In this article, we will take a look at the 10 best growth stocks according to George Soros.
The Man Who Broke the Bank of England
George Soros, the owner of Soros Fund Management, is known as one of the most controversial investors in the history of investing. The now 94-year-old, “broke the Bank of England” after he reportedly made $1 billion from shorting the British pound in 1992. As of September 19, Soros has a net worth of $7.2 billion. He managed client money in New York from 1969 to 2011.
Soros Fund Management was founded in 1970 and manages almost $28 billion in net assets at the moment. The fund is the principal asset manager for Soros’ philanthropic venture, the Open Society Foundations (OSF). So far he has given away more than $32 billion of his fortune to the OSF. Last year, Soros handed over the fund to his eldest son, Alexander Soros, who now aims to take his philanthropic endeavors to another level.
George Soros’ Investment Philosophy
Soros is known for being ahead of the market. Historically, he has made financial decisions after gauging market feedback and predicting market activities, that have returned or saved him millions, if not billions. This is what he calls the “reflexivity” theory. By applying this theory to finance and investments, Soros values assets based on market feedback, predicts market bubbles, and exploits market opportunities. A recent example of this was when Soros pulled out a staggering $73 million from two major technology players right before the tech downturn in mid-July.
Soros also uses another method, which he calls the Soros’ Method, to forecast events in the financial markets using current data. He then tests his theories on small investments and if the theory seems to be working out, he expands his position or size of his investment. This, however, does not mean that Soros has never failed or encountered risk during his time as an investor. He has made multiple expensive decisions from which he learned lessons and has even quoted them in his books. Here is an excerpt of what he said in his book, Soros on Soros: Staying Ahead of the Curve:
“The prevailing wisdom is that markets are always right. I take the opposition position. I assume that markets are always wrong. Even if my assumption is occasionally wrong, I use it as a working hypothesis. It does not follow that one should always go against the prevailing trend. On the contrary, most of the time the trend prevails; only occasionally are the errors corrected. It is only on those occasions that one should go against the trend. This line of reasoning leads me to look for the flaw in every investment thesis. … I am ahead of the curve. I watch out for telltale signs that a trend may be exhausted. Then I disengage from the herd and look for a different investment thesis. Or, if I think the trend has been carried to excess, I may probe going against it. Most of the time we are punished if we go against the trend. Only at an inflection point are we rewarded.”
One can say that Soros’ degree in philosophy helped him carve his way into the financial markets. Now that we have studied Soros’ investment philosophy, let’s take a look at the 10 best growth stocks according to George Soros.
Our Methodology
To come up with the 10 best growth stocks according to George Soros, we examined his 13F portfolio and selected his top 10 growth stock picks, as of Q2 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Growth Stocks According to George Soros
10. NextEra Energy, Inc. (NYSE:NEE)
Soros Fund Management’s Stake Value: $44.32 Million
Number of Hedge Fund Holders: 73
NextEra Energy, Inc. (NYSE:NEE) is a prominent renewable energy company and one of the best growth stocks according to George Soros. The company generates, transmits, distributes, and sells electric power, generated through wind, solar, nuclear, and natural gas, across North America.
NextEra Energy, Inc. (NYSE:NEE) provides its services across two major segments including Florida Power & Light (FPL), an electric utility business, and NextEra Energy Resources (NEER), a clean energy producer. FPL accounts for the majority of its revenue. It delivers reliability 66% better than the national average and has residential bills 40% below the national average.
Since 2001, NextEra Energy’s (NYSE:NEE) innovations have helped customers save over $16 billion in fuel costs. During the second quarter of 2024, the company added more than 3,000 megawatts of new renewables and storage. To capitalize on its strategic investments, NextEra Energy (NYSE:NEE) plans to invest somewhere between $8 billion and $8.8 billion in capital expenditures for the fiscal full year 2024. At the end of Q2 2024, 73 hedge funds were bullish on the stock with total stakes amounting to $2.1 billion.
ClearBridge Investments’ ClearBridge Large Cap Growth Strategy stated the following regarding NextEra Energy, Inc. (NYSE:NEE) in its Q2 2024 investor letter:
“AI-related momentum was a key driver of performance in the second quarter, lifting the enablers in technology as well as holdings like renewable power producer NextEra Energy, Inc. (NYSE:NEE) that supply the increasing energy needs of data centers. Parts of the market lacking an AI connection, like our medical device holdings, underperformed despite no change to fundamentals. We have managed through several similar momentum periods over our tenure and have delivered long-term results for shareholders by staying true to an approach that emphasizes diversification across three buckets of growth companies (select, stable and cyclical) and seeks to take advantage of attractive entry points into quality growth businesses.”
9. Uber Technologies, Inc. (NYSE:UBER)
Soros Fund Management’s Stake Value: $50.85 Million
Number of Hedge Fund Holders: 145
Ride-hailing company Uber Technologies, Inc. (NYSE:UBER) is one of the best growth stocks to buy according to George Soros. Soros increased his position by 16% in UBER during the second quarter of 2024.
In Q2 2024, Uber (NYSE:UBER) grew its gross bookings by 21% year-over-year and reported a 14% increase in audience. Innovation is crucial to the success of Uber. Last year the company partnered with Waymo, to bring autonomous driving technology to UBER. Waymo provides autonomous vehicles to Uber for ride-hailing services.
While Uber’s (NYSE:UBER) management thinks autonomous vehicle (AV) technology holds promise, they believe the transition would be rather gradual and human drivers will co-exist with autonomous vehicles for a long time. To strengthen its position on autonomous driving, the company recently extended its partnership with Waymo to offer ride-hailing services to Atlanta and Austin by early 2025.
Despite the uncertainty in the autonomous driving industry, Uber is expected to benefit tremendously from the AI wave. Analysts are bullish on the stock, and their 1-year median price target of $90 points to a 19% upside from current levels. At the close of Q2 2024, 145 hedge funds were bullish on Uber Technologies, Inc. (NYSE:UBER), with total stakes amounting to $8.7 billion.
