Many Hedge Funds Bought Up This Stock Last Quarter — And You’ve Probably Never Heard of It

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Every once in a while, the hedge funds start circling one surprising company that few retail investors have ever even heard of. Undoubtedly, the list of hedge fund favorites hasn’t really changed all too much in the past year. Whether we’re talking about the hard-hit hyperscalers or UnitedHealth Group (NYSE:UNH), the list of hedge fund bets has been somewhat predictable of late. That is, with the exception of one name that nearly a dozen big-name hedge funds couldn’t get enough of in the first quarter of the year.

Enter shares of Sunbelt Rentals (NYSE:SUNB), a $34.5 billion big-ticket equipment rental firm that’s probably off the radar of everyday retail investors. The company rents out expensive heavy-duty industrial equipment (think forklifts and excavators) as well as power generation systems, HVACs, and other expensive equipment that’s not at all fun or exciting.

The AI buildout is heating up, but the catalyst doesn’t look priced in yet

With the rise of the AI revolution, perhaps a name like Sunbelt Rentals is still hiding under the radar as tailwinds arising from the boom look to power a big, sustained uptick in business. Indeed, those big-budget mega projects are the big catalyst for the firm, and I’m not so sure how much of it is baked into the stock while the shares are trading for just 25.2 times trailing price-to-earnings (P/E) or 19.6 times forward P/E.

That’s a multiple that’s absurdly cheap, given the sales drivers that could lie ahead as the buildout moves into a “Mad Max” kind of stage and the CapEx begins spreading more broadly across new corners of the market. In any case, perhaps there’s no mystery as to why the company has been aggressively buying back its own shares. The company moved ahead with another $1.5 billion share repurchase program — a pretty big deal for a firm worth just shy of $35 billion.

Indeed, the AI data center buildout is moving at high speed. Like it or not, mega-cap tech is positioned to spend growing sums on the effort. And, as we found out in recent months, it’s not just the semiconductor firms that stand to win from the epic buildout. Shovels are going to need to go into the ground, power generation systems are a must, and, of course, all of these buildings are going to need climate control.

The case for Sunbelt Rentals over SpaceX as the new stock to own in 2026

With shares of Sunbelt Rentals debuting at the start of March, perhaps it’s no mystery as to why the smart money has been piling into such a name. To say that the debut of Sunbelt Rentals on the NYSE was relatively quiet compared to Space Exploration Technologies (NASDAQ:SPCX) would be a colossal understatement.

But as retail focuses on fun and exciting in a year of mega-cap AI IPOs that feel almost guaranteed to hit the ground running, perhaps the best-performing new stock of the year is a name that’s a less-than-obvious, but more predictable beneficiary of the great AI data center buildout.

In any case, for value-conscious investors looking to follow the smart money, I think it’s hard to argue that Sunbelt Rentals might be the most exciting new stock of the year. And that says a lot in a year that saw SpaceX touchdown to applause. As Anthropic and OpenAI follow up, things are about to get even more exciting, but perhaps exciting isn’t the only thing that matters.

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