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Billionaire Tom Steyer’s 10 Stock Picks with Huge Upside Potential

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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 MOREBillionaire 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.

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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