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 Peloton Interactive, Inc. (NASDAQ:PTON) 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 people in a fitness class with connected fitness products in a studio or gym.
Peloton Interactive, Inc. (NASDAQ:PTON)
Greenlight Capital’s Q4 Stake: $91.5 million
Analyst Upside as of April 30: 42.57%
Number of Hedge Fund Holders: 49
Peloton Interactive, Inc. (NASDAQ:PTON) is a multinational fitness technology company that provides internet-connected workout equipment, including treadmills and rowers, for streaming live and on-demand fitness classes via a subscription service. The company also offers a digital app allowing paid access to a variety of training classes.
Truist Securities raised Peloton Interactive, Inc. (NASDAQ:PTON) to Buy from Hold on April 28, citing improved fundamentals, a cleaner balance sheet, and a more straightforward path to long-term profitability under new leadership. Three years after downgrading the stock, Truist said Peloton’s efforts to cut operational costs and stabilize cash flow are starting to pay off. Truist emphasized Peloton’s goal of returning to revenue growth in fiscal 2026, estimating a 1.9% year-over-year improvement following a projected 9% decrease in fiscal 2025.
Peloton Interactive, Inc. (NASDAQ:PTON) reported solid financial results in the second quarter of 2025, with adjusted EBITDA reaching $58 million, representing a $140 million year-over-year increase. The company raked in a double-digit Connected Fitness Products gross margin of 12.9%, owing to a favorable premium product mix and strict discount alignment.
Greenlight Capital stated the following regarding Peloton Interactive, Inc. (NASDAQ:PTON) in its Q4 2024 investor letter:
“We had some good successes, as well. Peloton Interactive, Inc. (NASDAQ:PTON) and Tenet Healthcare (THC), discussed below, were also large winners during 2024.
We presented our PTON thesis at the Robin Hood Investors Conference in October and previously sent you copies of the presentation. Yes, David rode for 20 minutes while presenting the thesis.5 PTON was a popular stock during the COVID era as demand for at-home fitness products and services skyrocketed. During this time, the company invested heavily for growth without any regard for profitability or expense management. After multiple missteps and subsequent management changes, the stock fell 98% from its peak price in early 2021. Throughout this time, PTON has maintained a loyal and engaged customer base through its subscription-based business model.
Recently, the company has committed itself to dramatically cutting costs. Should PTON be successful in right-sizing its cost structure, we expect significant EBITDA generation, and when applying a peer multiple to those profits, we believe the stock has significant upside. We established our position at an average price of $4.07 per share. PTON ended the year at $8.70.”
Overall PTON ranks 6th on our list of David Einhorn’s stock picks with huge upside potential. While we acknowledge the potential for PTON 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 PTON 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.