Billionaire David Tepper’s 10 Small and Midcap Stock Picks with Huge Upside Potential

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6. Lyft, Inc. (NASDAQ:LYFT)

Appaloosa Management LP’s Stake: $73 Million    

Lyft, Inc. (NASDAQ:LYFT) has featured in the 13F portfolio of Appaloosa Management LP since the first quarter of 2024. Back then, this position comprised under 500,000 shares. In the following quarter, the fund increased this to nearly 8 million shares. A further addition was made in the third quarter of 2024 and share ownership jumped to nearly 16 million. Thereafter, the hedge fund has steadily trimmed this holding in every quarter. Filings for the fourth quarter of 2025 show that the fund owned 3.8 million shares in the company, down 32% compared to filings for the third quarter of 2025.

Lyft, Inc. (NASDAQ:LYFT) is transitioning from a growth at all costs model to one focused on Adjusted EBITDA profitability. Hedge funds are bullish on this transition. Under new leadership, Lyft has executed aggressive cost-reduction strategies, including layoffs and a reduction in real estate footprints, which has significantly improved operational leverage. Funds are betting on the company’s guidance for expanding margins through 2026, driven by better insurance cost management and more efficient driver incentives. After years of losing ground to Uber, Lyft has shown signs of stabilizing its North American market share. Buying number two players makes sense because the price wars between Uber and Lyft have cooled. Both companies are now focused on healthy take rates rather than burning cash to undercut each other. Recent data showed an 18% year-over-year increase in active riders, signaling that the platform remains a vital part of the transportation ecosystem despite heavy competition.

While we acknowledge the potential of LYFT 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 LYFT and that has 100x upside potential, check out our report about the cheapest AI stock.

Click to continue reading and see Billionaire David Tepper’s 5 Small and Midcap Stock Picks with Huge Upside Potential.

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