Steven Cohen Doubles The S&P 500 — And His Next Bet's All Gut

Steven Cohen‘s Point72 Asset Management just pulled off what most fund managers only dream of — doubling the S&P 500‘s three-year return — and he’s still not easing up. The billionaire investor’s next move? A fresh swing into biotech, backing Palisade Bio Inc (NASDAQ:PALI) — a tiny, high-volatility stock working on gut-health therapies that’s suddenly caught Wall Street’s attention.

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A Hedge Fund That Hits For Power

The top 20 holdings in Point72’s Q2 filing have surged 131% cumulatively over the past three years, compared to just 64% for the S&P 500. That kind of outperformance puts Cohen’s $42 billion hedge fund in a rare class of consistent market beaters. The firm’s 18% return in the second quarter alone underscores its agility in navigating both AI euphoria and biotech resurgence.

But Cohen’s latest trade is turning heads for another reason: size. His fund initiated a $7.6 million position in Palisade Bio, a clinical-stage biotech developing a drug to treat ulcerative colitis — a chronic intestinal condition that affects millions. It’s a minuscule 0.03% slice of his portfolio, yet small bets like these have often been the early signals of Cohen’s market instincts at work.

Read Also: Steven Cohen’s Biotech Bets Are Getting Bolder — And Smaller

Betting On The Gut — Literally

Palisade Bio recently closed a $138 million public offering led by healthcare heavyweights like RA Capital, Perceptive Advisors, and Janus Henderson, to fund Phase 2 trials for its lead drug PALI-2108.

The stock has surged nearly 200% in the past month and another 11% in pre-market trading on Wednesday, as investors pile into the autoimmune therapy story after Cohen.

Investor Takeaway

Cohen doesn’t just chase trends — he spots inflection points. With Point72 delivering twice the S&P’s return and now eyeing biotech names like Palisade Bio, the billionaire trader seems to be betting that the next wave of alpha may come from the gut — not just the grid.

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Image created using artificial intelligence via Midjourney.