Carnival Corporation & plc (CCL): Among Steven Cohen's Mid-Cap Stock Picks with Huge Upside Potential

We recently published an article titled Billionaire Steve Cohen's 10 Mid-Cap Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Carnival Corporation & plc (NYSE:CCL) stands against Steve Cohen's other mid-cap stock picks with huge upside potential.

Steven Cohen has established himself as a leading figure in the hedge fund industry. His career began with the founding of S.A.C. Capital Advisors in 1992. In 2014, he transitioned his investments to Point72 Asset Management, where he serves as Chairman and CEO. Point72 leverages Cohen’s expertise in active trading while integrating cutting-edge advancements in technology, data analytics, and artificial intelligence, positioning itself at the forefront of modern finance. The firm employs a discretionary investment approach across multiple strategies, including long/short equities, global macroeconomic investing, systematic trading, and venture capital & growth equity. As of January 1, 2025, Point72 manages approximately $36.9 billion in assets and has a workforce of 2,800 employees worldwide. The firm has a good performance history, with the fund's top 50 stocks boasting a three-year annualized return of 14.47%.

The U.S. economy plays a pivotal role in shaping the stock market and hedge fund performance, with macroeconomic trends influencing investor sentiment, capital flows, and risk management strategies. The current economic uncertainty facing the US economy continues to worry investors. Last week, according to the National Bureau of Economic Research, the US economy’s GDP for the first quarter of 2025 contracted by 0.3%, a sharp contrast to the previous quarter’s 2.4% growth. While a recession is officially confirmed only after consecutive quarters of negative GDP growth, many market analysts caution that the economy is on the brink of one.

Economic data released over the past few days provided some clarity to investors. Investor sentiment was boosted by Friday’s employment data, which showed the U.S. unemployment rate holding steady at 4.2%, suggesting that the labour market remains resilient despite growing macroeconomic headwinds. This week, the Federal Open Market Committee voted unanimously to maintain the Fed rate between 4.25% to 4.5%. Federal Reserve Chair Jerome Powell reassured investors that the central bank is prepared to wait for greater clarity before adjusting interest rates, citing persistent uncertainty stemming from President Trump’s escalating tariff agenda.

Given the heightened volatility, investors focus on a balanced portfolio to mitigate risks. In the long run, hedge funds thrive on inefficiencies, volatility, and sector rotations, adjusting their portfolios to exploit divergences between economic fundamentals and market behaviour. As the U.S. economy evolves, hedge funds continuously recalibrate their strategies to align with changing market conditions and investor expectations. This strategy is applied by Point72 Asset Management through its discretionary investment approach to give higher returns to its shareholders.

One approach to achieving a balanced portfolio is through mid-cap stocks, which offer a compelling blend of growth potential and relative stability. Unlike large corporations, mid-cap companies are often more agile in adapting to shifting economic conditions, enabling them to foster innovation and expansion at a faster pace. Mid-Cap stocks are past the uncertainty associated with early-stage start-ups, thus offering ample room for growth and higher returns compared to large-cap companies, which tend to have slower growth trajectories. Mid-cap companies also have the potential to evolve into large-cap firms over time, allowing investors to benefit from significant capital appreciation. According to S&P Global, the mid-cap S&P index has consistently outperformed the large-cap broader index since 1994, delivering an annualized return of 12% compared to the latter’s 11%.

Our Methodology:

For this article, we examined Point 72's Q4 2024 13F filings to identify billionaire Steve Cohen’s 10 Mid-Cap stock picks with huge upside potential. Our focus was on stock with a market cap ranging between $10 billion and up to $40 billion. We then picked stocks that had the best upside potential, based on analyst rankings.

At Insider Monkey, we are obsessed with hedge funds. 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).

Carnival Corporation & plc (NYSE:CCL)

Upside Potential: 41.54%

Market Cap: $25.39 billion

Carnival Corporation & plc (NYSE:CCL) has been a global provider of leisure travel services for more than five decades. CCL boasts about being the largest cruise company, with a fleet of more than 90 ships visiting over 800 ports worldwide. This includes the US, Europe, Australia, and other countries. CCL operates through four segments: NAA Cruise Operations, Europe Cruise Operations, Cruise Support, and Tour and Other.

Regarding the impact of the global tariff wars on the travel and leisure industry, Treasury Secretary Scott Bessent spoke in April to CNBC about the impact of tariffs on countries where CCL operates. He said:

"If they come to the table with solid proposals, I think we can end up with some good deals."

The company has shown it is capable of mitigating these risks, nonetheless. In terms of financial performance, Carnival Corporation & plc (NYSE:CCL) results for the first quarter of 2025 are a testament to the company’s dominant market position. Revenue was up by 7.47% on a year-on-year comparison, beating forecasts by $66.68 million, with an EPS of $0.13. This was attributed to higher onboard sales across all categories. Management also provided guidance for the next quarter to an estimated $6.20 billion and EPS of $0.23.

Overall CCL ranks 2nd on our list of Steve Cohen's mid-cap stocks with huge upside potential. While we acknowledge the potential of CCL 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 CCL 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.