Billionaire David Tepper’s 5 Small and Midcap Stock Picks with Huge Upside Potential

4. Baidu, Inc. (NASDAQ:BIDU)

Appaloosa Management LP’s Stake: $75 Million      

Baidu, Inc. (NASDAQ:BIDU) first appeared in the 13F portfolio of Appaloosa Management LP back in the fourth quarter of 2013. This stake comprised 205,000 shares. The fund maintained this position for a couple of quarters before selling it off completely. A new position in the firm was then opened in the second quarter of 2023. This comprised nearly 1.3 million shares. The fund increased this to 1.8 million shares by the first quarter of 2024. A trimming period followed, with this stake going down to 625,000 shares by the second quarter of 2025. Filings for the fourth quarter of 2025 show that the fund owned 575,000 shares in the firm, down 50% compared to filings for the previous quarter.

Interest in Baidu, Inc. (NASDAQ:BIDU) stock has jumped following the company’s decision to spin off its in-house semiconductor unit, Kunlunxin. Hedge funds are betting that listing the AI chip unit on the Hong Kong Exchange will highlight its $3 billion+ valuation, which many believe was previously buried within Baidu’s massive corporate umbrella. Funds are also shifting their thesis from Baidu as the Google of China to Baidu as an AI Cloud & LLM leader. With over 200 million monthly active users, Baidu’s Ernie Bot is now a core part of its enterprise toolset. Recent data shows Baidu’s AI cloud infrastructure revenue growing at over 30% year-over-year, significantly outpacing its legacy search advertising business.