In this article, we discuss Lone Pine’s Non-AI Strategy Falters: Non-AI Stocks Weighing Down Stephen Mandel’s 2026 Returns.
Stephen Mandel Jr. is a prominent American hedge fund manager widely recognized as one of the most successful Tiger Cubs, a group of investors who began their careers under the legendary Julian Robertson at Tiger Management. In 1997, Mandel founded Lone Pine Capital, a Greenwich-based firm named after a resilient pine tree at his alma mater, Dartmouth College. Over the decades, Mandel established a reputation as a master of fundamental, bottom-up stock picking, blending growth and value strategies with analytical rigor. The 13F portfolio of his hedge fund was worth over $13.6 billion at the end of the fourth quarter of 2025.
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Mandel has accumulated non-AI stocks in his portfolio that have seen declines in their share prices over the past few months. The primary catalyst for these declines has been the escalation of conflict in Iran and a subsequent naval blockade. This has created an immediate oil supply shock, driving energy prices higher. While the energy sector benefited, it has acted as a massive tax on non-AI industries like manufacturing and transportation, which saw margins compress as fuel and logistical costs spiked. Investors are aggressively rotating capital toward companies with tangible AI monetization, leaving traditional value stocks ignored.
Our Methodology
For this article, we selected stocks by combing through the 13F portfolio of Lone Pine Capital at the end of the fourth quarter of 2025. The non-AI stocks were ranked according to the year-to-date decline in share price 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).
Stephen Mandel of Lone Pine Capital
Lone Pine’s Non-AI Strategy Falters: Non-AI Stocks Weighing Down Stephen Mandel’s 2026 Returns
10. Carvana Co. (NYSE:CVNA)
Lone Pine Capital’s Stake: $751 Million
YTD Decline in Share Price: 4%
Carvana Co. (NYSE:CVNA) is a long-term holding in the 13F portfolio of Lone Pine Capital. The fund first disclosed a stake in the company back in the fourth quarter of 2019. This holding comprised a little over 25 million shares. The fund increased this position by over 400% in the next quarter, growing the share ownership to over 127 million. In the following quarter, this stake was trimmed by over 83% and sold off completely within months. Another position was opened in the fourth quarter of 2020 and sold off by late 2021. The present holding was disclosed in the first quarter of 2025. Filings for the fourth quarter of 2025 show that the fund owned 44 million shares in the firm, roughly the same as in the previous quarter.
Wall Street has started treating Carvana Co. (NYSE:CVNA) as a hyper-growth machine that has successfully escaped its 2022-2023 liquidity crisis. The stock is currently being treated as one of the top retail picks with significant upside potential. The firm ended 2025 with record revenue of $20.3 billion, up 49%, and record adjusted EBITDA of $2.2 billion. With a 9.3% net income margin in 2025, Carvana has proven it can generate massive cash flow, which is a key requirement for institutional accumulation in the current rate environment. Management has a long-term vision of selling 3 million retail units annually, up from 600,000 in 2025. The firm already has the 34 reconditioning centers and logistics fleet needed to scale toward that 3-million-unit goal without needing new capital infusions.
9. LPL Financial Holdings Inc. (NASDAQ:LPLA)
Lone Pine Capital’s Stake: $741 Million
YTD Decline in Share Price: 8%
LPL Financial Holdings Inc. (NASDAQ:LPLA) first appeared in the 13F portfolio of Lone Pine Capital in the first quarter of 2014. Back then, this position comprised more than 8.5 million shares. By late 2014, this holding had been sold off completely. A new position in the stock was opened in the second quarter of 2022, consisting of just under 2.3 million shares. Filings for the fourth quarter of 2025 show that the fund owned a little over 2 million shares in the company, down more than 8% compared to filings for the third quarter of 2025.
While LPL Financial Holdings Inc. (NASDAQ:LPLA) beat earnings estimates in late January, the stock dropped because total quarterly expenses jumped 43% year-over-year to $4.53 billion. The costs associated with integrating massive acquisitions like Atria Wealth Solutions and preparing for the Commonwealth Financial Network conversion have been higher than some analysts have modeled. Investors are favoring firms with leaner cost structures until LPL can prove the promised synergies from these deals. As the Federal Reserve began gradual rate cuts in early 2026, the yield LPL earns on its $61 billion in client cash has started to face pressure. Management noted in their Q1 2026 outlook that ICA (Insured Cash Account) yields are expected to decrease by about 10 basis points.
8. Visa Inc. (NYSE:V)
Lone Pine Capital’s Stake: $5 Million
YTD Decline in Share Price: 11%
Visa Inc. (NYSE:V) has been a staple in the 13F portfolio of Lone Pine Capital. The fund first disclosed a stake in the company back in the third quarter of 2011. This position comprised over 9 million shares. In the following quarter, the fund added to this holding by more than 111%, growing the stake to just under 20 million shares. Thereafter, it trimmed the position in the next quarter before selling it off completely. New positions were then opened in 2012-2013, 2014-2017, 2020, and 2021-2023. Filings for the fourth quarter of 2025 show that the fund had yet again opened a new position in the stock comprising over 15,000 shares.
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Despite the 11% fall in Visa Inc. (NYSE:V) this year, the business itself is arguably as healthy as ever. In Q1 2026, the company delivered 15% revenue growth, $10.9 billion, and 15% EPS growth, $3.17, both beating analyst estimates. It also maintained operating margins at an industry-leading 68%. The stablecoin settlement activity of the firm reached a $4.5 billion annualized run rate in January. The firm operates as a payment technology company in the United States and internationally. It offers credit, debit, and prepaid card products; tap to pay, tokenization, and click to pay services.
7. TransDigm Group Incorporated (NYSE:TDG)
Lone Pine Capital’s Stake: $26 Million
YTD Decline in Share Price: 13%
TransDigm Group Incorporated (NYSE:TDG) is a long-term holding in the 13F portfolio of Lone Pine Capital. The fund first disclosed a stake in the company back in the fourth quarter of 2010. This holding comprised just under 3 million shares. By early 2012, Lone Pine had grown this stake to more than 3.3 million shares. Since then, the stock has featured consistently in the 13F portfolio of the fund, with minor exceptions. The latest position was opened in the fourth quarter of 2025 and comprises over 19,000 shares. The company designs, produces, and supplies aircraft components in the United States and internationally.
Elite investors are piling into TransDigm Group Incorporated (NYSE:TDG) stock because roughly 90% of the net sales of the firm come from proprietary products, most of which are sole-source. This gives the company unmatched pricing power in the aftermarket. As global air traffic grew by 4% year-over-year in early 2026, TDG saw high-margin commercial aftermarket sales jump, contributing to a massive 52.4% EBITDA margin. It collects high-margin revenue that is largely immune to the production delays hitting OEMs like Boeing. The firm has been on an aggressive acquisition streak as well. Earlier this month, TDG completed the $2.2 billion acquisition of Jet Parts Engineering and Victor Sierra Aviation. This follows the late 2025 integration of Simmonds Precision Products from RTX.
6. Spotify Technology S.A. (NYSE:SPOT)
Lone Pine Capital’s Stake: $10 Million
YTD Decline in Share Price: 15%
Spotify Technology S.A. (NYSE:SPOT) is a relatively recent addition to the 13F portfolio of Lone Pine Capital. The fund first disclosed a stake in the company in the first quarter of 2024. This position comprised just under 1.7 million shares. By the fourth quarter of 2024, the fund had trimmed this stake down to under a million shares, before it was sold off completely. A new position in the stock was opened in the fourth quarter of 2025 consisting of more than 17,000 shares. The firm provides audio streaming subscription services worldwide. It offers online and offline streaming access to a catalog of music and podcasts, including video, lossless music, and audiobooks in select markets through subscription offerings primarily sold directly.
Spotify Technology S.A. (NYSE:SPOT) management has branded 2026 as the Year of Raising Ambition, a signal that hedge funds have embraced. Following record performance in 2025, Spotify is now prioritizing operating income over raw user growth. Institutional investors are piling in ahead of the late April earnings call, where the company is expected to report €660 million in operating income and a record 32.8% gross margin. Analysts from Benchmark and Guggenheim have noted that recent price hikes from the company are expected to drive significant growth in Average Revenue Per User (ARPU) throughout 2026 without causing a significant spike in subscriber cancellations.
While we acknowledge the potential of SPOT 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 SPOT and that has 100x upside potential, check out our report about the cheapest AI stock.
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