We just covered the Top 10 Stock Picks of Billionaire Paul Singer. Pepsico (NASDAQ:PEP) ranks #8 (see Top 5 Stock Picks of Billionaire Paul Singer).
Elliott’s Stake: $197,994,750
Pepsico (NASDAQ:PEP) recent quarterly results showed its turnaround plan is working. The company delivered a strong quarter with revenue and EPS beating expectations, supported by organic growth and margin expansion. International markets helped offset prior weakness in North America, where volumes are now beginning to stabilize and recover.
The stock trades at roughly 18x forward earnings, which is relatively reasonable for a defensive consumer name. It has a dividend yield of 3.5% track record of dividend increases for over 50 years.
Pepsico Inc (NASDAQ:PEP) is insulating itself from the global decline in sugary sodas by pivoting toward functional hydration and clean labels. Through brands like Bubly, which offers zero-sweetener sparkling water, and Propel, a zero-sugar electrolyte water, Pepsico Inc (NASDAQ:PEP) captures health-conscious consumers who are abandoning traditional carbonated drinks. Its strategic stake and distribution deal with Celsius secures a dominant position in the market targeted at fitness-oriented demographics.
The company expects organic revenue growth in the range of 2% to 4% for the full year, while core constant currency EPS is forecast to be up 4% and 6%. The midpoints of the organic revenue and EPS guidance were ahead of the consensus expectations.
Fundsmith Equity Fund stated the following regarding PepsiCo, Inc. (NASDAQ:PEP) in its fourth quarter 2025 investor letter:
“Brown-Forman and PepsiCo, Inc.’s (NASDAQ:PEP) snack business seem to us to be directly in the crosshairs of the impact of reduced appetites from weight loss drugs. Whether or not our Novo Nordisk investment finally comes good, we believe that weight loss drugs and their impact are here to stay. In addition, the alcoholic drinks business faces headwinds from the impact of Generation Z’s drinking habits (lack of) and the legalisation of cannabis (Click Here to Read the Letter in Detail).”
While we acknowledge the risk and potential of PEP 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 PEP and that has 10,000% upside potential, check out our report about the cheapest AI stock.
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