In this article we presented the 10 best tech stocks to buy according to billionaire Ken Griffin. You can skip our detailed analysis of Griffin’s investment strategy and his history to read 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin.
Technology stocks are back into business, thanks to a decline in bond yields and an increasing investor confidence in growth stocks. Major tech stocks including Amazon, Apple, Microsoft and Alphabet have gained value so far in April after getting clobbered in March. The tech-heavy NASDAQ composite index has gained 7% year to date. The dramatic rise of tech stocks over the past few years is deeply rooted in the products and services tech companies are offering. The pandemic highlighted this fact. Tech companies, SaaS startups, Cloud and gaming companies are literally changing the lives of billions of people all over the world. According to legendary investor Peter Thiel, the biggest advantage software companies have is the ability to operate with negligible costs and still enjoy explosive margins. For example, when Facebook bought Instagram for a whopping $1 billion, the photo-sharing social service had just 13 employees, and 30 million users. Companies like Shopify, Uber Eats, Cloudflare, Salesforce, Twilio, Adobe empower millions of people with their platforms that solve some key problems or enable people to carry out some essential tasks or operations.
Ken Griffin of Citadel Investment Group
According to a 2018 report by Jefferies, technology has accounted for about 50% of market growth in the past two years. NASDAQ delivered a 45% return in 2020, as the world saw a flurry of tech IPOs in the midst of the coronavirus pandemic.
In this article we are going to list the 10 best stocks to buy now according to billionaire Ken Griffin. Griffin, who founded Citadel Investment Group in 1990, is a stock-picking genius. When the entire hedge fund industry was wavering, Citadel’s flagship Wellington fund gained 24.4% in 2020, its best performance in 8 years. Griffin’s global fixed income fund was up 17.5% in the same period.
That’s why Griffin’s tech picks are worth a look, especially for those who want to invest in growth and tech stocks. Why? Because 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.
Let’s start our list of Ken Griffin’s top 10 tech stock picks.
10. Visa Inc. (NYSE: V)
Value: $460,647,000
Percent of Ken Griffin’s 13F Portfolio: 0.12%
No. of Hedge Fund Holders: 166
Visa is one of the best tech stocks to buy according to billionaire Ken Griffin. The stock is currently under pressure after reports suggested that the Justice Department was investigating Visa over its alleged deal with banks for incentives in exchange for more business. The stock is up 27% over the last 12 months. Last month, Truist analyst Andrew Jeffrey advised investors to “aggressively” pile into Visa stock and said that the latest investigation would have a negligible impact on the company.
As of the end of the fourth quarter, there were 166 hedge funds in Insider Monkey’s database that held stakes in Visa Inc., compared to 160 funds in the third quarter. Ken Fisher’s Fisher Asset Management, with 22.2 million shares of Visa, is the biggest stakeholder in the company. Based on our calculations, Visa Inc. ranks 5th in our list of the 30 Most Popular Stocks Among Hedge Funds.
In their Q4 2020 investor letter, Bretton Fund spoke about Visa Inc. (NYSE:V) and Mastercard Inc (NYSE:MA) stocks. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
9. Activision Blizzard, Inc. (NASDAQ: ATVI)
Value: $461,037,000
Percent of Ken Griffin’s 13F Portfolio: 0.12%
No. of Hedge Fund Holders: 81
Gaming giant Activision Blizzard, the creator of various famous games including Call of Duty Mobile (over 300 million downloads as of October 2020) is one of the best tech stocks to buy according to Citadel’s Ken Griffin. The company recently appointed a new CFO and said that it was on track to beat its Q1 outlook. Berenberg recently reiterated a Buy rating for the stock and set a $105 price target. The firm likes the stock amid lockdown-infused momentum and new content.
A total of 81 hedge funds tracked by Insider Monkey were bullish ATVI at the end of the fourth quarter, down from 93 funds a quarter earlier.
8. Adobe Inc. (NASDAQ: ADBE)
Value: $469,890,000
Percent of Ken Griffin’s 13F Portfolio: 0.12%
No. of Hedge Fund Holders: 114
Adobe ranks 8th in the list of billionaire Ken Griffin’s favorite tech stocks list. In fiscal first quarter, Adobe’s revenue shot up 27% and crushed the Wall Street estimates. Digital sales jumped 32% on a year-over-year basis. For the second quarter, the company expects its revenue to come in at $3.72 billion, compared the consensus of $3.7 billion. EPS in the period is expected to total $2.81, versus the consensus of $2.70.
Fisher Asset Management is one of the 114 hedge funds tracked by Insider Monkey having stakes in Adobe Inc. at the end of the fourth quarter. The fund owns over 5.8 million shares of the company. Based on our calculations, Adobe Inc. ranks 16th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Polen Focus Growth, in their Q4 investor letter, said that Adobe Inc. (NASDAQ: ADBE) was one of the top contributors for the fund during the fourth quarter of 2020. Here is what Polen Focus Growth has to say about Adobe Inc. in their investor letter:
“For the full year 2020, one of the top performers was Adobe, which we have owned for many years, continues to benefit from being the gold standards of software in its respective areas, and the current environment has only served to accelerate customer demand and need for their products and services.”
7. Apple Inc. (NASDAQ: AAPL)
Value: $483,958,000
Percent of Ken Griffin’s 13F Portfolio: 0.13%
No. of Hedge Fund Holders: 146
Apple is one of the best tech stocks to buy according to billionaire Ken Griffin. Apple’s aggressive diversification of its revenue stream amid declining iPhone sales a few years back is now paying off. The stock has gained over 90% in the last 12 months. UBS recently recommended investors to take a “bite” of Apple and upped its rating to Buy from Neutral, also increasing its price target to $142 from $115. The firm’s analyst David Vogt sees a stable long-term outlook for iPhones and also likes Apple’s foray into the automobiles market. Vogt thinks Apple Car is not reflected in the current stock price of Apple. Vogt also increased his 2021 iPhone shipment estimate by 5 million to 220 million on the back of rising 5G phones demand in China.
Warren Buffett’s Berkshire Hathaway currently owns 887.1 million shares of Apple Inc., worth $117.7 billion. AAPL occupies 43.6% of Berkshire Hathaway’s overall equity. Based on our calculations, Apple Inc. ranks 10th in our list of the 30 Most Popular Stocks Among Hedge Funds.
In their Q4 2020 investor letter, Sextant Growth Fund mentioned Apple Inc. (NASDAQ: AAPL). Here is what Sextant Growth Fund has to say about Apple Inc. in their Q4 2020 investor letter:
“Technology claimed six of the 10 Largest Contributors for 2020, demonstrating the effect of the pandemic, remote work, and the acceleration of various Technology and Consumer trends. Apple followed closely behind. More than once we have read Apple obituaries, but we believe the company’s combination of hardware and services will continue to drive the business for years to come, and we look forward to improved availability for the iPhone 12 Pro.”
6. Analog Devices, Inc. (NASDAQ: ADI)
Value: $494,605,000
Percent of Ken Griffin’s 13F Portfolio: 0.13%
No. of Hedge Fund Holders: 58
Ranking 6th in the list of the best tech stocks to buy according to billionaire Ken Griffin of Citadel is Analog Devices. It’s a semiconductor company that makes analog, mixed-signal and digital signal processing (DSP) integrated circuits (ICs) used in electrical equipment. BofA recently named the stock in its list of companies that are set to gain from President Biden’s $2 trillion infrastructure plan. The firm likes Analog Devices because of its dominance in the 5G equipment market.
The company is also getting the attention of the smart money, as 58 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the fourth quarter, up from 52 funds a quarter earlier.
Weitz Investment Management, in their Q4 2020 investor letter, mentioned Analog Devices, Inc. (NASDAQ: ADI). Here is what Weitz Investment Management has to say about Analog Devices, Inc. in their Q4 2020 investor letter:
“Analog Devices benefited from several global, long-wave trends such as automation, electric vehicles and the 5G network build-out. The company’s quarterly sales into the auto, industrial and communications sectors exceeded expectations, giving the stock a lift.”
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Disclosure: None. 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin is originally published on Insider Monkey.
