In this article, we will take a look at the 10 best tech stocks to buy according to billionaire Julian Robertson. You can skip our detailed analysis of Robertson’s history, investment philosophy, and hedge fund performance, and go directly to 5 Best Tech Stocks to Buy According to Billionaire Julian Robertson.
Julian Robertson is an American billionaire, hedge fund manager and philanthropist who founded Tiger Management in 1980 with $8 million as start-up capital. Robertson turned this amount into more than $22 billion in the late 1990s. Between 1980 and 1998, Robertson returned 31.7% annually, beating S&P 500’s 12.7% annual return. However, this success was followed by a financial slump because of investor withdrawals and Robertson’s performance also dropped, making his overall returns plunge to 26%. Tiger Management eventually closed in 2000 for outside money. The fund operates in direct public equity investments and seeding new investment funds.
Robertson’s own success continued years down the lane, and the man now has a net worth of $4.5 billion. In 2008, Robertson commented that one of his strategies involved shorting subprime securities and making money through credit default swaps. In 2009, Forbes estimated his returns on a $200 million personal trading account to be 150%. His investment philosophy can be understood as being a “long-short” strategy. According to Robertson himself, their “mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them.”
It was estimated last year that 50% of Robertson’s investments in 2020 were in the technology sector, and as of Q1’21, 13F Holdings for Tiger Management show that some of the top tech stocks Robertson has a stake in are Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB) and Alphabet Inc. (NASDAQ: GOOG). All three of these are big names in the tech industry and have showcased continued growth over the years, as we will describe in the list below. There are multiple other tech stocks apart from Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and Alphabet Inc. (NASDAQ: GOOG) as well, showing that Robertson has quite the affinity for the tech industry. Hence we have compiled this list of the best tech stocks to buy according to billionaire Julian Robertson.
Robertson is an exception in an industry reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
The stocks included in this list are all successful companies in the tech industry and were selected from Robertson’s portfolio based on their performance in the past 6 months and year to date, alongside their forward PE ratios and Robertson’s stake value in the company. The stocks mentioned are ranked on the basis of Robertson’s stake value and the percentage they take up of his 13F portfolio.
Let’s now discuss the 10 best tech stocks to buy according to billionaire Julian Robertson.
Best Tech Stocks to Buy According to Billionaire Julian Robertson
10. Amazon.com, Inc. (NASDAQ: AMZN)
Robertson’s Stake Value: $2,738,000
Percentage of Julian Robertson’s 13F Portfolio: 0.53%
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ: AMZN) is an American multinational technology and e-commerce company focusing on cloud computing, digital streaming, and artificial intelligence. The company is one of the “Big Five” in the US information technology industry alongside Alphabet, Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), Microsoft Corporation, (NASDAQ: MSFT), and Facebook, Inc. (NASDAQ: FB). The company ranks 10th on our list of the best tech stocks to buy according to billionaire Julian Robertson.
On June 11th, Amazon Prime Day’s forecasted sales record was revealed to be $12 billion, crossing last year’s sales record of $10 billion. Estimates from Digital Commerce 360 showed $10.4 billion in sales in 2020, up 45.2% from the $7.16 billion figure in 2019, and now Amazon.com, Inc, (NASDAQ: AMZN) expects Q2 revenue of $110 billion to $116 billion because of increased sales this year.
First-quarter earnings for the company were $8.11 billion and revenue was $108.52 billion. Amazon.com, Inc, (NASDAQ: AMZN) also beat EPS estimates by $6.25 this quarter with an EPS of $15.79 versus the $9.54 estimate. This is an increase from Q420 EPS of $14.09. The stock also gained 6.91% in the past 6 months and 6.19% year to date.
By the end of the first quarter for this year, 243 hedge fund holders out of 886 tracked by Insider Monkey held stakes in the company worth over $50.4 billion, down from Q420 numbers of 273 hedge fund holders having stakes worth over $51.5 billion. Tiger Management holds 885 shares in Amazon.com, Inc, (NASDAQ: AMZN) valued at $2.5 million.
9. Elastic N.V. (NYSE: ESTC)
Robertson’s Stake Value: $3,225,000
Percentage of Julian Robertson’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 52
Elastic N.V. (NYSE: ESTC) is a technology company delivering tech products enabling its consumers to search through unstructured and structured data for various consumer and enterprise applications. The company’s main product is Elastic Stack, and it ranks 9th on our list of the best tech stock picks according to Robertson.
In their first quarter for 2021 report, Elastic N.V. (NYSE: ESTC) announced that its non-GAAP EPS stood at $0.06, and its revenue stood at $128.9 million, showcasing a 44% increased year-over-year. Operating cash flow for the quarter was $22 million, and free cash flow valued at $21.6 million. The stock lost 6.14% in the past 6 months and 4.79% year to date.
Regardless of the above, in the first quarter of this year, 52 hedge funds held stakes in Elastic N.V. (NYSE: ESTC) worth over $1.88 billion. While the number of hedge fund holders has increased from Q420 numbers of 49, the stake value has decreased from the $2.22 billion value in the last quarter. Tiger Management holds 29,000 shares in Elastic N.V. (NYSE: ESTC) worth over $3.2 million. Like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and Alphabet Inc. (NASDAQ: GOOG), Elastic N.V. (NYSE: ESTC) is a tech stock worth investing in.
Carillon Tower Advisers, in their Q1 2021 investor letter, mentioned Elastic N.V. (NYSE: ESTC). Here is what the fund said:
“Elastic is a software provider of enterprise search and data analytics technology. Like many other firms in the technology sector, the firm’s shares underperformed in the first quarter as investors slightly lowered the exposure to higher growth companies. Despite this, Elastic was still able to deliver earnings results and guidance that came in above expectations, and its fundamentals remain solid in our view.”
8. Sea Limited (NYSE: SE)
Robertson’s Stake Value: $3,572,000
Percentage of Julian Robertson’s 13F Portfolio: 0.7%
Number of Hedge Fund Holders: 98
Sea Limited (NYSE: SE) is a software technology company that works on digital entertainment, e-commerce, and digital financial services internationally. The company offers digital financial services brands like AirPay and ShopeePay and ranks 8th on our list of billionaire Julian Robertson’s top tech stock picks.
On June 10th, Sea Limited (NYSE: SE) was upgraded at BofA because of Shopee’s growth exceeding expectations. The stock now has a Buy rating with a price target of $340, an increase from the previous $260. The company also beat revenue estimates for the first quarter by $20 million with its $1.8 billion revenue for the quarter demonstrating a 146.6% growth year-over-year. However, it was unable to beat EPS estimates and missed by $0.07 with its GAAP EPS of -$0.62. Sea Limited (NYSE: SE) gained 47.31% in the past 6 months and 41.32% year to date.
In Q1, 98 hedge funds held stakes in Sea Limited (NYSE: SE) worth over $10.4 billion, down from Q420 numbers of 115 hedge fund holders with a $10.8 billion stake in the company. Tiger Management holds 16,000 shares in Sea Limited (NYSE: SE) worth over $3.5 million. Like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB), and Alphabet Inc. (NASDAQ: GOOG), Sea Limited (NYSE: SE) is a tech stock worth investing in.
ClearBridge Investments, highlighted a few stocks in its Q1 2021 investor letter, and Sea Ltd (NYSE: SE) is one of them. Here is what the fund said:
“Singapore-based Sea maintains leading positions in Southeast Asia in video games and e-commerce and operates an emerging digital payments and banking business. While the company is investing heavily into e-commerce and payments, this growth is being funded by its highly profitable gaming segment. We see a long runway for growth across Sea’s businesses with multiple opportunities like e-commerce expansion in Latin America not fully factored into the valuation today. The company also has a well-respected management team that has successfully executed in expanding its total addressable market. Along with existing holding Alibaba, Sea provides exposure to secular growth trends in emerging markets that are harder to replicate through U.S. stocks.”
7. SVMK Inc. (NASDAQ: SVMK) [Now Momentive]
Robertson’s Stake Value: $4,375,000
Percentage of Julian Robertson’s 13F Portfolio: 0.86%
Number of Hedge Fund Holders: 32
SVMK Inc. (NASDAQ: SVMK) is a technology and software company providing software solutions to help companies turn stakeholder feedback into action. The company operates in the US and internationally, and offers survey software products like the GetFeedback CX platform. The company ranks 7th on our list of billionaire Julian Robertson’s top tech stock picks.
In June 2021, the company announced that it was renaming itself ‘Momentive’. In the first quarter of 2021, SVMK Inc. (NASDAQ: SVMK) reported a $102.3 million revenue, beating its $100.97 million revenue from Q420. As for the EPS estimates for this quarter, the company met them at $0.02. However, SVMK Inc. (NASDAQ: SVMK) has lost 10.99% in the past 6 months and 16.78% year to date. Yet this May, it was upgraded by Wells Fargo from Equal Weight to Overweight and the price target was also raised by $4 to $25, a 30% upside.
In the first quarter, 32 hedge fund holders held stakes in SVMK Inc. (NASDAQ: SVMK) worth $204 million, down from the Q420 stake value of $325 million, although the number of hedge fund holders remained the same. Tiger management holds 238,837 shares in the company worth over $4.37 million.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned SVMK Inc. (NASDAQ: SVMK). Here is what ClearBridge Investments has to say about SVMK Inc. in its letter:
“We established seven new positions during the quarter (including SVMK), largely financed through trims in existing holdings whose market values have risen. Four of the additions play roles in the accelerating digital transformation of the sales, marketing and customer development processes. SVMK, in the IT sector and formerly known as SurveyMonkey, provides survey software tools for clients and employees. Surveys have become ever more important in customer retention/success for enterprises.”
6. Uber Technologies, Inc. (NYSE: UBER)
Robertson’s Stake Value: $6,829,000
Percentage of Julian Robertson’s 13F Portfolio: 1.34%
Number of Hedge Fund Holders: 130
Uber Technologies, Inc. (NYSE: UBER) is a software and technology company developing proprietary technology applications in many countries including the US and Canada. The company’s products connect consumers with independent providers of services such as transportation or riders and restaurants for deliveries. Uber Technologies, Inc. (NYSE: UBER) ranks 6th on our list of the best tech stocks to buy according to billionaire Julian Robertson.
Earlier in June, BofA reiterated a Buy rating for Uber Technologies, Inc. (NYSE: UBER) with a $71 price target. The company’s Q121 revenue was $2.9 billion and it beat EPS estimates for the quarter by $0.48 with its -$0.06 EPS value. However, Uber Technologies, Inc. (NYSE: UBER) has lost 0.45% in the past 6 months and 0.72% year to date.
In the first quarter of this year, 130 hedge funds still held stakes in Uber Technologies, Inc. (NYSE: UBER) worth over $10.5 billion, down from 135 the hedge fund holders in Q420, but up from the Q420 stake value of $10.09 billion. Tiger Management holds 125,276 shares in the company worth about $6.8 million. Like Microsoft Corporation (NASDAQ: MSFT), Facebook, Inc. (NASDAQ: FB) and Alphabet Inc. (NASDAQ: GOOG), Uber Technologies, Inc. (NYSE: UBER) is a tech stock worth investing in.
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Disclosure: None. 10 Best Tech Stocks to Buy According to Billionaire Julian Robertson is originally published on Insider Monkey.
