David Tepper, the founder of Appaloosa Management and owner of the Carolina Panthers, is widely regarded as one of the greatest hedge fund managers of his generation. Known for his all-in style and a unique ability to find value in distressed or hated sectors, Tepper has consistently outperformed the broader market by fading the crowd. As of the end of the fourth quarter of 2025, his 13F portfolio—valued at $6.9 billion—reflects a sophisticated bet on the next stage of the AI revolution and a controversial, high-stakes commitment to Chinese equities.
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One of the most discussed moves of the 2025–2026 cycle has been Tepper’s massive accumulation of Chinese tech giants like Alibaba and PDD Holdings. Despite geopolitical tensions and looming trade concerns, Tepper remains unfazed. When asked in a televised interview if he was worried about potential US tariffs impacting his China-heavy portfolio, he responded with characteristic bluntness: “My hedge is I don’t care.” While other institutional managers flee Chinese markets due to regulatory uncertainty, Tepper focused on the valuation gap, arguing that the underlying assets were too cheap to ignore, regardless of the political “noise.”
READ MORE: 10 Best Stocks to Buy According to Billionaire Paul Tudor Jones.
Our Methodology
To compile our list of billionaire David Tepper’s small and midcap stock picks with huge upside potential, we reviewed the latest 13F filings of Appaloosa Management LP. Next, we focused on the top stocks in his portfolio that are in the mid and small cap range. 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 David Tepper’s Small and Midcap Stock Picks with Huge Upside Potential
10. The Goodyear Tire & Rubber Company (NASDAQ:GT)
Appaloosa Management LP’s Stake: $22 Million
Tepper has had a long-term bet on The Goodyear Tire & Rubber Company (NASDAQ:GT) stock. The company first appeared in the 13F portfolio of Appaloosa Management LP back in the fourth quarter of 2010. This position comprised over 10 million shares. The holding was increased to 22 million shares by the second quarter of 2013. Thereafter, the position was trimmed and sold off completely by the middle of 2017. A new position was then opened early 2020 and sold off in early 2022. The present stake, purchased in the second quarter of 2025, began with 861,000 shares and was increased to 5 million shares in the third quarter of 2025. Filings for the fourth quarter of 2025 show that the fund has trimmed this holding by 50% and owns 2.5 million shares in the company.
The primary driver of hedge fund interest in The Goodyear Tire & Rubber Company (NASDAQ:GT) stock has been the visible success of the strategic review initiated by the firm in late 2023. Management has hit and exceeded restructuring milestones. As of early 2026, Goodyear has completed all three planned major divestitures – Off-the-Road tires, Chemicals, and the Dunlop brand – generating over $2.2 billion in gross proceeds. The company achieved a $1.5 billion annualized run-rate benefit by the end of 2025. Institutional investors are also focused on the fortress balance sheet being built through debt retirement. Proceeds from the $2.2 billion in asset sales are being used to retire high-interest debt. In early 2026, the company retired $500 million in 9.5% notes, which analysts estimate will save roughly $70 million in annual interest, providing an immediate boost to adjusted earnings per share.
9. United Airline Holdings, Inc. (NASDAQ:UAL)
Appaloosa Management LP’s Stake: $52 Million
United Airline Holdings, Inc. (NASDAQ:UAL) is a constant feature in the 13F portfolio of Appaloosa Management LP. The fund first disclosed a stake in the company back in the fourth quarter of 2010. This holding comprised 3.8 million shares. It was increased to 10 million shares by the third quarter of 2012. By the end of 2015, this stake had been trimmed down to just 600,000 shares and was sold off completely in the coming months. Small stakes were purchased and sold off in 2016 and 2018. The present holding, purchased in the second quarter of 2025, comprised 550,000 shares and was reduced to 462,000 shares in the third quarter of 2025. Filings for the fourth quarter of 2025 show that the fund owns 465,000 shares in the firm.
United Airline Holdings, Inc. (NASDAQ:UAL) is undergoing a multi-year transformation that is reaching its full scale in 2026. Hedge funds are bullish about the results of this transformation plan. For example, United has successfully shifted its model toward the high-margin premium leisure and business traveler. In FY 2025, premium revenue grew 11%, significantly outperforming the industry average. United is also taking delivery of over 100 narrowbody aircraft and 20 Boeing 787-9 Dreamliners in 2026. These new planes are 20–25% more fuel-efficient, which hedge funds view as a critical hedge against the current energy spike. Institutional investors are also rewarding United for leveraging technology to leapfrog competitors like Delta. In early 2026, United began the fleet-wide rollout of SpaceX’s Starlink, offering free, high-speed internet.
8. IQVIA Holdings Inc. (NYSE:IQV)
Appaloosa Management LP’s Stake: $63 Million
IQVIA Holdings Inc. (NYSE:IQV) is a relatively recent addition to the 13F portfolio of Appaloosa Management LP. The fund first disclosed a stake in the company in the second quarter of 2025. This position comprised 300,000 shares. In the third quarter of 2025, this position was reduced by 5% to around 285,000 shares. Filings for the fourth quarter of 2025 reveal that the hedge fund has made another minor reduction in the position, around 1.7% compared to filings for the previous quarter, and owns 280,000 shares in the company.
IQVIA Holdings Inc. (NYSE:IQV) has become a topic of interest on Wall Street following the recent unveiling of IQVIA.ai, a unified agentic AI platform powered by NVIDIA. Under this AI initiative, the company has already deployed 150 AI agents designed to automate clinical trial recruitment and commercial analytics. Hedge funds are betting that this partnership will significantly improve ROI for pharma clients, making IQVIA’s services sticky and harder to replace with traditional Contract Research Organizations. A major overhang for the stock in 2024 and 2025 was a spike in trial cancellations. However, fresh data from February 2026 has reversed this narrative. Management reported that cancellations have normalized back to the $2 billion historical average, down from peaks of nearly $3 billion. With a contracted R&D backlog of $32.7 billion, up 5.3% year-over-year, hedge funds view the company as having high revenue visibility through 2027.
7. Ball Corporation (NYSE:BALL)
Appaloosa Management LP’s Stake: $64 Million
Ball Corporation (NYSE: BALL) is a new addition to the 13F portfolio of Appaloosa Management LP. The fund disclosed a stake in the company comprising 1.2 million shares in filings for the fourth quarter of 2025. The company supplies aluminum packaging products for the beverage, personal care, and household products industries in the United States, Brazil, and internationally. It manufactures and sells aluminum beverage containers to fillers of carbonated soft drinks, beer, energy drinks, and other beverages. It also sells extruded aluminum aerosol containers, recloseable aluminum bottles, aluminum cups, and aluminum slugs.
A major catalyst for hedge fund interest in Ball Corporation (NYSE: BALL) stock is the $5.6 billion sale of Ball’s Aerospace business to BAE Systems. The proceeds allow Ball to significantly pay down debt, moving toward a much cleaner balance sheet. The sale has also turned Ball into a pure-play leader in sustainable aluminum packaging. Institutional investors view Ball as a primary beneficiary of global ESG shifts. As beverage giants like Coca-Cola and PepsiCo face pressure to reduce single-use plastics, they are shifting toward aluminum. Following its restructuring, the company authorized a multi-billion dollar buyback program. For hedge funds, this is a signal of management’s confidence that the stock is undervalued. Ball has a long-range history of consistent dividend payments, making it a staple for dividend aristocrat and value-oriented institutional portfolios.
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.
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