What are the top stock picks identified by billionaire Prem Watsa? How does Micron Technology, Inc. compare to these picks? What factors have contributed to the recent market corrections in tech stocks? How does Prem Watsa view the current state of value investing? What strategic changes is Micron Technology implementing to capitalize on AI-driven growth?
We recently compiled a list of Billionaire Prem Watsa’s 10 Stock Picks With Highest Potential. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against Prem Watsa’s other stock picks. Momentum and technology stocks have dominated the markets over the past decade. They have been the catalyst behind valuations in the overall equity markets getting out of hand. Not anymore. A full-blown correction is in play, going by major US indices pulling back by up to 10% from all-time highs. The pullback has mostly been felt in the tech space, where most counters have been trading at premium valuations for years.
The correction being experienced comes on the backdrop of billionaire investor Prem Watsa insisting that value investing has been overshadowed over the past decade. The renowned investor and CEO of Fairfax Financial Holdings insists on patience and discipline in value investing as one of the ways of generating long-term returns.
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“In the last 10 years since that 2008, 2009 crash—call it the great financial crash—value investing basically, I think, one, maybe two years we’ve had that value-oriented stocks have done well compared to momentum.”
The dominance of technology stocks led by the “magnificent seven” stocks has tested the resolve of value-focused investors in recent years. The stocks have posted double-digit percentage gains over the past two years, resulting in premium valuations at the back of the artificial intelligence-driven rally. However, the stocks have come under pressure in 2025 amid a string of headwinds, among them the growing concerns about the impact of the US trade war.
Growing concerns that the US Federal Reserve will not cut interest rates as inflation ticks high on the pitfalls of the US trade war and tariffs have also sent tech stocks tumbling the most. With the stocks pulling back, billionaire Watsa insists that now may be the best time to look for value investments, trading at highly discounted valuations with significant upside potential.
For Watsa, the Canadian “Warren Buffett,” focus should always be on value investing, focusing on strong businesses at fair prices.
“We just think value investing—where you’re buying something, a dollar for 50 cents, is the expression—good companies run by good, honest, hardworking presidents, CEOs. And you’re buying them at fair prices. We think over time that should work.”
Watsa has built a reputation for identifying and focusing on undervalued opportunities. He has also cemented his place as one of the most respected figures in global finance with a reputation for navigating crises, such as the one in play amid the US trade war. Fairfax Financial Holdings, the holding company that Watsa founded in 1985, has carved a name over its disciplined underwriting and value-oriented investment strategy. It also focuses on delivering above-average returns over time. With a portfolio value of about $1.5 billion, the holding company portfolio is highly diversified across basic materials technology financials and consumer cyclical sectors.
We combed Fairfax Financial Holdings Limited SEC Q4 2024 13F filings to identify Billionaire Prem Watsa’s 10 stock picks with highest potential. We then settled on stocks with more than 30% upside potential based on analysts ratings and analyzed why the stocks stand out as solid value investments well poised to generate significant value. Finally, we ranked the stocks in ascending order based on the value of the stock’s upside potential after highlighting hedge fund sentiment on the stocks.
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).
A close-up view of a computer motherboard with integrated semiconductor chips.
Number of Hedge Fund Holders: 94
Fairfax Financial Holdings’ Stake: $6.73 Million
Analysts’ Upside Potential as of April 21: 90.81%
Micron Technology, Inc. (NASDAQ:MU) is a technology company that provides memory and storage solutions for a wide range of applications, including computing, consumer electronics, enterprise storage, and automotive. It manufactures DRAM, NAND, and NOR memory chips. It is one of billionaire Prem Watsa’s top stock picks, and analysts insist it has 86% upside potential.
On March 27, analysts at Wells Fargo reiterated a Buy rating on the stock, citing strong demand for its storage solutions amid tighter market conditions. Sharing similar insights are analysts at JPMorgan who insist Micron Technology, Inc. (NASDAQ:MU) has minimal exposure to specific product stock-keeping units affected by regulatory actions in China. The analysts reiterate the significant unsatisfied demand for artificial intelligence in China.
The remarks come as forecasts indicate Micron Technology, Inc. (NASDAQ:MU) revenues are poised to increase by 41% in 2025. Likewise, Micron Technology has announced a strategic reorganization of its business to capitalize on AI-driven growth opportunities. The company is to transition to four new business units of Cloud Memory (CMBU), focusing on hyperscale cloud customers and high-bandwidth memory; Core Data Center (CDBU), serving OEM data center customers; Mobile and Client (MCBU), handling mobile and client segments; and Automotive and Embedded (AEBU), focusing on automotive, industrial, and consumer segments.
Overall, MU ranks 1st on our list of Prem Watsa’s stock picks with highest potential. While we acknowledge the potential of MU 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 MU but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Among Prem Watsa’s Stock Picks With Highest Potential
Prem Watsa, often referred to as the "Canadian Warren Buffett," is an investment magnate renowned for his value investing strategy and keen financial insights. As the founder, chairman, and CEO of Fairfax Financial Holdings, Watsa has earned a reputation for identifying undervalued stocks with significant long-term potential. His investment philosophy, centered on the principles of patience, thorough research, and a deep understanding of market dynamics, has led to impressive returns for his shareholders over the years.
As of the latest available data, several stocks in Watsa’s portfolio stand out for their potential upside. Below, we explore some of these picks, analyzing their business models, market conditions, and growth prospects that align with Watsa’s investment approach.
1. Toronto-Dominion Bank (TD)
One of Watsa’s most notable picks is Toronto-Dominion Bank, one of Canada’s largest financial institutions. TD Bank boasts a robust retail banking network across Canada and the United States, making it well-positioned for growth. With a solid balance sheet, consistent dividend payments, and a history of prudent lending practices, TD offers considerable upside potential.
Furthermore, as interest rates rise, banks like TD typically benefit from improved net interest margins. This could lead to increased profitability, making TD an attractive investment for those seeking stability and growth in the financial sector. Additionally, the bank’s expansion into U.S. markets and investments in digital banking provide a further catalyst for potential growth.
2. Suncor Energy (SU)
Suncor Energy, a leading integrated energy company in Canada, has also caught Watsa’s attention. In a world increasingly focused on sustainability, Suncor is making strides in diversifying its energy portfolio while still operating within the traditional oil and gas sector. The company has significant reserves and production capabilities, which provide a solid foundation for future cash flows.
Moreover, as the global economy continues to recover from the pandemic and demand for energy rises, Suncor stands to benefit from increased oil prices. Its commitment to refining and renewable energy investments adds an interesting layer to its future growth potential, making it an appealing option for investors looking at energy stocks.
3. BlackBerry Limited (BB)
Once a dominant force in the smartphone market, BlackBerry has reinvented itself as a leader in cybersecurity and IoT (Internet of Things) solutions. Watsa’s investment in BlackBerry reflects his belief in the company’s transformation and its unique position within a rapidly evolving technology landscape.
The increasing demand for cybersecurity solutions, especially in the wake of growing threats and regulatory requirements, positions BlackBerry favorably in the tech sector. With strategic partnerships and a focus on innovation, the company is showcasing its ability to adapt and thrive, thus presenting potential for substantial long-term gains.
4. KCG Holdings
Watsa’s stake in KCG Holdings highlights his knack for identifying companies that are undergoing significant change. As a provider of market-making and trading services, KCG plays a crucial role in providing liquidity to financial markets. The company’s potential for growth stems from its scalability and the increasing reliance on electronic trading platforms.
Investors are especially interested in KCG due to its commitment to technology and operational efficiency. In an era where technological advancements continue to shape the finance sector, KCG’s focus on innovation could lead to enhanced profitability and market share.
5. Continental Gold (CNL)
Watsa’s investment in Continental Gold, a gold exploration company with substantial assets in Colombia, reflects his appreciation for the intrinsic value of gold as a hedge against inflation and market volatility. As economic uncertainties loom and geopolitical tensions persist, the demand for gold typically rises.
Continental Gold’s substantial reserves and exploration potential in a gold-rich region could unlock significant value for shareholders. If gold prices continue to soar, companies like Continental Gold are well-positioned to benefit, making this an intriguing investment in Watsa’s portfolio.
Conclusion
Prem Watsa’s investment strategy is characterized by a meticulous approach grounded in fundamental analysis and a focus on value. His current stock picks, including Toronto-Dominion Bank, Suncor Energy, BlackBerry, KCG Holdings, and Continental Gold, share common traits of strong fundamentals, potential for growth, and resilience against market fluctuations.
As investors seeking exposure to opportunities with long-term potential, these stocks not only parallel Watsa’s investment philosophy but also align with broader market trends. However, potential investors should conduct their own research and consider market conditions, economic indicators, and personal risk tolerance before committing to any investment.
In summary, Watsa’s strategic selections underscore the importance of investing in companies that are well positioned to adapt and thrive in an ever-changing economic landscape, showcasing the merit of a disciplined, value-oriented approach. As market dynamics continue to evolve, following Watsa’s investing cues could prove advantageous for those looking to make informed investment choices.
Prem Watsa, known as the "Warren Buffett of Canada," is the founder and CEO of Fairfax Financial Holdings. He has a reputation for investing in undervalued companies, mitigating risks, and adopting a long-term perspective. Here are several of his stock picks that have garnered attention for their potential:
BlackBerry Limited (BB): Once a leader in smartphone technology, BlackBerry has pivoted towards cybersecurity and software services. Analysts believe that its focus on security solutions for enterprises positions it well in a growing market.
Adventure Gold Inc. (AGE): This Canadian mineral exploration company has potential due to its portfolio of gold exploration projects. As gold prices fluctuate, companies like Adventure Gold could benefit from rising interest in precious metals.
Sirius International Insurance Group (SRG): Specializing in reinsurance and insurance, Sirius has been viewed positively due to its diversified portfolio and experienced management team, especially in a climate of rising insurance rates.
Resolute Forest Products (RFP): A key player in the forest products industry, Resolute has been recognized for its potential as demand for sustainable forestry products increases, paired with rising prices for lumber and paper.
Famous Dave’s of America, Inc. (DAVE): With a focus on high-quality barbecue food and an expanding footprint, Famous Dave’s could see growth as consumers continue to seek out dining experiences and quality take-out options.
Sierra Income Corporation (SIC): As a business development company, Sierra provides financing to small and medium-sized businesses. Its focus on high-quality portfolio companies may yield strong returns as these businesses grow.
Bank of America (BAC): Watsa has shown interest in banking stocks, including Bank of America, particularly if interest rates continue to rise, which could bolster bank profitability through higher net interest margins.
- Investments in Emerging Markets: Watsa has often highlighted the potential of emerging markets. His strategy includes identifying undervalued opportunities in regions with strong growth potential, capitalizing on market inefficiencies.
Each of these stocks reflects Watsa’s investment philosophy of value investing, emphasizing long-term growth while managing risk. Investors looking to follow his strategies should conduct their own research and consider market conditions before making decisions.