We came across a bullish thesis on GXO Logistics on DeepValue Capital’s Substack. As of 9ᵗʰ July, GXO Logistics’s share was trading at $50.29. GXO’s trailing and forward P/E were 81.11 and 15.57 respectively according to Yahoo Finance.
GXO Logistics, the world’s largest pure-play contract logistics provider, is transforming the logistics industry through automation. The company manages complex supply chains for global brands across 869 locations, with 208 million square feet of warehouse space and a workforce of ~94,000. In 2024, GXO generated $11.7 billion in revenue, broken down across various sectors such as Omnichannel Retail ($5.4 billion), Technology & Consumer Electronics ($1.5 billion), and Industrial & Manufacturing ($1.3 billion). The company is investing heavily in AI and robotics, partnering with companies like Dexterity, Dexory, and Agility Robotics to deploy cutting-edge technology.
The recent developments in GXO include the Wincanton acquisition receiving CMA approval, allowing integration to move forward, and the appointment of new CEO Patrick Kelleher in August, who has over 30 years of experience in automation and logistics. Management has raised guidance on diluted EPS, adjusted EBITDA, and organic growth. The company’s focus on automation is expected to drive margin expansion and long-term competitive advantage. With over 50% of its sites globally already deploying robotics and AI, GXO is seeing results in faster throughput, higher accuracy, and lower cost per unit.
The investment thesis for GXO centers around its potential for significant upside driven by automation. The company’s infrastructure is critical to modern commerce, and its adoption of automation could lead to substantial growth by 2027. With a compelling valuation and growth prospects, GXO presents a unique investment opportunity. The stock offers an attractive entry point, and the potential for automation to drive big upside makes it an exciting investment. Even if the growth projections are not fully met, the company’s resilient business and growing sectors provide a stable foundation for investors.
Previously, we covered a bullish thesis on GXO Logistics by P14 Capital in May 2025, which highlighted the company’s 10-year contract with the UK’s National Health Service—its largest deal to date—highlighting growing demand for outsourced logistics. The stock has appreciated by 22% since our coverage. This is because the previous thesis has partially played out. DeepValue Capital shares a similar view, emphasizing GXO’s transformation through automation, investments in AI and robotics, and potential for margin expansion.
GXO Logistics is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held GXO at the end of first quarter which was 49 in the previous quarter. While we acknowledge the risk and potential of GXO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GXO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
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