We recently published an article titled Billionaire Nicholas J. Pritzker’s 8 Stocks with Huge Upside Potential. In this article, we are going to take a look at where Ouster, Inc. (NASDAQ:OUST) stands against Nicholas J. Pritzker’s other stock picks with huge upside potential.
Nicholas J. Pritzker is the chairman and co-founder of Tao Capital Partners, a San Francisco-based venture capital firm established in 2013. A prominent American entrepreneur and member of the influential Pritzker family, Nicholas Pritzker is widely recognized for his business acumen and leadership within both the family’s ventures and his own independent endeavors. He previously served as Chairman and CEO of the Hyatt Development Corporation and is associated with the Pritzker family’s substantial business interests, including ownership stakes in Hyatt Hotels and Conwood, a leading chewing tobacco company. His academic journey includes studies at Reed College, Lake Forest College, and the London School of Economics, followed by earning a J.D. from the University of Chicago.
At Tao Capital Partners, Pritzker oversees a firm that strategically focuses on investments in technology, transportation, healthcare, education, sustainable food, alternative energy, agriculture, consumer products, real estate, and hospitality. Although he holds the role of chairman, Nicholas Pritzker is not the portfolio manager of the firm. Instead, that position is held by Matthias Brachtel, who is responsible for managing the firm’s investment portfolio and making critical financial decisions. Under their leadership, Tao Capital has established a reputation for backing innovative and sustainable ventures, emphasizing long-term positive impacts alongside financial returns.
Tao Capital Partners follows a disciplined investment philosophy, targeting sectors poised for growth and transformation. The firm’s investments include companies within the technology and transportation industries, as well as those focused on healthcare, education, sustainable food, and clean energy solutions. This diversified approach reflects the firm’s commitment to not only achieving financial gains but also fostering advancements in critical global sectors.
As of Q4 2024, Tao Capital Partners reported managing $143.28 million in 13F securities across ten core holdings. The firm’s commitment to sustainable and impactful investment aligns with Nicholas Pritzker’s broader vision of leveraging capital to drive positive change. Pritzker’s guidance continues to shape the firm’s strategic direction, while Matthias Brachtel’s portfolio management expertise ensures the optimization of returns within the chosen sectors. Through a combination of innovative vision and practical financial management, Tao Capital Partners continues to build a diverse portfolio aimed at fostering sustainable growth.
Our Methodology
For this article, we searched through Tao Capital’s Q4 2024 13F filings to identify billionaire Nicholas J. Pritzker’s stock picks with the highest upside potential. We compiled the equities with upside potential higher than 2% at the time of writing this article and analyzed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A group of robotic vehicles navigating a terrain autonomously utilizing the company’s 3D vision technology.
Ouster, Inc. (NASDAQ:OUST)
Number of Hedge Fund Holders as of Q4: 15
Tao Capital’s Equity Stake: $13.75 Million
Upside Potential as of May 8: 65.70%
Ouster, Inc. (NASDAQ:OUST) is a cutting-edge American lidar technology company based in San Francisco, California. The company designs and manufactures high-resolution, digital 3D lidar sensors that are utilized across a diverse range of applications, including autonomous vehicles, industrial automation, robotics, drones, mapping, defense, and security systems. Ouster’s innovative approach to lidar technology focuses on delivering cost-effective, high-performance sensors that meet the demands of rapidly evolving markets.
In the fourth quarter of 2024, Ouster, Inc. (NASDAQ:OUST) reported robust financial results, driven by increased demand for its lidar solutions. Revenue for the quarter reached $30 million, representing a year-over-year increase of 23% and a sequential rise of 7%. The company shipped more than 4,800 sensors during this period, reflecting consistent growth and successful market penetration. A key highlight of the quarter was the substantial improvement in gross margin, which stood at 44% on both a GAAP and non-GAAP basis, compared to 22% in Q4 2023 and 38% in the previous quarter. The higher margins underscore the company’s progress in cost optimization and efficiency gains.
Despite these positive developments, Ouster, Inc. (NASDAQ:OUST) posted a net loss of $24 million for the quarter. However, this figure marks a significant improvement compared to the $39 million loss reported in Q4 2023 and the $26 million loss from Q3 2024. The company’s full-year financial performance also demonstrated substantial progress, with revenue climbing 33% year-over-year to $111 million and shipments exceeding 17,300 sensors. The GAAP gross margin for the entire year was 36%, a remarkable jump from 10% in fiscal year 2023, while the non-GAAP gross margin improved from 30% to 41%. Ouster’s net loss for the year decreased substantially from $374 million in 2023 to $97 million in 2024, indicating a stronger financial position.
Looking ahead, Ouster, Inc. (NASDAQ:OUST) anticipates revenue for Q1 2025 to fall within the range of $30 million to $32 million, signaling steady growth momentum. The company ended 2024 with a strong liquidity position, holding $175 million in cash, cash equivalents, restricted cash, and short-term investments.
Overall OUST ranks 1st among billionaire Nicholas J. Pritzker’s stock picks with huge upside potential. While we acknowledge the potential of OUST as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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 OUST but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
