We recently published a list of 10 Best Stocks to Buy According to Billionaire David Einhorn. In this article, we are going to take a look at where Peloton Interactive, Inc. (NASDAQ:PTON) stands against other best stocks to buy according to billionaire David Einhorn.
David Einhorn is a highly regarded hedge fund manager, who co-founded Greenlight Capital in 1996. Einhorn shot to fame after he correctly forecasted the collapse of Lehman Brothers during the financial crisis. He graduated from Cornell University and garnered his skills in the hedge fund industry under the mentorship of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Due to his prowess in long/short equity strategies, David Einhorn is being tagged as one of the most successful hedge fund managers.
Greenlight Capital’s Investment Philosophy
Greenlight Capital specializes in value-oriented strategies. The investment management firm primarily focuses on long and short positions in the listed equity securities and selectively engages in distressed debt investments during favorable economic cycles. Einhorn is a highly-regarded hedge fund manager who uses a long-short investment strategy. Because of this strategy, he can capitalize on both rising and falling markets, providing him flexibility during uncertainties.
The Greenlight Capital funds (the Partnerships) managed to return 7.2% in 2024, net of fees and expenses, as compared to 25.0% for the broader S&P 500 index. However, since the inception of Greenlight Capital, the Partnerships returned 3,117% cumulatively or 12.9% annualized, both net of fees and expenses. Over the same period, the S&P 500 index delivered 1,421% or 10.0% annualized. Notably, Greenlight’s investors earned $5.7 billion, net of fees and expenses, since inception.
Greenlight Capital’s Views on Current Market Dynamics
CNBC, while quoting the comments of Greenlight Capital’s David Einhorn, mentioned that speculative behavior in the current bull market has reached beyond common sense. As per the firm’s Q4 2024 investor letter, the investors continue to experience a ‘Fartcoin’ stage of the market cycle. To give a brief context, Fartcoin is a cryptocurrency that came into existence late last year. Apart from trading and speculation, no other obvious purpose is being served and no need that is not being served elsewhere is being fulfilled. Einhorn went on to add that the investors might be leaving the Fartcoin stage of the market and entering the Trump (and Melania) memecoin stage. While the certainty about the possible outcome remains unpredictable, it is going to be wild, says David Einhorn.
Amidst these trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire David Einhorn.
Our Methodology
To list the 10 Best Stocks to Buy According to Billionaire David Einhorn, we selected the top 10 stocks in Greenlight Capital’s portfolio as per its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Greenlight Capital’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Peloton Interactive, Inc. (NASDAQ:PTON) One of The Best Stocks to Buy According to Billionaire David Einhorn?
A group of people in a fitness class with connected fitness products in a studio or gym.
Peloton Interactive, Inc. (NASDAQ:PTON) operates an integrated fitness platform in North America and internationally. Canaccord Genuity analysts upgraded the company’s stock from “Hold” to “Buy,” establishing a price objective of $10.00. The change in rating was backed by the analysts recognizing Peloton Interactive, Inc. (NASDAQ:PTON)’s position as a leading force in the connected fitness industry, thanks to a healthy membership base as well as a higher-margin recurring revenue stream. The firm’s analysts expect a positive revenue trajectory for the company moving forward, fueled by the revenue initiatives. This growth can be complemented through the expansion of subscription growth, with Peloton Interactive, Inc. (NASDAQ:PTON) planning to introduce adjacent products.
In Q2 2025, the company’s subscription revenue came in at $420.6 million. This revenue was higher than expected due to increased paid connected fitness subscriptions. Canaccord Genuity’s outlook for the company is backed by its strong and influential global brand and dedicated customer base. The analysts opine that Peloton Interactive, Inc. (NASDAQ:PTON) has substantial opportunities for value appreciation. The company expects total revenue for FY 2025 of $2.43 billion – $2.48 billion. This demonstrates Peloton Interactive, Inc. (NASDAQ:PTON)’s expectations for favorable subscription revenue from higher paid connected fitness subscriptions and favorable connected fitness products revenue from higher tread portfolio sales, partly offset by reduced bike portfolio sales.
Overall, PTON ranks 7th on our list of the 10 Best Stocks to Buy According to Billionaire David Einhorn. While we acknowledge the potential of PTON as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than PTON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
