Billionaire Mario Gabelli’s 10 Small-Cap Stock Picks with Huge Upside Potential

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1. Telephone and Data Systems Inc. (NYSE:TDS)

GAMCO Investors’ Stake: $65.33 million

Number of Hedge Fund Holders: 36

Market Capitalization as of May 8: $3.67 billion

Average Upside Potential as of May 8: 50.10%

Telephone and Data Systems Inc. (NYSE:TDS) is a telecom company that provides communications services to consumers, businesses, and government in the US. It operates through three segments: UScellular Wireless, UScellular Towers, and TDS Telecom. It sells and distributes its products through third-party direct sales, retail stores, sales agents, and an online platform.

Over the past three years, the company’s ongoing fiber program in its TDS Telecom segment has expanded TDS Telecom’s footprint by over 30%. In Q1 2025, TDS Telecom delivered 14,000 new fiber service addresses and anticipates achieving 150,000 fiber addresses for the full year. While fiber net additions of 8,300 in the quarter were lower than in previous periods due to the timing of service address delivery, the company expects these additions will increase as build-out accelerates throughout the year.

TDS Telecom is actively investing in its fiber infrastructure, with more than 80% of its full-year capital expenditures dedicated to fiber in 2025. This investment supports both expansion markets, primarily in Wisconsin and the Pacific Northwest, as well as the new Enhanced A-CAM (E-ACAM) program, which will bring fiber deeper into rural communities. The company has already begun construction in its first E-ACAM market in Wisconsin.

While we acknowledge the growth potential of Telephone and Data Systems Inc. (NYSE:TDS), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TDS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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