In this article, we discuss 10 tech to buy according to billionaire Philippe Laffont. If you want to skip our detailed analysis of these stocks, go directly to 5 Tech Stocks to Buy According to Billionaire Philippe Laffont.
Philippe Laffont is the founder and portfolio manager of Coatue Management, which is a privately held investment management firm based in New York. In the third quarter, Coatue Management had a portfolio worth $24.5 billion, with 33.11% of the investments focused in the technology sector, which represents Philippe Laffont’s keen interest in technology-themed investing.
After graduating from Massachusetts Institute of Technology in 1991, Laffont joined McKinsey & Company in 1992 as an analyst. He joined Julian Robertson’s Tiger Management in 1996, where he specialized in telecommunications stocks. He is one of the Tiger Cubs who started successful hedge funds, with $45 million in start up capital.
It was revealed in a December 17 story that Philippe Laffont’s Coatue Management was one of the main investors in the Series B $150 million funding of Airbyte, a private company focused on one of the fastest-growing open source data integration platforms. The investment is in line with Laffont’s technology-focused hedge fund, and the fund’s representatives said that they were very impressed by the quality of Airbyte’s team and developer traction.
The hedge fund also led a funding round for Rec Room, a Seattle-based company which allows users to create customizable and interactive gaming rooms, benefiting from the pandemic-fueled rise in digital entertainment. Rec Room’s valuation jumped to $3.5 billion after raising $145 million in the funding series, as per the reports on December 20.
Philippe Laffont, aged 54, has a personal net worth of $6.5 billion, and in the third quarter of 2021, the most notable stocks from the billionaire’s portfolio include The Walt Disney Company (NYSE:DIS), Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX).
Philippe Laffont of Coatue Management
Our Methodology
We used the Q3 portfolio of Philippe Laffont to select the billionaire’s top 10 tech stocks. We have ranked the stocks according to Laffont’s stake value in each holding.
Tech Stocks to Buy According to Billionaire Philippe Laffont
10. UiPath Inc. (NYSE:PATH)
Coatue Management’s Stake Value: $596,196,000
Percentage of Coatue Management’s 13F Portfolio: 2.42%
Number of Hedge Fund Holders: 27
UiPath Inc. (NYSE:PATH), a global software company focused on robotic process automation, is one of the best tech stocks to buy according to billionaire Philippe Laffont. Coatue Management owns 11.33 million shares of UiPath Inc. (NYSE:PATH) as of Q3 2021, worth $596.1 million, representing 2.42% of the firm’s total investments.
UiPath Inc. (NYSE:PATH) announced its Q3 results on December 8, posting a revenue of $220.82 million, beating estimates by $11.59 million.
BMO Capital analyst Keith Bachman on December 15 lowered the price target on UiPath Inc. (NYSE:PATH) to $52 from $57 and kept a Market Perform rating on the shares. The analyst stated that he is concerned about the valuations in the growth software portion of the market, inflation, and interest rates.
Cathie Wood’s ARK Investment Management is the largest stakeholder of UiPath Inc. (NYSE:PATH), increasing its stake in the company by 102% in the third quarter. Cathie Wood purchased 303,700 shares in UiPath Inc. (NYSE:PATH) on December 13, which increased her total position in the company to 23.93 million shares worth $1.25 billion. Overall, 27 hedge funds were bullish on UiPath Inc. (NYSE:PATH), according to the third quarter database maintained by Insider Monkey.
In addition to The Walt Disney Company (NYSE:DIS), Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX), UiPath Inc. (NYSE:PATH) is a notable stock from Philippe Laffont’s Q3 portfolio.
Here is what ClearBridge Investments has to say about UiPath Inc. (NYSE:PATH) in its Q2 2021 investor letter:
“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”
9. Marqeta, Inc. (NASDAQ:MQ)
Coatue Management’s Stake Value: $612,409,000
Percentage of Coatue Management’s 13F Portfolio: 2.49%
Number of Hedge Fund Holders: 20
Marqeta, Inc. (NASDAQ:MQ) is a fintech company that simplifies payments via prepaid cards, debit cards, and credit cards, managing its digital payment solutions via an open API modern card issuing platform. Philippe Laffont owns 28.4 million shares of Marqeta, Inc. (NASDAQ:MQ), worth $612.4 million, representing 2.49% of the billionaire’s Q3 portfolio. Laffont increased his position in Marqeta, Inc. (NASDAQ:MQ) by 847% in Q3 2021.
In the third quarter earnings report, published on November 10, Marqeta, Inc. (NASDAQ:MQ) posted a loss per share of $0.08, beating estimates by $0.05. The $131.51 million revenue outperformed estimates by $12.29 million.
On November 15, Mizuho analyst Dan Dolev raised the price target on Marqeta, Inc. (NASDAQ:MQ) to $27 from $25 and kept a Neutral rating on the shares.
One of the leading stakeholders of Marqeta, Inc. (NASDAQ:MQ) is Echo Street Capital Management, increasing its stake in the company by 33% in the third quarter, holding 4.41 million shares worth $97.6 million. Overall, 20 hedge funds were bullish on Marqeta, Inc. (NASDAQ:MQ) in Q3, down from 35 funds in the preceding quarter.
Here is what Artisan Mid-Cap Fund has to say about Marqeta, Inc. (NASDAQ:MQ) in its Q3 2021 investor letter:
“Marqeta is a digital payment software company with a focus on providing fintechs and merchants the infrastructure to build and process configurable payment cards. The company’s superior API technology allows it to easily connect to customers’ internal systems, enabling quicker product development and introduction. Marqeta’s growth over the years has been largely attributed to its partnership with Square’s Cash App—more than 70% of revenues—but we believe recent client wins (Google Pay) and the continued emergence of innovative digital payment services who need Marqeta’s technology infrastructure make for a compelling profit cycle ahead. With shares pulling back during the quarter, we initiated a small GardenSM position.”
8. Sea Limited (NYSE:SE)
Coatue Management’s Stake Value: $702,579,000
Percentage of Coatue Management’s 13F Portfolio: 2.85%
Number of Hedge Fund Holders: 117
Billionaire Philippe Laffont holds 2.2 million shares of Sea Limited (NYSE:SE), worth $702.5 million, representing 2.85% of his total Q3 investments.
In the third quarter, 117 hedge funds were long Sea Limited (NYSE:SE), according to the database of 867 elite funds monitored by Insider Monkey. This is an increase as compared to 104 funds being bullish on the stock in the prior quarter. The largest Sea Limited (NYSE:SE) stakeholder as of Q3 2021 is Tiger Global Management, with 10.41 million shares worth $3.31 billion.
On November 16, Sea Limited (NYSE:SE) posted its Q3 earnings, announcing a loss per share of $0.84, missing estimates by $0.23. The quarterly revenue jumped 121.83% to $2.69 billion, outperforming estimates by $209.27 million.
CLSA analyst Neel Sinha upgraded Sea Limited (NYSE:SE) to Buy from Outperform with a price target of $455, up from $352, as the analyst rolled forward valuations following the company’s Q3 report. Sinha said that the potential from new markets and growth in existing markets makes Sea Limited (NYSE:SE) “look attractive for the next few years.”
Here is what Tao Value has to say about Sea Limited (NYSE:SE) in its Q2 2021 investor letter:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in the established ASEAN & LatAm market and received positive reception from new markets like the US. On the ecommerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now the top downloaded ecommerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
7. Amazon.com, Inc. (NASDAQ:AMZN)
Coatue Management’s Stake Value: $708,429,000
Percentage of Coatue Management’s 13F Portfolio: 2.88%
Number of Hedge Fund Holders: 242
Amazon.com, Inc. (NASDAQ:AMZN) makes up 2.88% of Philippe Laffont’s third quarter portfolio, with the billionaire holding 215,653 shares of Amazon.com, Inc. (NASDAQ:AMZN), worth $708.4 million.
Forecasting accelerated growth of Amazon.com, Inc. (NASDAQ:AMZN)’s AWS and e-commerce segments, Cowen analyst John Blackledge on December 13 raised the price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4,500 from $4,300 and kept an Outperform rating on the shares, calling it his best idea for 2022 and a top mega-cap stock pick.
Of the 242 hedge funds that were long Amazon.com, Inc. (NASDAQ:AMZN) in Q3 2021, Fisher Asset Management is one of the leading stakeholders of the company, with 1.93 million shares worth $6.34 billion.
Here is what Davis Opportunity Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter:
“E-commerce, online search and advertising, social media and software are another component of the portfolio that have proven, attractive businesses. The online portion of the Fund is currently dominated by such market leaders as Amazon.com. We are attracted to these names based on the size and rapid expansion of their market opportunities globally, their ability to generate and grow new revenue sources through constant innovation, ample operating leverage as they continue to scale and capable, focused, highly competitive leadership teams. If purchased at sensible prices, these types of businesses in our experience can contribute meaningfully to long-term results.”
6. Block, Inc. (NYSE:SQ)
Coatue Management’s Stake Value: $749,325,000
Percentage of Coatue Management’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 98
Block, Inc. (NYSE:SQ) is a California-based financial services and digital payments company that was previously traded as Square, Inc. The company offers point of sale terminals, auxiliary equipment, and debit cards to small, mid-cap, and enterprise level businesses.
Philippe Laffont, via Coatue Management, owns 3.12 million shares of Block, Inc. (NYSE:SQ) as of the third quarter, worth $749.32 million, accounting for 3.04% of the firm’s total Q3 investments.
Wedbush analyst Moshe Katri on December 20 lowered the price target on Block, Inc. (NYSE:SQ) to $190 from $250 and kept a Neutral rating on the shares. The analyst observed continued indications of choppy consumer spending given inflationary pricing pressure on staple goods.
98 hedge funds in the Q3 database of Insider Monkey were long Block, Inc. (NYSE:SQ), with total stakes amounting to $8.88 billion. One of the largest Block, Inc. (NYSE:SQ) stakeholders as of Q3 2021 is Stephen Mandel’s Lone Pine Capital, with 5.38 million shares worth $1.29 billion.
In addition to The Walt Disney Company (NYSE:DIS), Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Netflix, Inc. (NASDAQ:NFLX), Block, Inc. (NYSE:SQ) is a notable stock from Philippe Laffont’s Q3 portfolio.
Here is what RiverPark Large Growth Fund has to say about Block, Inc. (NYSE:SQ) in their Q1 2021 investor letter:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
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Disclosure: None. 10 Tech Stocks to Buy According to Billionaire Philippe Laffont is originally published on Insider Monkey.
