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.
10. Microsoft Corporation (NASDAQ:MSFT)
Stock Performance (end Q3-December 11): -6.66%
Appaloosa Management Equity Stake: $239.55 Million
Number of Hedge Fund Holders: 312
Microsoft Corporation (NASDAQ:MSFT) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 11, the company inked a strategic partnership with Cognizant, Infosys, TCS, and Wipro. The leading IT companies are joining forces with the software giant to accelerate the development and adoption of agentic AI.
As part of the agreement, the companies are to deploy 50,000 Microsoft Copilot licenses, setting a new benchmark for enterprise AI adoption. The deployment comes when Microsoft plans to invest $17.5 billion in cloud and artificial intelligence infrastructure and skills in India. Additionally, Microsoft is to deploy Microsoft 365 Copilot as it seeks to transform the way organizations operate, innovate, and scale in the country.
“Cognizant, Infosys, TCS, and Wipro aren’t just embracing AI—they’re setting the global pace. These global enterprises are moving beyond experimentation to full-scale deployment, embedding Microsoft Copilot into the fabric of everyday work. This bold adoption is inspiring a new era of enterprise transformation, powered by trusted digital collaborators. The blueprint is being written here—where speed, scale, and impact converge to redefine what’s possible,” said Puneet Chandok, President, Microsoft India & South Asia.
In addition, Microsoft and Cognizant have expanded their partnership to ensure Microsoft’s generative AI capabilities are available to millions of people and transform enterprise business operations.
Earlier on December 8, Morgan Stanley analyst Keith Weiss reaffirmed a Buy rating on Microsoft with a $650 price target. He cited strong growth drivers, including upcoming Microsoft 365 price hikes in July 2026, new AI and security features, and rising demand for premium subscriptions like Copilot and E5. These moves are expected to lift revenue by $2–$6 billion between FY27 and FY29, showcasing Microsoft’s pricing power and long-term growth potential.
Microsoft Corporation (NASDAQ:MSFT) is a technology giant that develops and sells software, cloud services, devices, and video games. It’s also known for Azure cloud, Xbox, and Surface hardware, leveraging AI to empower individuals and organizations globally across productivity, cloud computing, and personal computing.
9. Vistra Corp. (NYSE:VST)
Stock Performance (end Q3-December 11): -10.88%
Appaloosa Management Equity Stake: $243.92 Million
Number of Hedge Fund Holders: 112
Vistra Corp (NYSE: VST) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 12, S&P Global Ratings upgraded the stock to investment grade. Consequently, it raised its credit rating to BBB- from BBB+, impressed by its stable outlook.
The upgrade is in response to the company inking a power purchase agreement for its Comanche Peak Nuclear Power Plant. Additionally, it has completed the acquisition of natural assets from Lotus infrastructure partners, further strengthening its pipeline.
The acquisitions have expanded the company’s diverse generation portfolio while adding efficient assets across key competitive markets, including PJM, New England, New York, and California. Increased capacity at PJM is credit-positive, driven by robust market fundamentals that support strong auction results.
According to the rating firm, the company’s risk profile has improved significantly amid booming business, resulting in improved long-term cash flow visibility. S&P Global Ratings expects Vistra Corp to deliver an adjusted debt to EBITDA ratio in the mid-3.0x range by year-end, which should decrease to 2.6x-2.8x BY 2026 and 2027.
On the other hand, analysts at KeyBanc initiated coverage of the stock with an Overweight rating and a $217 price target. According to the research firm, the company’s scale, diversified generation mix, and strong cash flow affirm its long-term prospects.
Vistra Corp. (NYSE:VST) is a large, integrated U.S. power company that generates, sells, and delivers electricity, owns diverse power plants (gas, nuclear, coal, solar, and batteries), and serves millions of retail customers.
8. Meta Platforms, Inc. (NASDAQ:META)
Stock Performance (end Q3-December 11): -11.12%
Appaloosa Management Equity Stake: $271.72 Million
Number of Hedge Fund Holders: 273
Meta Platforms Inc. (NASDAQ:META) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 11, Morgan Stanley cut its price target of Meta Platforms Inc. (NASDAQ:META) to $750 from $820 while reiterating an Overweight rating.
The price cut comes amid concerns that sentiments around the social media networking stock have turned negative. That’s in part because of growing fears about revenue durability, operating expense uncertainty, and issues around the company’s Llama AI model. The shift in sentiment comes amid growing confidence in Alphabet’s prospects, buoyed by the tech giant’s AI initiatives.
Despite the cut, the price target represents a significant upside potential. Additionally, Morgan Stanley insists Meta is one of the few companies that can leverage its data, distribution capabilities, and AI investments to generate long-term value.
Additionally, the stock came under pressure after the company detailed plans to develop a closed, monetizable AI model incorporating technology from Chinese tech giants, including Alibaba. Avocado is the proposed AI model slated for release next spring. Meta will reportedly retain control over the closed AI model, marking a significant departure from the open-source model it has championed over the years.
The Pivot towards a closed model is part of an effort to address the disappointments associated with Meta’s Llama 4 Open Source model.
Meta Platforms, Inc. (NASDAQ:META) is a tech giant focused on connecting people through social media (Facebook, Instagram, WhatsApp), advertising, and building the future of the internet with virtual and augmented reality (Metaverse, Quest headsets, AI), aiming to blend digital and physical worlds for work, play, and connection.
7. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Stock Performance (end Q3-December 11): 9.15%
Appaloosa Management Equity Stake: $296.05 Million
Number of Hedge Fund Holders: 194
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 10, analysts at Bernstein SocGen Group reiterated an Outperform rating and a $330 price target on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). The positive stance is in response to the company tracking ahead of its fourth quarter guidance and consensus estimates.
The company’s revenues in November were down 6.5% month over month to NT$344 billion but represented a 24.5% year-over-year increase. The year-over-year increase aligns with the 37% revenue growth over the past 12 months. The company’s revenue for October and November totaled NT$711 billion, accounting for 71% of the fourth quarter guidance.
Consequently, Taiwan Semiconductor is on course to deliver fourth-quarter revenue at the upper end of its historical range. Should the momentum from the past two months persist in December, Bernstein expects the company’s Q4 revenue to exceed the midpoint of guidance and consensus estimates by 3-4%.
The expected revenue growth is being driven by the robust production of artificial intelligence chips for Nvidia and Broadcom. The company is also capitalizing on the strong demand for Apple’s mobile phone chips.
Analysts at Bank of America have already raised their price target for the stock to $360, citing a strong view of TSMC’s AI growth trajectory.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest dedicated semiconductor foundry, meaning it manufactures chips designed by other companies, rather than designing its own brands.
6. NRG Energy, Inc. (NYSE:NRG)
Stock Performance (end Q3-December 11): 5.37%
Appaloosa Management Equity Stake: $302.85 Million
Number of Hedge Fund Holders: 73
NRG Energy Inc. (NYSE:NRG) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 9, UBS initiated coverage of NRG Energy Inc. (NYSE:NRG) with a Buy rating and a $211 price target. The research firm remains confident about the company’s prospects owing to its compelling free cash flow, strategic positioning, and differentiated growth drivers.
The company already offers a 9% pro forma free cash flow yield, which is one of the most attractive compared to 7% average yield in the Independent power producer sector. In November, the company secured approval from the Federal Energy Regulatory Commission (FERC) and the New York State Public Service Commission (NYSPSC) for the acquisition of a portfolio of natural gas generation facilities from LS Power. The acquisition extends the company’s ability to deliver innovative, customized energy solutions.
Likewise, the research firm noted that the company’s upside potential is not solely tied to data center operations but also includes exposure to retail offerings, new-generation development opportunities, and smart Home initiatives. Consequently, UBS sees a 27% upside potential on NRG shares given the company’s scale, retail integration, and multiple growth drivers.
Meanwhile, Raymond James has reiterated that NRG Energy is one of the stocks to watch in the current market. The research firm has a $223 price target on the stock and views it as a buy following the recent 13% to 14% sell-off.
NRG Energy, Inc. (NYSE:NRG) is a major integrated U.S. energy company that generates, sells, and delivers electricity and natural gas to homes and businesses, offering diverse power sources (coal, gas, renewables) and expanding into smart home/energy solutions through acquisitions such as Vivint.
5. Alphabet Inc. (NASDAQ:GOOGL)
Stock Performance (end Q3-December 11): 28.52%
Appaloosa Management Equity Stake: $337.93 Million
Number of Hedge Fund Holders: 243
Alphabet (NASDAQ:GOOGL) 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 Alphabet (NASDAQ:GOOGL) and set a $340 price target.
The research firm has echoed the company’s push to license its self-driving car technology to automakers under the Waymo brand. According to the research firm, the decision could allow vehicle owners to switch to ride-sharing networks when not using their cars.
Citizens expect partnerships with original equipment manufacturers to enable Waymo to scale vehicle production. The technology licensing drive is also likely to result in a new revenue stream that should bolster the current one, which stands at $385.5 billion over the past 12 months.
Meanwhile, analysts at Truist Securities reiterated a Buy rating on the stock on December 5 and raised the price target to $350 from $320. The research firm expects the company to capitalize on high US ecommerce spending and digital ad spending in the holiday season, driven by resilient customers. Consequently, it expects the company to generate higher advertising revenues driven by strong momentum in e-commerce.
The remarks come from Alphabet’s Google, announcing on December 10 the appointment of Amin Vahdat as the chief technologist for AI infrastructure. The appointment comes as the company ramps up spending on data centers and hardware to support AI workloads.
Alphabet Inc. (NASDAQ:GOOGL) is a tech conglomerate and the parent company of Google, overseeing diverse businesses from search, ads, and YouTube (under Google) to “Other Bets” like self-driving cars (Waymo), health tech (Verily), and drone delivery (Wing).
4. NVIDIA Corporation (NASDAQ:NVDA)
Stock Performance (end Q3-December 11): -3.03%
Appaloosa Management Equity Stake: $354.50 Million
Number of Hedge Fund Holders: 234
NVIDIA Corporation (NASDAQ:NVDA) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 9, UBS analyst Timothy Arcuri reiterated a Buy rating and a $235 price target on NVIDIA Corporation (NASDAQ:NVDA). The positive stance comes as Jefferies continues to doubt the demand for the company’s H200 chips in China.
Even with the US clearing Nvidia to sell the chips to Chinese clients, Jefferies has questioned the demand as the country prioritizes domestic alternatives. That’s because the H200 processors are the second-best AI chips with reduced capabilities.
The research firm warns that the company could feel the brunt of the Chinese government’s push for independence in the advanced AI processor. That’s in part because Chinese AI model performance is advancing, with Moonshot’s Kimi K2 Thinking model rising to fourth globally.
Meanwhile, Nvidia has partnered with Mistral AI to accelerate the development of a new family of Open Models. Mistral 3 family is the latest model, optimized for Nvidia platforms and designed for distributed intelligence from the cloud to the edge. The models deliver industry-leading accuracy and efficiency for enterprise AI and are available for use in the cloud, data centers, or at the edge. Additionally, the new models are tailored to enable researchers and developers to experiment with and accelerate AI innovation.
NVIDIA Corporation (NASDAQ:NVDA) designs and sells specialized processors, initially for gaming but now also crucial for AI, data centers, professional visualization, and the automotive industry. It developed the graphics processing unit (GPU) and the CUDA parallel computing platform, which allows its GPUs to perform tasks beyond graphics.
3. Whirlpool Corporation (NYSE:WHR)
Stock Performance (end Q3-December 11): -0.06%
Appaloosa Management Equity Stake: $432.30 Million
Number of Hedge Fund Holders: 31
Whirlpool Corporation (NYSE:WHR) is one of billionaire David Tepper’s top stock picks heading into 2026. Whirlpool Corporation (NYSE:WHR) carries a Hold consensus from 6 analysts (1 Buy, 3 Hold, 2 Sell). Their 12‑month price targets average $68.25, implying a ‑13.45% drop from the current price of $78.86.
The company’s plan to divest its India unit for $1 billion has hit a snag. On December 6, reports emerged indicating talks with private equity firm Advent International had collapsed due to disagreements on valuation.
Advent had indicated its intent to acquire a 31% stake in Whirlpool India from its parent, a transaction that could have opened the door to acquiring a majority stake. Whirlpool, which owns about 51% stake, had indicated earlier in the year plans to reduce its stake in the Indian unit to about 20%. The divestment is part of the company’s push to raise funds as it looks to repay its debts.
The negotiations collapsed as Advent was pushing for a much lower price, given that Whirlpool is facing short-term headwinds in India. Stricter regulations on product standards and energy efficiency norms have also rattled the home appliance maker prospects in the country.
Meanwhile, Whirlpool has confirmed that its Brazilian unit will stop production at its manufacturing facility in Argentina. The discontinuation aligns with its long-term strategic guidelines of operational efficiency. Nevertheless, importation, commercialization, and distribution activities will continue in Argentina.
Whirlpool Corporation (NYSE:WHR) is a leading global home appliance company that designs, manufactures, and sells central kitchen and laundry appliances, focusing on improving life at home through brands like Whirlpool, KitchenAid, Maytag, JennAir, and Amana, offering everything from basic to smart, connected devices for cooking, cleaning, and preserving food.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Stock Performance (end Q3-December 11): 4.88%
Appaloosa Management Equity Stake: $548.93 Million
Number of Hedge Fund Holders: 332
Amazon.com Inc. (NASDAQ:AMZN) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 10, TD Cowen’s John Blackledge kept a Buy rating on Amazon.com Inc. (NASDAQ:AMZN) with a $300 target. Two days earlier, on December 8, Roth MKM’s Rohit Kulkarni also reaffirmed a Buy, setting a $270 target.
On December 9, Amazon.com Inc. announced plans to invest $35 billion in India across its business through 2030. The $35 billion investment will build on the $40 billion that the company has already invested.
The new $35 billion investment will go towards expanding the company’s businesses, focusing on artificial intelligence-driven digitization, export growth, and job creation. In India, Amazon has already digitized over 12 million small businesses and enabled $20 billion in cumulative ecommerce exports.
“Looking ahead, we’re excited to continue being a catalyst for India’s growth, as we democratize access to AI for millions of Indians and quadruple cumulative ecommerce exports enabled to $80 billion by 2030. In 2030, Amazon businesses will support 3.8 million direct, indirect, induced, and seasonal jobs,” said Amit Agarwal, Senior VP Emerging Markets, Amazon. “
Growing investment in India comes as the company expands same-day grocery delivery in the US to more than 2,300 cities and towns. The company plans to expand into more cities as perishable goods represent 9 of the 10 bestselling g items in areas where same-day grocery is available. While the company trails Walmart in total online grocery sales, it plans to close the gap through ongoing expansion.
Amazon.com, Inc. (NASDAQ:AMZN) is a global technology company that operates a vast range of businesses, primarily in e-commerce, cloud computing, digital streaming, and artificial intelligence. It serves as a massive online marketplace where it sells a wide variety of products. It also offers cloud computing solutions in addition to offering digital entertainment and device sales.
1. Alibaba Group Holding Limited (NYSE:BABA)
Stock Performance (end Q3-December 11): -12.21%
Appaloosa Management Equity Stake: $1.15 Billion
Number of Hedge Fund Holders: 130
Alibaba Group Holding Limited (NYSE:BABA) is one of billionaire David Tepper’s top stock picks heading into 2026. On December 2, analysts at Susquehanna reiterated a Positive rating and a $190 price target on the stock. The bullish stance comes on the company announcing better-than-expected performance in its core China e-commerce business.
While revenue exceeded expectations, driven by strong e-commerce sales, the company also continues to enjoy strong demand for its Artificial intelligence and cloud offerings. The research firm’s favorable rating is based on the company’s strong positioning in the e-commerce market, backed by substantial growth opportunities.
The company’s revenue in the first half of the year grew 3% to $69.6 billion as it benefited from adding artificial intelligence tools to its e-commerce suite. Demand for AI also continues to accelerate the company’s Cloud Intelligence Group business.
“In our consumption business, quick commerce continued to scale with significant improvement in unit economics and drove rapid growth in monthly active consumers on the Taobao app,” Eddie Wu, CEO of Alibaba Group, said.
Nevertheless, there are growing concerns that increased investments in AI Cloud and other areas, such as quick commerce, continue to put pressure on margins. Amid margin pressure, Susquehanna remains confident in the company’s long-term prospects, given its strong positioning in China’s e-commerce market.
Alibaba Group Holding Limited (NYSE:BABA) is a multinational tech giant focused on e-commerce, retail, cloud computing, and digital services. It aims to make it easy to do business anywhere by connecting buyers and sellers globally through platforms like Alibaba.com (B2B wholesale).
While we acknowledge the potential of BABA 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 BABA and that has 100x upside potential, check out our report about this cheapest AI stock.
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