We recently published a list of Billionaire Steve Cohen’s 10 Large-Cap Stock Picks With Huge Upside Potential. In this article, we are going to take a look at where Walt Disney Company (NYSE:DIS) stands against other billionaire Steve Cohen’s large-cap stock picks with huge upside potential.
What does the future hold for the US economy and equities amid punitive tariffs, immigration crackdown and federal spending cuts? That’s the million-dollar question as the chairman and CEO of hedge fund Point72 Asset Management, Steve Cohen, sounds alarm bells warning the US economy could be on the brink amid macroeconomic uncertainties.
The billionaire investor has fired a warning shots, insisting that President Donald Trump’s aggressive trade policy could cause the economy to grow at a much slower rate of 1.5% in the second half of the year, down from an initial growth forecast of 2.5%. The warning comes on Trump touting tariffs for various purposes, including lowering trade imbalances and gaining more negotiating power over other nations. Nevertheless, their negative impact continues as the service sector, a key economic driver, grows slowly from 2023.
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“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen said Friday at the FII Priority Summit in Miami Beach, Florida. “On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as … the last five years and so.”
Cohen has warned that the good times that saw the equity market trickle to record highs are over as the US economy’s outlook is uncertain due to the tariff plan laid out by Trump. True to Cohen’s warnings, the US stock market has pulled back significantly from record highs. Given the uncertain macro environment, the S&P 500 is already down by about 8% for the year and on the cusp of entering the correcting phase.
Echoing similar sentiments is Morgan Stanley CIO Mike Wilson, who insists a significant correction has been on the cards since 2023. According to Wilson, investors had pushed stocks upwards, with valuation skyrocketing above historical norms and beyond the value of their fundamentals. Therefore, a rapid descent should be expected as headwinds soar left, right and centre.
“I’m actually pretty negative for the first time in a while,” Cohen said. “It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.”
On the other hand, Cohen remains optimistic about the artificial intelligence outlook despite DeepSeek’s revelation and development on the development of cost-effective AI models rattling the US markets. According to Cohen, DeepSeek’s development of cost-effective AI models is positive despite raising concerns about spending on powerful AI chips developed by US companies.
Cohen is one of the billionaire investors taking advantage of the artificial intelligence boom through strategic investments. His portfolio at Point72 Asset Management hedge boasts significant exposure to tech giants developing and leveraging various AI innovations. Likewise, Point72 Asset Management has already unveiled a new artificial intelligence-focused fund that posted a 14% gain in the last three months of 2024 growing to $1.5 billion.
Our Methodology
We combed Point 72 SEC Q4 2024 13F filings to identify billionaire Steve Cohen’s 10 large-cap stock picks with huge upside potential. We focused on stocks with a market cap of more than $40 billion with significant upside potential. We then analyzed the stocks on why they stand out as solid investments well poised to generate significant value even on the overall equity market turning bearish. Finally, we listed the stocks in ascending order of upside potential.
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).
Steven Cohen of Point72 Asset Management
The Walt Disney Company (NYSE:DIS)
Market Cap as of April 24: $157.80 Billion
Point72 Asset Management’s Equity Stake: $345.19 Million
Analysts’ Upside Potential as of April 24: 44.11%
Number of Hedge Fund Holders: 108
The Walt Disney Company (NYSE:DIS) operates as an entertainment company worldwide through three segments: Entertainment, Sports, and Experiences. Amid the diversified entertainment empire, its stock has underperformed the overall market, tanking by about 22% year to date. Nevertheless, Wolfe Research upgraded the stock to an Outperform from Peer Perform and set a price target of $112.
The bullish stance stems from The Walt Disney Company (NYSE:DIS) delivering better than expected first quarter fiscal 2025, underscoring growth in various segments. Disney generated a 5% increase in Q1 2025 revenue to $24.7 billion and a 35% increase in earnings per share to $1.40. The company’s long-term prospects hinge on its direct-to-consumer streaming business led by Disney+, which is in high demand despite the higher subscription prices. The segment saw a 9% increase in revenue to $6.1 billion.
Thanks to significant intellectual property, The Walt Disney Company (NYSE:DIS) is poised to become a streaming giant as it prepares to launch a flagship ESPN streaming service. Disney’s parks, cruises, and consumer products segment are other important growth drivers, given the high barriers to entry into the industry. On the other hand, the linear cable television segment remains under pressure, having suffered a 7% setback in sales as the cord-cutting menace gathers steam on the advent of streaming services.
Overall, DIS ranks 3rd on our list of billionaire Steve Cohen’s large-cap stock picks with huge upside potential. While we acknowledge the potential of DIS as an investment, our conviction lies in the belief that 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 DIS but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
