’s operating margin and free cash flow, which still trails that of its peers, to narrow driven by the sale of its underperforming Medicare brokers business along with continued operational streamlining efforts.
WTW currently trades at 17.1X consensus 2025 earnings and 13.1X EV/EBITDA, well below its peers, who are trading at a median PE of greater than 23X and 15.4X EV/EBITDA.”
6. Lithia Motors Inc. (NYSE:LAD)
Abrams Capital Management’s Stake: $854.68 million
Number of Hedge Fund Holders: 45
Average Upside Potential as of May 8: 30.94%
Lithia Motors Inc. (NYSE:LAD) is an automotive retailer in the US, the UK, and Canada. It operates in two segments: Vehicle Operations and Financing Operations. It sells its products and services through the Driveway and Greencars brand names through a physical location, e-commerce platforms, and finance & fleet management solutions.
The company’s finance operations segment operates under DFC (Driveway Finance Corp) and delivered $12.5 million in income in Q1 2025. This was an improvement from a $1.7 million loss year-over-year. Following a full year of profitability in 2024, Lithia Motors Inc. (NYSE:LAD) anticipates a consistent earnings trajectory for DFC in 2025.
During Q1, DFC originated $623 million in loans and marked a 24% sequential increase. This brought the total portfolio balance to over $4 billion. Lithia emphasizes that each loan originated by DFC contributes up to three times more profit than traditional indirect lending. Bank of America analyst John Murphy maintained his Buy rating on the stock, while increasing the price target from $410 to $460.
River Road Small-Mid Cap Value Fund highlighted the company’s overall resiliency and stated the following regarding Lithia Motors, Inc. (NYSE:LAD) in its Q4 2024 investor letter:
“Another top contributor during the quarter was Lithia Motors, Inc. (NYSE:LAD) one of the largest global automotive retailers operating in North America and the United Kingdom. In late June, the auto industry was impacted by a cyberattack on CDK Global’s dealership management system, which runs all back-office functions at Lithia as well as over 85% of all franchised dealers in the United States. In its Q2 2024 earnings release, LAD reported a -6.4% decline in same-store sales, driven primarily by a -4.7% decline in new vehicle units as LAD was not able to process sale transactions late in the quarter due to the CDK outage. Despite lower same-store sales, LAD outperformed expectations as its cost reduction initiatives and a shift in capital allocation resulted in sequential margin improvement and a lower share count. The company achieved its $150MM in annualized cost savings target ahead of schedule and now expects to double these savings by the end of 2024 through further inventory optimization and reductions. This will result in the all-important SG&A as a percentage gross profit declining to the mid-60s range and in line with LAD’s long-term target. Acquisitions have added $27B in annualized revenues since 2020, ahead of LAD’s goal of adding $25B in acquired revenues by 2025. Given the current high private market multiples for auto dealerships, LAD’s management has shifted its capital allocation toward share repurchases, buying back 2.9% of the company in Q2. With low net leverage of 2.3x and year-to-date free cash flow of $740MM, we expect management to continue repurchasing shares aggressively. During the quarter, we added to the position prior to its Q2 results.”
5. Alphabet Inc. (NASDAQ:GOOGL)
Abrams Capital Management’s Stake: $402.10 million
Number of Hedge Fund Holders: 234
Average Upside Potential as of May 8: 32.12%
Alphabet Inc. (NASDAQ:GOOGL) is a technology company that provides web-based search, consumer content, and advertisements through its subsidiaries. It operates through several segments, like Google Services, Google Cloud, and Other Bets. Its Gemini AI model, which is now in version 2.0, powers major services and advances scientific breakthroughs like AlphaFold.
On April 25, BMO Capital analyst Brian Pitz reiterated his bullish stance on the stock and highlighted that the AI overviews in search, which were introduced recently, are being increasingly adopted. AI overviews now reach over 1.5 billion users per month. This reflects a 50% increase in users since October 2024. Due to AI advancements in Q1 2025, the company’s total revenue grew by 12% year-over-year.
The launch of Gemini 2.5 also boosted this performance. It’s now integrated into all 15 platforms with over 500 million users. AI tools like Gemini Pro, Flash, and open-source Gemma models drove developer growth, with AI Studio usage up 200%. Google Cloud also expanded 28% to $12.3 billion in Q1 with new AI infrastructure and tools for enterprises, such as the Agent Development Kit and Vertex AI.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
4. Energy Transfer (NYSE:ET)
Abrams Capital Management’s Stake: $349.37 million
Number of Hedge Fund Holders: 37
Average Upside Potential as of May 8: 36.18%
Energy Transfer (NYSE:ET) owns and operates natural gas transportation pipelines and storage facilities. It has about 12,200 miles of intrastate natural gas transportation pipelines and 20,090 miles of interstate natural gas pipelines. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users.
Energy Transfer’s NGL and refined products segment generated adjusted EBITDA of $1.1 billion in Q$ 2024, which was up from the $1.04 billion year-over-year. This was fueled by higher throughput and increased rates across the company’s Gulf Coast and Mariner East pipeline operations. The company expects to invest ~$1.4 billion in NGL and refined products in 2025.
For instance, the Nederland Flexport expansion is anticipated to begin ethane and propane export service by mid-2025, with ethylene export service expected to commence in Q4 2025. On April 29, Mizuho Securities adjusted its outlook on the stock and reduced the price target from $24 to $22 while maintaining an Outperform rating. This reassessment was attributed to Energy Transfer’s (NYSE:ET) FY2025 adjusted EBITDA guidance coming in below expectations.
Patient Capital Management remains optimistic on the company’s long-term pricing opportunities and stated the following regarding Energy Transfer LP (NYSE:ET) in its Q3 2024 investor letter:
“Energy names disappointed in the quarter following commodity prices lower throughout the period. We took the opportunity to add to our highest conviction ideas. We look to names that have idiosyncratic opportunities and are attractive in a variety of different commodity price environments. Many see risk to energy prices over the next year as supply is expected to outstrip demand by 1.3mb/d even before assuming any incremental OPEC supply comes onto the market. With commodities, consensus is rarely right. We assess companies on through cycle returns and normalized prices. From this perspective, we see a handful of attractive opportunities, including Energy Transfer LP (NYSE:ET), Seadrill (SDRL) and Kosmos (KOS).
Our ownership of Energy Transfer began in 2019 with the belief that the limited supply of new pipelines would provide attractive pricing opportunities over the long-term. At the same time, the company was paying us an attractive dividend (10% yield over the period). So far this investment thesis has largely played out, but we continue to see an attractive long-term setup for the name given our belief that natural gas will be a key ingredient to bridge us to a net carbon neutral world.”
3. Cantaloupe Inc. (NASDAQ:CTLP)
Abrams Capital Management’s Stake: $68.28 million
Number of Hedge Fund Holders: 19
Average Upside Potential as of May 8: 45.99%
Cantaloupe Inc. (NASDAQ:CTLP) is a digital payments and software services company that provides technology solutions for the self-service commerce market. It offers integrated solutions for payment processing, logistics, and back-office management. It also offers professional network infrastructure, card processing, and customer/consumer services.
Cantaloupe’s subscription revenue reached $20.7 million in Q2 2025, which was up 14% year-over-year. This was fueled by the strength in micro markets, which is highlighted as the company’s fastest-growing segment. This expansion is also driven by the adoption of the company’s SEED software among both existing and new customers. This software is Cantaloupe’s platform that provides management tools for self-service commerce operations.
As the calendar year 2024 concluded, Cantaloupe reported having ~32,000 active customers and 1.3 million active devices within its ecosystem. This represented a year-over-year increase of 10% and 4%, respectively. The average revenue per unit for Q2 was $202, which was also up 12%. New customer wins in the vending sector, like EBS, further support the subscription segment’s growth.
Laughing Water Capital stated the following regarding Cantaloupe Inc. (NASDAQ:CTLP) in its Q4 2024 investor letter:
“Cantaloupe, Inc. (NASDAQ:CTLP) – Cantaloupe can most simply be thought of as our vending machine software and payments company, although the industry is evolving to more fully encompass “unattended retail,” including micro markets and smart stores. After many disappointing years, under new leadership the Company has reached an inflection point and is growing at a high teens level into a cash machine focused on stable end markets, while also growing internationally and into adjacent markets. With time I expect the market will appreciate that cash flow generated from software and payments with very little churn is valuable, and re-rate shares higher. It should be noted that while CTLP is in our top 5, it is a medium sized position.”
2. U-Haul Holding Co. (NYSE:UHAL.B)
Abrams Capital Management’s Stake: $208.26 million
Number of Hedge Fund Holders: 30
Average Upside Potential as of May 8: 80%
U-Haul Holding Co. (NYSE:UHAL.B) operates as a DIY moving and storage operator for household and commercial goods in the US and Canada. The company’s Moving and Storage segment rents trucks, trailers, portable moving & storage units, specialty rental items, and self-storage spaces to household movers. It also sells moving supplies, towing accessories, and propane.
U-Haul’s Equipment Rental segment generated a $39 million increase in revenue in FQ3 2025, which represented a growth of ~4.5% year-over-year. This improvement surpassed the 1.5% and 1.7% increases seen in FQ1 and FQ2 of the same fiscal year. The growth in equipment rental revenue was driven by continued strength in average revenue per transaction, an increase in In-Town transactions, and additional last-mile revenue towards the end of the quarter.
U-Haul Holding Co. (NYSE:UHAL.B) also made capital expenditures for new rental equipment, which totaled $1.587 billion for the first 9 months of the fiscal year. This was a $237 million increase year-over-year. While proceeds from the sale of retired equipment decreased by $73 million to $521 million due to selling fewer units and lower average sales prices, the company is managing its fleet by adding and deleting trucks to correct imbalances caused by previous supply chain disruptions.
1. Nuvation Bio Inc. (NYSE:NUVB)
Abrams Capital Management’s Stake: $10.14 million
Number of Hedge Fund Holders: 34
Average Upside Potential as of May 8: 194.12%
Nuvation Bio Inc. (NYSE:NUVB) is a clinical-stage biopharmaceutical company that focuses on unmet needs in oncology by developing differentiated and novel therapeutic candidates. Its lead product candidate is taletrectinib, which is a next-generation ROS1 inhibitor for advanced ROS1+ non-small cell lung cancer (NSCLC).
The FDA granted Priority Review to taletrectinib’s NDA with a PDUFA goal date of 23 June 2025, which indicates a potential US launch in mid-2025. Taletrectinib is already approved in China and is being commercialized by Innovent Biologics. A Marketing Authorization Application has been submitted in Japan by Nippon Kayaku as well. Nuvation also launched a US Expanded Access Program in February 2025 for eligible patients.
The upcoming FDA decision on taletrectinib will unlock funding and establish taletrectinib as Nuvation’s first commercial product in the US. On March 12, analyst Soumit Roy of JonesTrading initiated coverage of the stock with a Buy rating and a price target of $10. Roy mentioned that Nuvation Bio Inc. (NYSE:NUVB) is poised to transition to a commercial-stage company by mid-2025. As of December 31, 2024, the company held $502.7 million in cash and marketable securities.
While we acknowledge the growth potential of Nuvation Bio Inc. (NYSE:NUVB), our conviction lies in the belief that AI stocks hold great promise for delivering high 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 NUVB but that 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
