In this article, we discuss the Billionaire Tom Steyer’s Stock Picks with Huge Upside Potential.
Tom Steyer, the billionaire investor and founder of Farallon Capital, has undergone a profound evolution from a pioneer of absolute-return hedge fund strategies to a leading architect of climate capitalism. After founding Farallon in 1986 and growing it to $36 billion in assets, Steyer famously exited the firm in 2012 to align his capital with his environmental convictions. Steyer’s current philosophy rests on the belief that for clean technology to win, it must be market-competitive without subsidies. He argues that “decarbonization is not just an environmental necessity but a competitive advantage, driving the creation of cleaner, cheaper, and more efficient products and services”.
This cheaper, faster, better mantra, also the title of his 2024 book, is the core of his investment thesis. Most recently, his firm raised $370 million for its Real Estate Fund I to decarbonize commercial properties. Now a 2026 candidate for Governor of California, Steyer frequently links his investment background to policy. During a Santa Barbara town hall earlier this month, he pushed back against skeptics of the green transition. His recent focus has also shifted toward the intersection of AI and energy. His fund, Farallon Capital, had a 13F portfolio worth over $20 billion at the end of the fourth quarter of 2025.
READ MORE: Billionaire Joe Edelman’s 10 Stock Picks with Huge Upside Potential and David Einhorn Stock Portfolio: Top 10 Stock Picks.
Our Methodology
For this article, we selected stocks by combing through the 13F portfolio of Farallon Capital at the end of the fourth quarter of 2025. The top stocks were ranked based on their analyst upside potential and the top 10 from this list were filtered out. 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 Tom Steyer’s Stock Picks with Huge Upside Potential
10. Microsoft Corporation (NASDAQ:MSFT)
Farallon Capital’s Stake: $1 Billion
Analyst Upside Potential: 19%
Microsoft Corporation (NASDAQ:MSFT) is a long-term stock pick of Tom Steyer. His fund first disclosed a stake in the company back in the fourth quarter of 2010. Back then, this position comprised just under 2.3 million shares. By the third quarter of 2011, this stake had grown to over 4.5 million shares. Thereafter, the fund trimmed the holding and sold it off completely by the middle of 2012. A new position in the stock was then opened in the third quarter of 2013. This comprised 3.8 million shares. The company has featured in the 13F portfolio of the fund consistently since then. Filings for the fourth quarter of 2025 show that the fund owned 2.2 million shares in the firm, up 15% compared to filings for the previous quarter.
Microsoft Corporation (NASDAQ:MSFT) recently released earnings for Q3 2026. It disclosed that AI-related revenue is now on a $37 billion annual run-rate, a 123% increase year-over-year. The company reported over 20 million paid Copilot users, signaling that it is successfully converting its massive user base into high-margin, recurring AI subscriptions. Azure and other cloud services grew 40% in the most recent quarter, outperforming expectations. Hedge funds are rewarding Microsoft’s aggressive data center build-out. CEO Satya Nadella confirmed that Microsoft added one gigawatt of capacity this quarter alone and is on track to double its overall footprint in just two years.