We recently compiled a list of the 10 Best Stocks to Buy According to D1 Capital’s Daniel Sundheim. In this article, we are going to take a look at where XPO, Inc. (NYSE:XPO) stands against Daniel Sundheim’s other stock picks.
Daniel Sundheim is the founder and chief investment officer of D1 Capital Partners, a global investment firm active across both public and private markets. Established in 2018, the hedge fund successfully endured the COVID-19 slump by relying on an aggressive investment strategy based on fundamental research. D1 currently manages a portfolio of $8 billion in public investments and $12 billion in private holdings. The firm has maintained a significant presence in Silicon Valley, investing in major players such as SpaceX, which accounts for about a third of its private portfolio.
Of course, staying on the winning side is nearly impossible for any investor, including billionaires like Daniel Sundheim. Back in 2022, Sundheim endured one of the most challenging years of his career as broader equity markets came under pressure from rising inflation. While the S&P 500 sank 19.4%, D1 Capital underperformed with a 30.5% decline, largely due to its substantial private-market bets on tech startups, whose valuations plummeted sharply. D1 Capital was among several high-profile hedge funds caught in this downturn. However, the firm rebounded in 2023, rising more than 19% after strategically reducing some of its private investments.
According to an investor letter received by Financial Times, D1 Capital’s public portfolio returned 44% in 2024, driven by strategic investments in European stocks. This incredible run of gains continued into 2025, with the fund gaining 7.7% in January. D1’s approach of capitalizing on valuation discounts in European markets relative to US rivals seems to have been largely successful. Speaking on this, Sundheim stated in the letter:
“We believe there is currently an extremely attractive opportunity to buy great businesses that trade on non-U.S. exchanges.”
The billionaire is also a major proponent of artificial intelligence, and believes that public companies represent the best way to capitalize on the AI boom. Speaking in late 2024, he explained that, unlike previous technological breakthroughs, AI would have an impact on almost every sector, prompting companies across industries to invest heavily in its development. Large public corporations, he noted, have the resources and scale required to effectively implement AI initiatives, giving them an advantage over smaller, more agile firms. Sundheim further stressed that companies investing in AI today are doing so with a long-term view, realizing that the substantial infrastructure necessary suggests returns are likely to come over the next decade, not the next quarter.
Our Methodology
For this list, we picked stocks from D1 Capital Partner’s 13F portfolio as of the end of the fourth quarter of 2024. 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 convoy of freight trucks on a highway, reflecting industrial freight transportation.
XPO, Inc. (NYSE:XPO)
D1 Capital Partners’s Stake as of Q4: $266.7 million
Number of Hedge Fund Holders: 45
XPO, Inc. (NYSE:XPO) offers freight transportation services across the globe, operating in a wide range of industries, including retail, e-commerce, manufacturing, food & beverage, and consumer products.
XPO, Inc. (NYSE:XPO) has also announced the authorization of a $750 million stock repurchase program. The scheme succeeds the previous plan from February 2019, which had $503 million remaining.
On April 10, Benchmark analysts lowered their price target on XPO, Inc. (NYSE:XPO) shares to $130 from $160, while maintaining a Buy rating on the stock. According to analyst Chris Kuhn, XPO Inc. has been able to deliver sequential price growth and operational ratio (OR) in a poor freight market. The firm also stated that, while XPO, Inc. (NYSE:XPO) has not reported QTD revenue per hundredweight (rev/cwt) disregarding fuel expenses, the 6.3% growth in rev/cwt during the fourth quarter was positive and surpassed expectations.
Overall XPO ranks 8th on our list of Daniel Sundheim’s other stock picks. While we acknowledge the potential for XPO 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 XPO 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.
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