Seth Klarman’s Baupost Group rarely shows its cards, so when the latest 13F filing (holdings as of March 31, 2026, filed May 14, 2026) disclosed his five largest long common-stock positions, the disclosure read like a treasure map. One of them, an industrial distributor most retail investors have never heard of, posted YoY earnings growth of 48.1% while quietly becoming a pure-play on the AI data-center buildout. If Klarman is buying value where nobody is looking, this is the list to reverse-engineer before the next 13F resets the game.
1. Wesco International: The Surprise Data-Center Kingmaker
Klarman built his career on mispriced compounders hiding in plain sight, and Wesco International (NYSE:WCC | WCC Price Prediction) is exactly that. The electrical and communications distributor sells the picks and shovels of the AI infrastructure boom, from switchgear to fiber to the copper that connects hyperscaler racks. When Goldman, PineBridge, and Neuberger all frame 2026 as an AI capex-driven multiyear infrastructure cycle spanning data centers, power, and grid upgrades, Wesco sits on the receiving end of every purchase order.
Q1 2026 confirmed the thesis violently. Data center sales of $1.4 billion were up approximately 70% YoY, now representing 24% of total revenue, while backlog jumped 22% to a new record and adjusted diluted EPS climbed 52.5% YoY to $3.37. Management raised full-year 2026 adjusted EPS guidance to $15.00 to $17.00.
Our model tags WCC a BUY with 20.1% upside to a base case of $393.94, backed by 82% bullish analyst sentiment and a confidence level of 0.9. Shares are already up 65.23% over the past year. Klarman had a reason to size this position first. The reason gets bigger when the next name enters the room.
2. Amazon: The Heavyweight That Still Has Room to Run
The obvious anchor. Amazon (NASDAQ:AMZN) is Klarman’s largest disclosed common-stock holding and the highest-conviction way to own the same AI capex cycle Wesco sells into. AWS is the customer that funds the buildout, and Andy Jassy just told the market “AWS is growing 28% (our fastest growth in 15 quarters)… our chips business topped a $20 billion revenue run rate.” That is a hyperscaler compounding faster on a bigger base, exactly what mega-cap bulls need to justify the multiple.
Q1 2026 was a five-peat: EPS of $2.78 vs $1.73 estimate, a 60.69% beat and the fifth consecutive EPS beat, on revenue of $181.52B, up 16.6% YoY. Advertising ran to $17.24B, up 24%, and management guided Q2 sales to $194 to $199B. Meanwhile, prediction markets assign a 98.5% probability that Amazon’s 2026 capex exceeds $170B, with meaningful mass above $200B. That is the demand signal for every downstream infrastructure name on this list.
Our read is BUY with 31.18% upside to $324.47 and a 94% bullish analyst consensus (62 buy or strong buy ratings, 0 sells). Shares are up 8.26% YTD at $247.38. Klarman’s next position swings hard in the opposite direction: value, not growth, and bleeding on the front page.
3. Elevance Health: The Contrarian Managed-Care Bet
This is the Klarman trade in its purest form. Elevance Health (NYSE:ELV) is dumped, hated, and pricing in a permanent margin impairment that the company itself is telling investors will reverse. The July 15 earnings report landed with a thud: benefit expense ratio of 89.7%, up 80 basis points, Health Benefits operating gain compressed to $896M from $1.56B YoY, and the stock got hit for -11.31% over one week.
Klarman buys numbers. CEO Gail Boudreaux told investors, “We are raising our 2026 adjusted EPS guidance to at least $27.00… reinforce our confidence in returning to at least 12% adjusted EPS growth in 2027.” Elevance carries $5.3B of remaining buyback authorization and raised operating cash flow guidance to at least $6.0B. On a forward EPS of $32.39, that is an implied P/E of 13.
Our conviction: BUY with 42.87% upside to a base case of $529.66, backed by zero sell ratings across 22 analysts and a beta of 0.68 that keeps a lid on drawdown volatility. This is the position Klarman would rationally add to on weakness. The fourth name plays a different game entirely: predictable cash and quiet compounding.
4. Restaurant Brands International: The Cash-Flow Compounder
Every Klarman portfolio needs a boring cash machine. Restaurant Brands International (NYSE:QSR) is that name. Franchised royalty streams from Burger King, Tim Hortons, Popeyes, and Firehouse Subs throw off cash regardless of the macro cycle, and the Reclaim the Flame turnaround at Burger King US is finally showing up in comps.
Q1 2026 delivered Burger King US comparable sales of +5.8% vs -1.1% prior year, a 20th consecutive quarter of positive Tim Hortons comps at +1.6%, and free cash flow of $169M, up 212.96%. Management is targeting 8%+ organic adjusted operating income growth for FY2026 and has $500M of share repurchases planned alongside a $0.65 quarterly dividend.
Here is the read: our model tags QSR a HOLD with only 3.45% base case upside to $77.73, because shares are already up 15.1% YTD and are approaching fair value. The beta of 0.53 and 64% analyst bullish sentiment mean this position is doing exactly what Klarman needs it to do: protect capital while the swing positions work. The payoff at #5 is where the real optionality lives.
5. Union Pacific: The Transcontinental Payoff
The catalyst nobody else on this list has. Union Pacific (NYSE:UNP) is in the regulatory process to acquire Norfolk Southern and create the first transcontinental railroad in US history. CEO Jim Vena laid it out: “As we advance through the regulatory process to create America’s first transcontinental railroad, we have a solid foundation for another year of industry-leading results.” If the deal clears, the combined entity locks in a coast-to-coast freight moat that nobody can replicate.
The operating base is already elite. Q1 2026 posted an adjusted operating ratio of 59.9%, improved 80 basis points, terminal dwell of 19.7 hours (best-ever, up 11%), and adjusted diluted EPS of $2.93 vs $2.86 estimate. Prediction markets are pricing in a 68% probability UNP beats quarterly earnings at the upcoming July 23 report.
Shares have already moved: up 30.8% YTD and 32.46% over one year to $300.59. Our model reads BUY with 9.52% upside to $329.22, but that base case explicitly excludes merger synergies. The 65% bullish analyst consensus hasn’t fully priced in the transcontinental optionality yet. That is the payoff Klarman is holding.
The Klarman Playbook, Reassembled
Read the five together and the strategy snaps into focus: Wesco and Amazon are the AI capex barbell, Elevance is the bruised value reversal, QSR is the cash-flow ballast, and Union Pacific is the catalyst-driven kicker. Four of the five carry BUY conviction with double-digit or better base case upside from current levels. The next 13F drops in mid-August and will reset the board. Investors waiting for the filing to confirm what the numbers already say are trading position sizing for hindsight.
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks