In this article, we will discuss Billionaire David Tepper’s Top 12 Stock Picks Heading into 2026.
Buying beaten-down stocks is proving to be the preferred investment strategy for circumventing premium valuations. Private investment firms including David Tepper’s family office, Appaloosa, are spearheading the race for beaten-down stocks.
Billionaire Tepper has been aggressive, with his family office Appaloosa locking in gains for ‘magnificent seven stocks’ to pursue opportunities in stocks trading at highly discounted valuations. For starters, the investment firm doubled down on tariff-beaten-down consumer stocks in the race to capitalize on a resilient US economy benefiting from interest rate cuts.
Likewise, Tepper’s Appaloosa Management LP has diversified its holdings into 45 positions to spread risk. The diversification drive is one of the factors behind Tepper’s impressive and consistent returns on Wall Street. Additionally, the billionaire investor has built a name for himself on pursuing distressed debt and “deep-value” equity. The strategy entails pursuing companies whose debt or share price has come under pressure amid investor fears.
While US Federal Reserve interest rate cuts are usually welcome, Tepper has warned that overly easy monetary policy could create asset bubbles. That’s in part because investors will flock to riskier corners of the market.
“My view has been that one easing or two easing or even three easings don’t matter because we’re still in a little restrictive territory with a little bit too high inflation, even without the tariff-induced inflation. So they should be a little bit restrictive,” Tepper said. “Beyond that, you’re really risking a lot of things, a weaker dollar, more inflation and those sort of things.”
While valuations remain incredibly high, Tepper has warned of the risk of betting against stocks amid the Fed’s ongoing easing.
“I’m constructive because of the easing right now, but I’m also miserable because of the levels,” he said. “Nothing’s cheap anymore.”
Our Methodology
To identify Billionaire David Tepper’s Top Stock Picks Heading into 2026, we analyzed the firm’s 13F filing for the third quarter of 2025. Based on this disclosure, we focused on positions that also showed notable hedge fund interest, using Q3 2025 data from Insider Monkey’s database. We also tracked each stock’s performance from the end of Q3 (September 30) to December 11, to provide an insight into whether the fund has been right or wrong about betting on the stock, so far. The list is presented in ascending order according to the dollar value of Appaloosa Management’s stake in each stock.
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 David Tepper’s Top Stock Picks Heading into 2026
12. Uber Technologies, Inc. (NYSE:UBER)
Stock Performance (end Q3-December 11): -12.79%
Appaloosa Management Equity Stake: $235.81 Million
Number of Hedge Fund Holders: 143
Uber Technologies Inc. (NYSE:UBER) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 10, analysts at Citizens reiterated a Market Perform rating on Uber Technologies Inc. (NYSE:UBER) even as it remains under pressure owing to Waymo and Tesla Competition risks.
According to Citizens, Waymo’s autonomous vehicle service is not a significant threat to Uber’s ride-hailing service. That’s because in its current shape, it’s not positioned to capture market share due to vehicle supply constraints. Nevertheless, the research firm has warned that Waymo’s development of driving technology that no longer requires high-definition maps could pose significant competitive pressure.
Likewise, Waymo acquiring Lyft could strengthen its competitive edge, therefore posing significant pressure on Uber. In addition, the research firm is wary of Tesla’s autonomous technology, which could create a competitor with scaled manufacturing.
Meanwhile, Uber has moved to strengthen its prospects in the ride-hailing services by launching a robotaxi service in Dallas. The new service will allow people in Dallas to be matched with an Avride autonomous vehicle when requesting UberX at no additional cost.
“We’re excited to launch autonomous rides in Dallas with Avride, as we continue to build towards an increasingly electric and autonomous future,” said Sarfraz Maredia, Global Head of Autonomous at Uber.
Uber Technologies, Inc. (NYSE:UBER) is a global technology company that provides a platform connecting people needing rides or deliveries with drivers and couriers, offering services like ride-hailing (UberX, UberXL), food delivery (Uber Eats), freight logistics, and employee travel through a smartphone app, fundamentally changing urban transportation.
11. PDD Holdings Inc. (NASDAQ:PDD)
Stock Performance (end Q3-December 11): -15.28%
Appaloosa Management Equity Stake: $237.91 Million
Number of Hedge Fund Holders: 73
PDD Holdings Inc. (NASDAQ:PDD) is one of billionaire David Tepper’s top stock picks heading into 2026. PDD Holdings Inc. (NASDAQ:PDD) boasts a consensus Moderate Buy rating on Wall Street, comprising 7 Buys and 4 Holds. The average price target on the stock is $146.39, implying 30.74% upside potential.
The consensus Moderate Buy rating aligns with analysts at Benchmark, who reiterated on November 19 that the stock is a Buy with a $160 price target. The research firm’s positive stance is in response to the company’s solid third-quarter results characterized by moderate revenue growth. The company benefited from domestic ecosystem investments and a healthy increase in Temu’s international business.
PDD Holdings is also benefiting from Temu’s diversified business footprint beyond the US. Europe has emerged as a key driver for the international business segment, prompting the research firm to raise its 2025 and 2026 revenue forecast.
Meanwhile, analysts at BofA lowered their price target of the stock to $140 from $141 on November 19 while reiterating a Neutral rating. The price cut came amid concerns about a slowdown in the company’s online marketing services (OMS) revenue, which grew 8% year over year, down from 13% in the second quarter. OMS growth remains moderate as Pinduoduo surpasses 5 trillion RMB in gross merchandise volume.
PDD Holdings Inc. (NASDAQ:PDD) is a multinational e-commerce group that owns and operates popular online marketplaces, primarily Pinduoduo (in China) and Temu (globally), focusing on bringing value-for-money products and interactive shopping experiences to bring people into the digital economy, connecting consumers with businesses and manufacturers through social and group buying models.
