Should You Buy Billionaire Investor Stephen Mandel’s Top 5 Stock Picks in August?

Stephen Mandel’s Lone Pine Capital just showed its hand. The latest 13F filing, dated March 31, and filed May 15, reveals five U.S.-listed positions that collectively map the exact trades hedge funds are chasing right now: AI power, semiconductor CapEx, aerospace materials, wealth consolidation and ad-tech AI. One of them has run 99.03% in the last year, and the punchline pick just tore through a billion-dollar buyback in a single quarter.

1. Carpenter Technology (CRS): The Surprise Pick Buried in Every Jet Engine

Start with the name most investors overlook. Carpenter Technology (NYSE:CRS | CRS Price Prediction) forges the specialty alloys that go into jet engines, missile systems, and medical implants. When Boeing and Airbus ramp production and defense budgets swell, Carpenter’s Specialty Alloys segment prints money. Mandel is buying the shovel maker to the aerospace super-cycle.

The Q3 FY26 report was a statement. Revenue landed at $811.5 million, up 11.6% year over year and beating consensus by 1.75%, while SAO adjusted operating margins expanded to 35.6% from 29.1%, the 17th straight quarter of margin expansion. Management then raised full-year FY26 operating income guidance to $700 million to $705 million, with CEO Tony Thene calling Aerospace and Defense “at the beginning of the growth cycle.”

The stock has already responded: up 53% this year and nearly 108% over the past year, with eight Buy or Strong Buy ratings against one Hold rating and an analyst target of $571.33. Forward P/E sits at 23x, reasonable for a business with a raised guide and a cycle that management says has not peaked. Sentiment reads bullish at 60.1. Read: the re-rating has largely played out, and further upside now hinges on continued guide raises. The next pick is where megawatts meet market cap.

2. Vistra (VST): The AI Power Trade Mandel Isn’t Selling

Vistra (NYSE:VST) is the purest listed bet on the collision between hyperscaler AI buildouts and a US grid that can’t add nuclear or gas capacity fast enough. Meta, AWS, and Microsoft are locking down decades of dispatchable megawatts, and Vistra is on the sell side of that trade with nuclear and natural gas fleet already in place.

Q1 FY26 revenue hit $5.64 billion, beating estimates by 7.58%, while East segment adjusted EBITDA jumped to $801 million from $514 million a year earlier on higher capacity prices and the Lotus acquisition. The pending 5,500-MW Cogentrix natural gas acquisition targeted to close in the second half of 2026 and 20-year Meta PPAs for more than 2,600 MW across PJM nuclear facilities are not yet baked into the 2026 adjusted EBITDA guide of $6.8 billion to $7.6 billion.

Here’s the wrinkle: shares are down 29% over the past year and down 10% year to date, even as sentiment sits bullish at 65.38. That is the setup: fundamentals accelerating, price consolidating. If Cogentrix closes on schedule, the 2027 midpoint opportunity of $7.4 billion to $7.8 billion gets an upside revision. Now for the name that supplies the machines that make the chips that fill Vistra’s data centers.

3. ASML: The Semiconductor CapEx Supercycle in One Ticker

ASML (NASDAQ:ASML) has a monopoly on EUV lithography. Every leading-edge AI chip from TSMC, Samsung, and Intel goes through an ASML machine. When hyperscaler capex explodes, ASML’s order book follows with a lag, and that lag is finally closing.

Q2 FY26 revenue came in at $10.65 billion, up 21.25% year over year and above the high end of guidance, with EPS of $8.67 and operating margin expanding to 37.1% from 34.6%. Management then raised FY26 revenue guidance to $49.11 billion to $51.4 billion and outlined plans to add 30% to 2026 low-NA EUV capacity for 2027, with another 30% under investigation for 2028. CEO Christophe Fouquet flagged “AI-related investments driving demand for advanced Logic and Memory chips” as customers accelerate capacity plans.

The stock is up 138.06% over the past year and 42.11% year to date. Sentiment reads neutral at 59.32, but the 30-day trend has climbed 17.69 points. This is a hold-your-winners setup. The buy case now depends on 2027 orders converting, and they are. Next, we pivot from silicon to the platforms that manage the money silicon is minting.

4. LPL Financial (LPLA): The Wealth Consolidation Machine

LPL Financial (NASDAQ:LPLA) is the country’s largest independent broker-dealer, and Mandel is playing the endgame of wealth management consolidation. The Commonwealth Financial integration is on track for Q4 2026 with expected asset retention of roughly 90%. That is the catalyst.

Q1 FY26 delivered adjusted EPS of $5.60 versus $5.47 consensus, a fourth consecutive beat, on revenue of $4.94 billion, up 34.6% year over year. Advisory revenue grew 55% to $2.62 billion, and total client assets reached $2.34 trillion, up 30% year over year, with advisory now 59.5% of the mix versus 54.5% a year ago. CEO Rich Steinmeier called it “record earnings per share” with Commonwealth prep underway.

Shares are down 2.48% YTD and 10.88% over the past year, but up 25.2% in the past month, with the analyst target at $413.71 against 13 Buy or Strong Buy ratings and three Hold ratings. Forward P/E is 13x, cheap for a business compounding advisory assets at 42%. Sentiment is neutral at 44.47, meaning the market has not yet priced in Commonwealth’s Q4 integration. That is the window. Now for the payoff.

5. AppLovin (APP): The Highest-Margin Payoff on the List

AppLovin (NASDAQ:APP) is what happens when AI eats digital advertising. After divesting its games business, AppLovin is a pure-play ad-tech platform running on the AXON 2 engine, and the operating leverage is unlike anything else in Mandel’s book.

Q1 FY26 revenue reached $1.84 billion, up 24.15% year over year and beating consensus by 3.78%. But the real story is the margin stack: operating income of $1.44 billion at a 78% operating margin, adjusted EBITDA of $1.56 billion at 85% margin, up from 81%, and free cash flow of $1.29 billion. Then the capital return: $1.0 billion returned via buybacks in Q1 alone, retiring 2.2 million shares.

Here is the tension: shares are down 37.12% year to date but flat over the past year, even as 29 of 32 analysts rate it a Buy or Strong Buy with a price target of $654.60. Forward P/E is 29x. Sentiment reads neutral at 56.84 after cooling from 64.51 a month ago. The drawdown is the reason this is the payoff pick, with fundamentals still intact. Mandel is holding through it.

The Setup

Mandel’s five names trace a single macro thesis: AI infrastructure needs power (Vistra), power needs chips (ASML), chips need alloys (Carpenter), the wealth those trades create needs a home (LPL) and the platforms selling to that wealth compound fastest (AppLovin). Three of the five are trading below where they should be given the guides on the table. The window before the next earnings cycle re-rates them is measured in weeks, not quarters.

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