David Einhorn Stock Portfolio: Top 10 Stocks to Buy

5. Kyndryl Holdings Inc. (NYSE:KD)

Greenlight Capital’s Equity Stake: $116.71 Million

Number of Hedge Fund Holders: 36

Kyndryl Holdings, Inc. (NYSE:KD) is a technology and IT infrastructure services provider offering cloud services, core enterprise, and cloud services. The company has started leveraging GenAI technologies to improve results for clients in the travel, healthcare, and manufacturing sectors.

Einhorn invested in Kyndryl on optimism that the company was well positioned to move on from the ‘bad business’ thesis when it was tied to IBM. The billionaire investor is optimistic about the company’s turnaround strategy as it moves to offer solutions from multiple vendors. Pricing and margins should be raised as contracts expire, generating more value.

Kyndryl Holdings, Inc. (NYSE:KD) leverages the surge in artificial intelligence (AI) by offering advisory services and technical assistance to large businesses aiming to utilize AI technologies effectively. Its offerings are bolstered by extensive operational data and its proprietary machine-learning capabilities.

Following its breakaway from IBM, Kyndryl Holdings, Inc. (NYSE:KD) has been transforming to embrace a new phase in information technology, and this is wider than a frustrating shift from aligning its fiscal year with the calendar year to one that ends in March.

It’s been selling off unprofitable ventures as it guides its clients towards a mixed cloud approach. Simultaneously, Kyndryl Holdings, Inc. (NYSE:KD) is releasing contracts with low-profit margins acquired during its spin-off from IBM. Consequently, profit margins are expected to increase as the company’s revenue enters a period of steady growth in the upcoming years.

By the first quarter of fiscal 2025, the company’s earnings totalled $3.74 billion, showing a 10.83% drop compared to the previous year. The earnings per share amounted to $0.13. The drop in earnings was mainly due to the deliberate withdrawal from hostile and low-profit business areas within existing customer relationships.

36 hedge funds are long in Kyndryl Holdings Inc. (NYSE:KD) right now, with the largest stake at $116.71 million, held by Greenlight Capital.

Greenlight Capital stated the following regarding Kyndryl Holdings, Inc. (NYSE:KD) in its Q2 2024 investor letter:

“In addition to gold, we had four material winners in our long portfolio this quarter. Kyndryl Holdings, Inc. (NYSE:KD) rose from $21.76 to $26.31. The company had another good report, with results and guidance exceeding expectations on all key metrics. KD also pulled forward its target to achieve constant currency revenue growth, now starting in the fourth quarter of the current fiscal year.”