No, you can't get rich simply by copying billionaires' moves, but there's still something irresistible about following their top stock picks.
After all, the billionaires we're about to talk about have larger-than-life reputations when it comes to investing other rich people's money. Meanwhile, their resources for research, as well as their intimate connections to insiders and others, can give them unique insight into their stock picks.
Studying which stocks they're chasing with their capital can be an edifying exercise for retail investors. There's a reason the rich get richer, for one thing. But it's also helpful to see where billionaires sometimes make mistakes – at least in the short term.
No matter how successful they've been in the past, all investors are fallible. Those who've amassed multibillion-dollar personal fortunes have merely made more money being right than they've lost when getting it wrong.
Need proof? As Chairman and CEO Warren Buffett wrote in Berkshire Hathaway's 2022 annual report: "In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. Our satisfactory results have been the product of about a dozen truly good decisions."
Berkshire's "satisfactory results" happen to be a stock that generated compound annual growth of almost 20% since 1965. The S&P 500 delivered compound annual growth of not quite 10% over the same span.
And so, without further ado, here are five notable top stock picks from the billionaire class. In each case, the billionaire below initiated a substantial position or added to an existing one in the first quarter. If you're wondering why mega-cap tech and communication services names have been rallying so hard, well, buying pressure on the part of billionaires is at least part of the equation.
Stake values and portfolio weights are as of October 31, 2024. Data courtesy of S&P Global Market Intelligence, YCharts, WhaleWisdom, Forbes and regulatory filings made with the Securities and Exchange Commission, unless otherwise noted. Stocks are listed by weight in the selected billionaire investor's equity portfolio, from smallest to largest.
- Billionaire investor: Steve Cohen (Point72)
- Stake value: $448 million
- Percent of portfolio: 0.72%
Steve Cohen is probably best known for using his estimated net worth of more than $20 billion to buy the New York Mets. But he's also known for adding to positions when stocks he already likes a lot are on sale.
Perhaps that's why his family office – Point72 Asset Management based in Stanford, Connecticut – upped its stake in Nvidia (NVDA) by 75% when shares were trading sideways in Q3.
Point72, with $172.1 billion in assets under management (AUM), bought another 1.6 million shares in Nvidia over the course of the third quarter, adding to a position the firm initiated in the first quarter of 2023. With 3.7 million shares worth $448 million as of the end of Q3, NVDA stock is Steve Cohen's fourth largest holding.
Nvidia, one of Wall Street's top Dow Jones stocks, was range-bound in Q3, at one point trading at about a 30% discount to its previous high. Presumably, Point72 picked up NVDA when it was trading closer to $100 a share than it is at current levels. At any rate, by late November, NVDA was up about 175% for the year to date.
That's just what NVDA has done for investors lately, however. Anyone who put $1,000 into Nvidia stock 20 years ago would be thrilled with their returns today.
- Billionaire investor: Daniel Sundheim (D1 Capital Partners)
- Stake value: $116.2 million
- Percent of portfolio: 2.24%
Daniel Sundheim's D1 Capital Partners has made quite a name for itself during its six short years of existence. The New York hedge fund began trading with "only" $5 billion in capital. Today, D1 boasts more than $26.1 billion in AUM.
Along the way, Sundheim built an estimated net worth of $2.6 billion, according to Forbes. In a nod to his precocious success, some wags call Sundheim the LeBron James of investing.
Shareholders in Starbucks (SBUX) surely hope Sundheim brings his scoring touch to D1's new position in the troubled coffee seller. The hedge fund initiated a stake of nearly 1.2 million shares in SBUX in Q3. With a value of $116 million, SBUX is now a top 15 holding.
SBUX stock was having a horrid 2024 until mid-August when news that former head of Chipotle Mexican Grill (CMG) Brian Niccol would become the chain's new CEO.
- Billionaire investor: Philippe Laffont (Coatue Management)
- Stake value: $2.1 billion
- Percent of portfolio: 7.8%
Philippe Laffont's estimated net worth of $6.5 billion is due, at least in part, by knowing how to stick with winners. Such skills were certainly on display when Laffont's Coatue Management hedge fund (AUM $58.6 billion) upped its stake in Amazon.com (AMZN) by another 4.6% in the third quarter.
Coatue, which has owned AMZN since the end of 2009, held 11.3 million shares worth $2.1 billion as of October 31, according to regulatory filings. With a portfolio weight of 7.8%, Amazon is the New York hedge fund's second largest position.
If nothing else, Laffont finds himself in good company. Not only was Amazon added to the Dow Jones Industrial Average earlier this year, the tech, comms and retail giant counts itself among the top-ranked stocks in the blue chip index.
Happily for long-term shareholders, Amazon has been generating market-bruising returns for ages. Indeed, anyone who put $1,000 into Amazon stock a couple decades ago has clobbered the S&P 500 by a wide margin.
- Billionaire investor: Stephen Mandel (Lone Pine Capital)
- Stake value: $1.1 billion
- Percent of portfolio: 8.1%
It should come as no surprise that yet another billionaire investor bet big on yet another mega-cap tech stock in the third quarter of 2024. After all, all that buying pressure had to come from somewhere.
Stephen Mandel has held Meta Platforms (META) since the third quarter of 2023, and he added to the position in a big way in Q3 2024. Interestingly, the Magnificent 7 stock fell roughly 16% from its most recent high at one point during the quarter.
Perhaps this is when Mandel's Greenwich, Connecticut-based Lone Pine Capital hedge fund ($17.5 billion AUM) – upped its META stake by a whopping 36%. With 1.9 million shares worth $1.1 million as of October 31, META is Lone Pine's largest holding, accounting for 8.1% of its portfolio value.
Mandel amassed an estimated net worth of $2.5 billion by knowing when to ride a hot hand, so count this as encouraging news for META bulls.
- Billionaire investor: David Tepper (Appaloosa Management)
- Stake value: $714.6 million
- Percent of portfolio: 10.6%
Perhaps China is not so uninvestable after all.
David Tepper accumulated an estimated net worth of $21.3 billion in part by having good timing. Such skills were certainly on display when his Appaloosa Management hedge fund (AUM $16.8 billion) upped its stake in Temu parent PDD Holdings (PDD) by more than 170% in Q3.
Shares in the Chinese social e-commerce platform were highly volatile in Q3. For example, PDD stock lost about 40% of its value between August 19 and August 28.
Appaloosa, which has owned ORCL since the second quarter of 2023, bought another 3.4 million shares, bringing its total holdings up to 5.3 million. The stake, worth almost $715 million as of the end of Q3, is the New York hedge fund's second largest holding after Alibaba (BABA).
