We recently published an article titled Billionaire David Einhorn’s 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Kyndryl Holdings, Inc. (NYSE:KD) stands against David Einhorn’s other stock picks with huge upside potential.
David Einhorn is a widely renowned hedge fund manager who co-founded Greenlight Capital in 1996. The billionaire graduated from Cornell University and gained experience in the hedge fund industry under the tutelage of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Einhorn rose to prominence in 2002, when he successfully questioned the accounting practices of Allied Capital, a private equity firm, and disclosed having a short position at the Sohn Investment Conference. The stock plummeted, sparking a heated exchange of claims between Allied and Einhorn. A five-year-long inquiry by the United States Securities and Exchange Commission (SEC) confirmed Einhorn’s claim, revealing that Allied did breach accounting rules related to securities laws.
Greenlight Capital focuses on value-oriented initiatives. The investment management firm’s primary concentration lies in long and short positions in listed equity securities. This strategy allows Einhorn to navigate both rising and falling markets, giving him flexibility during periods of uncertainty.
Greenlight Capital gained 8.2% in the first three months of 2025, boosted by a gold bet that it believes will pay out further as Trump administration policies continue to shake the economy. In a letter to clients, the firm stated that the precious metal was “by far the biggest winner” in their portfolio, increasing 19%. Gold is frequently used as an inflation hedge, and Greenlight believes the White House’s policies would only worsen inflation. “All current Administration policy roads lead to higher longer-term inflation.” the letter added. Greenlight reasoned that slower growth would push the US Federal Reserve to drop interest rates more than markets anticipate. As a countermeasure, the fund acquired a stake in SOFR futures (secured overnight financing rate), while also including tail protection in case the dollar falls significantly compared to the euro and yen.
Another aspect of the Greenlight letter was the assertion that the US equities market is in the early stages of a bear market. To that end, the firm was able to determine precisely when to opt out of its equity holdings. According to the firm’s letter:
“Bear markets do not go straight down. They are punctuated with ‘rip-your-face-off’ rallies based on big headlines, extreme investor sentiment, and experience that buying the dip usually pays off.”
Our Methodology
For this article, we examined Greenlight Capital’s Q4 2024 13F filings to list down billionaire David Einhorn’s stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A group of engineers in a data center, ensuring IT resiliency.
Kyndryl Holdings, Inc. (NYSE:KD)
Greenlight Capital’s Q4 Stake: $130.1 million
Analyst Upside as of April 30: 34.80%
Number of Hedge Fund Holders: 41
Kyndryl Holdings, Inc. (NYSE:KD) is a prominent provider of IT infrastructure services, focusing on the design, development, administration, and modernization of complex enterprise IT systems. Previously a part of IBM (NYSE:IBM), the company was spun off in 2021.
On March 28, Oppenheimer analysts maintained Kyndryl Holdings, Inc. (NYSE:KD)’s Outperform rating with a price target of $43. The update came after a report was issued, suggesting financial misconduct within the company. In response to the charges, Kyndryl’s management team issued a statement calling the report’s assertions false and intentionally misleading. Oppenheimer’s study supported the management’s position, finding no strong evidence, or “smoking gun,” to back up the report’s accusations.
Kyndryl Holdings, Inc. (NYSE:KD) has also signed a strategic partnership with Google Cloud to become a specialized partner for AI and Gemini models, with the goal of modernizing mainframe applications. Furthermore, the company launched a $300 million share repurchase program, reflecting its belief in its future growth prospects.
Rewey Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Kyndryl Holdings, Inc. (NYSE:KD), which we highlighted in our 3Q24 letter, was our top performer in 4Q24, up 50.2%. KD held a well-received analyst day November 21st, where they reaffirmed 2025 financial guidance and set aggressive goals for 2028 margin improvement and Free Cash Flow growth. Investors also cheered the announcement of a $300 million share buyback. We see strong long-term upside in the shares and think KD could be an attractive acquisition target for a consulting or technology services company.”
Overall KD ranks 9th on our list of David Einhorn’s stock picks with huge upside potential. While we acknowledge the potential for KD 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than KD but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
