In this article, we will list the David Abrams’ Hedge Fund Is Betting On These 5 Stocks. Please visit David Abrams’ Hedge Fund Is Betting On These 8 Stocks if you would like to see the extended list and the methodology behind it.
5. Coupang Inc (NYSE:CPNG)
Abrams Capital Management Equity Stake: $307.09 Million
Number of Hedge Fund Holders: 94
Coupang Inc (NYSE:CPNG) is one of billionaire David Abrams’ best stock picks. Coupang Inc (NYSE:CPNG) is also a Wall Street favorite. The stock carries a consensus Buy rating with an average price target of $25.30, which reflects a nearly 30% upside potential.
Coupang is a South Korean ecommerce company, often called the Amazon of Korea. According to a Grand View Research report, the South Korean e-commerce market is on track to reach $16.3 billion in annual revenue by 2033. The market was valued at $2.5 billion in 2025. Home appliances is the most lucrative product segment, the report stated. This segment is expected to record the fastest growth during the forecast period.
David Abrams of Abrams Capital Management
Coupang is doubling down on the home appliances sweetspot. On April 10, the Korean Times reported that Coupang will begin selling TCL refrigerators on its platform in South Korea for the first time. These will be large-capacity refrigerators with advanced tech features.
Coupang already sells refrigerators from Samsung Electronics and LG Electronics, so introducing TCL refrigerators will expand the options for its customers.
In Q4 2025, Coupang’s net revenue jumped 11% YoY to $8.8 billion, and the adjusted EBITDA came to $267 million. However, the adjusted EBITDA margin was down 226 basis points from the prior year to 3.0%.
In the course of 2025, the Korean ecommerce operator bought back 8.8 million shares of its stock, spending $243 million on the buybacks. It exited 2025 with $6.3 billion in cash and cash equivalents.
Coupang Inc (NYSE:CPNG) is an online retailer like Amazon, but it primarily serves the South Korean market. In addition to offering a platform for consumers to shop a variety of items, Coupang also offers delivery services. Coupang has headquarters in both South Korea and the US.
4. Asbury Automotive Group Inc (NYSE:ABG)
Abrams Capital Management Equity Stake: $501.22 Million
Number of Hedge Fund Holders: 28
Asbury Automotive Group Inc (NYSE:ABG) is one of billionaire David Abrams’ best stock picks. Wall Street has a consensus Hold rating on Asbury Automotive Group Inc (NYSE:ABG) stock, and the $239.20 price target suggests nearly 20% upside potential.
On April 8, Stephens cut its price target on Asbury Automotive Group Inc (NYSE:ABG) to $254 from $277 while reaffirming an Overweight rating on the stock. The firm expects Asbury’s Q1 2026 EBITDA to decline 12.4% YoY and EPS to drop 20.5% decline YoY. It lowered its price target to reflect its reduced Q1 earnings estimates for the automotive retailer.
In reducing the earnings estimates and lowering the price target, Stephens cited weather impact. It pointed out that around 40% of Asbury’s store locations were exposed to adverse weather conditions in Q1.
While Stephens sees pressures for Asbury in the short term, it remains bullish on the company’s long-term outlook. For instance, the firm sees Asbury’s EPS growing to more than $35 in 2028. The company posted adjusted EPS of $27.24 in 2025.
Asbury is in the process of optimizing its store portfolio. As part of this effort, the company announced in February that it had completed the sale of 10 dealership locations in Indiana, Missouri, and South Carolina. This transaction brought it $210 million in net proceeds.
Asbury CEO David Hult said the proceeds are expected to be used toward debt paydown and share repurchases. On debt, the company aims to cut its leverage ratio to below 3.0x. On share purchases, the company added $424 million to the buyback program, bringing the available buyback authorization to $500 million.
Asbury Automotive Group Inc (NYSE:ABG) is an American automotive retailer. It operates more than 160 dealership locations across the US, selling new and used vehicles. It also offers repair services, and provides car purchase financing and insurance solutions. The company is based in Duluth, Georgia.
3. Somnigroup International Inc (NYSE:SGI)
Abrams Capital Management Equity Stake: $518.19 Million
Number of Hedge Fund Holders: 72
Somnigroup International Inc (NYSE:SGI) is one of billionaire David Abrams’ best stock picks. The stock has a consensus Strong Buy rating and its average price target of $103.14 suggests an upside potential of more than 30%.
On April 8, Raymond James added Somnigroup International Inc (NYSE:SGI) to its analyst favorites list. According to Raymond James, the recent pullback in Somnigroup stock presents a compelling risk/reward opportunity.
The equity research firm also noted that Somnigroup stands to benefit from adding synergies from the Mattress Firm integration. Somnigroup acquired the Mattress Firm Group for around $5 billion in a transaction completed in February 2025.
Raymond James sees revenue and cost synergies from the integration surpassing initial expectations. It says this should lead to solid free cash flow generation over the medium-term. The firm also expects Somnigroup to continue gaining market share across all segments.
Previously on March 26, Jefferies upgraded Somnigroup to Buy from Hold, though it did lower the price target to $88 from $90. Jefferies noted that Somnigroup has strengthened its competitive position, saying that the recent pullback in the stock offers an attractive entry point.
However, the firm pointed out that rising input costs could pressure margin. In this light, Jefferies trimmed its 2026 EPS estimates for Somnigroup, though it said price hikes could help the company offset input costs headwinds.
Based in Lexington, Kentucky, Somnigroup International Inc (NYSE:SGI) makes and sells mattresses and sleep products. It’s the largest bedding company in the world with operations in more than 100 countries. Somnigroup sells its products under a variety of brands, including Tempur-Pedic, Sealy, Mattress Firm, and Stearns & Foster.
2. Alphabet Inc (NASDAQ:GOOGL)
Abrams Capital Management Equity Stake: $599.91 Million
Number of Hedge Fund Holders: 288
Alphabet Inc (NASDAQ:GOOGL) is one of billionaire David Abrams’ best stock picks. Alphabet Inc (NASDAQ:GOOGL) is also a Wall Street favorite. The stock carries a consensus Strong Buy rating, and its $377.90 average price target reflects a nearly 20% upside potential.
AI is shaping up to be a huge economic opportunity. According to a UN report, the global AI market will grow from $189 billion in 2023 to $4.8 trillion by 2033. Alphabet’s Google unit is seeking its fair share of AI dollars with a wide net.
Among other moves, Google is investing in AI startups and offering AI-powered services. Moreover, the company has an opportunity in the AI chips business.
In a conversation with Stripe co-founder John Collison shared on April 7, Google CEO Sundar Pichai said AI is opening up more opportunities to invest in startups. OpenAI rival Anthropic is among the AI startups in which Google has invested. Google has been an early investor in SpaceX.
On April 3, Google and EXL announced a strategic partnership focused on AI-driven cloud solutions. EXL is a global provider of analytics and digital solutions to industries like insurance, healthcare, and financial services. In this arrangement, EXL will increase its use of AI-powered Google Cloud solutions to help clients in sectors like financial services, healthcare, retail, and utilities.
Google built a specialty AI chip called the tensor processing unit (TPU). DA Davidson analyst Gil Luria told Bloomberg in December that selling AI chips to third parties could be a $900 billion business for Google.
Alphabet Inc (NASDAQ:GOOGL), headquartered in Mountain View, California, is the parent company of the internet search engine and cloud computing giant Google. Its other portfolio companies include Waymo in autonomous driving and Verily in life sciences.
1. Lithia Motors Inc (NYSE:LAD)
Abrams Capital Management Equity Stake: $827.68 Million
Number of Hedge Fund Holders: 48
Lithia Motors Inc (NYSE:LAD) is one of billionaire David Abrams’ best stock picks. Most analysts also give the stock a thumbs-up. The stock carries a consensus Buy rating and an average price target of $350.11, which reflects more than 30% upside potential.
On March 30, the equity research firm Benchmark reiterated its Buy rating on Lithia Motors Inc (NYSE:LAD) with a price target of $400. However, the firm slashed its Q1 2026 estimates for Lithia Motors.
While the firm remains bullish on the automotive retailer’s overall outlook, it’s taking a more conservative view for the time being, leading to the estimate revisions. In particular, Benchmark is more cautious regarding average selling prices and per-unit gross profit for used vehicles.
The firm lowered its estimate for Lithia Motors’ adjusted EBITDA in Q1 to $379 million from $408 million. It also cut its estimate for adjusted EPS to $7.39 from $8.49. The firm noted that the used vehicle market remains tight, and pointed out that this continues to affect unit gross profit for dealerships. While this is the case in the market, Benchmark noted that the conditions remain within expectations for this time of the year.
In full-year 2025, Lithia Motors’ revenue rose 4% to $37.63 billion and adjusted net profit jumped 8% to $854.7 million. Service and parts account for around 50% to 60% of the company’s profit.
Lithia Motors exited Q4 2025 with $1.5 billion in cash and cash equivalents. In the course of 2025, the company spent $947 million on share repurchases and $2.4 billion on strategic acquisitions. It closed the year with $621.6 million remaining under the current repurchase program.
Lithia Motors Inc (NYSE:LAD) is an American automotive dealership group based in Medford, Oregon. It operates a network of more than 450 locations and serves as a one-stop shop for drivers. In addition to selling new and used vehicles, it sells vehicle parts and offers repair and maintenance services. Moreover, the company offers financing and insurance.
While we acknowledge the potential of LAD 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 LAD and that has 100x upside potential, check out our report about the cheapest AI stock.
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