In our recent analysis, we explored Billionaire Paul Singer’s Top 10 Stock Picks with Significant Upside Potential, with a particular focus on Western Digital Corporation (NASDAQ: WDC). How does WDC compare to Singer’s other selections that promise high rewards? Let’s dive in.
Paul Singer, the visionary behind Elliott Investment Management, has been a prominent figure in investing since he founded the firm in 1977 in New York. As one of the oldest continuously managed hedge funds and a leader in activist investing, Elliott Management has a robust history of success. Singer’s flagship fund, Elliott International Limited, has outperformed the S&P 500 by approximately 5 percentage points each year since its inception in 1994. This remarkable track record complements Singer’s educational background, with a BA in Psychology from the University of Rochester and a JD from Harvard Law School. Before establishing Elliott Management, he spent four years in prestigious investment banks and corporate law, laying the groundwork for his future success.
Known for his bold investment strategies that unlock shareholder value, Singer often capitalizes on distressed assets, including companies and even nations. His approach often hinges on meticulous analyses of hedging strategies. In a recent podcast appearance on In Good Company with Nicolai Tangen, he emphasized that while bad luck can affect investments, many missteps stem from misjudging risks or employing ineffective hedges. He stated:
“Sometimes it’s bad luck, but more frequently it’s (that) we missed something. We missed. Or the hedges weren’t, they weren’t the right hedges.”
This insight underlines the complexities of modern investing, where sophisticated hedging techniques are vital yet sometimes fall short of expectations.
To compile Singer’s list of top stock picks, we meticulously analyzed Elliott Management’s Q4 2024 13F filings, focusing on stocks showing significant upside potential as reported by CNN, while also integrating information about the management’s stakes and the overall hedge fund sentiment towards these stocks. The data was compiled as of May 8.
Why does this matter? Our research finds that mimicking selections from top hedge funds can lead to outperformance in the markets. Our proprietary quarterly newsletter, which pinpoints 14 small and large-cap stocks each quarter, has achieved an impressive return of 373.4% since May 2014, outpacing its benchmark by 218 percentage points—proof of the strategy’s effectiveness.
As for Western Digital Corporation, it specializes in storage solutions, manufacturing hard disk drives (HDDs) and solid-state drives (SSDs) for a variety of applications, including personal computers and gaming consoles. Remarkably, in FQ3 2025, its Cloud segment generated $2 billion in revenue, accounting for 87% of total revenue, marking a 38% year-over-year increase. This growth is largely attributed to the rising demand for extensive storage solutions propelled by an explosion of data and AI-generated content.
Despite facing a modest 6% decline in near-line bit shipments due to customer deployment schedules, Western Digital showcased a 5% sequential increase in average price per unit in the cloud sector. Additionally, they have secured long-term agreements with two major cloud customers extending into H1 2026. That’s why Benchmark recently upgraded the stock from Hold to Buy, assigning a price target of $55 due to promising developments in flash memory and nearline drive segments.
In their Q2 2024 investor letter, Parnassus Mid Cap Fund shared:
“We re-initiated a position in Western Digital Corporation (NASDAQ: WDC) as we believe earnings expectations are far too low. The supply-demand imbalance in semiconductors is poised to create substantial growth opportunities.”
In our analysis, WDC ranks 7th among Paul Singer’s stock picks with enormous upside potential. However, we believe that certain AI stocks are even more promising, with potential for high returns in a shorter timeframe. If you seek an AI stock trading at less than five times its earnings but offer even more promise than WDC, check out our latest report on the cheapest AI stock available.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article was originally published by Insider Monkey.