In this article, we discuss the 10 tech stocks to buy according to former VP Al Gore. You can skip our detailed analysis of Al Gore’s hedge fund and recent developments, and go directly to read 5 Tech Stocks to Buy According to Former VP Al Gore.
Former Vice President of the US Al Gore’s Generation Investment Management invests heavily in tech companies, especially those that incorporate the problem of climate in their operations and long-term strategy. Al Gore is currently serving as the chairman of Generation Investment Management, which he founded in 2004 along with David Blood.
Following his strategy of sustainable investing, Al Gore started ‘Just Climate’, a fund that would launch certain projects to decarbonize the economy. The fund is backed by some prominent investors, such as Goldman Sachs, Harvard Management Co., and Microsoft’s Climate Innovation Fund.
As of Q3, Generation Investment Management’s 13F portfolio holds a value of over $24 billion. In this article, we will focus on the tech stocks in Al Gore’s portfolio. Some of them are Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology:
In this article, we will discuss technology stocks in Al Gore’s 13F portfolio as of Q3. For this list, we took data from Generation Investment Management’s Q3 portfolio. The stocks are ranked according to their position in the portfolio.
Tech Stocks to Buy According to Former VP Al Gore
10. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 43
Generation Investment Management’s Stake Value: $291,967,000
Synopsys, Inc. (NASDAQ:SNPS) is an American technology company that specializes in chip design, software security, and IP integration. On December 2, the stock jumped 6.6%, as the company reported solid earnings in fiscal Q4. Synopsys, Inc. (NASDAQ:SNPS) experienced an 11.7% year-over-year growth in its revenue, while the company beat EPS estimates by $0.03 at $1.82.
As of Q3 2021, 43 hedge funds in Insider Monkey’s database reported owning stakes in Synopsys, Inc. (NASDAQ:SNPS), up from 41 in the previous quarter. The total value of these stakes is over $2.34 billion. Among these hedge funds, Alkeon Capital Management was the company’s leading shareholder in Q3, holding a $1 billion worth of stake.
Generation Investment Management holds 975,141 shares in Synopsys, Inc. (NASDAQ:SNPS) in Q3, worth roughly $292 million. The company represented 1.21% of Al Gore’s portfolio. Recently, DA Davidson and Wells Fargo raised their price targets on Synopsys, Inc. (NASDAQ:SNPS) to $400 and $415, respectively.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT), Synopsys, Inc. (NASDAQ:SNPS) is also one of the notable tech stocks in Al Gore’s portfolio.
Harding Loevner mentioned Synopsys, Inc. (NASDAQ:SNPS) in its Q3 2021 investor letter. Here is what the firm has to say:
“To keep innovating, foundries like those operated by TSMC and Samsung rely on capital equipment made by ASML, a Dutch company that enjoys a near-monopoly in lithography, a specialized process that allows for an increase in the density of transistors and their connections on each silicon wafer. The chips, in addition to getting denser, are also getting architecturally more complex, which presents a challenge for both chip designer and fabricator alike. Computer-aided design (CAD) software from US-based Synopsys not only allows circuits to be modelled down to their most microscopic elements but also offers the capability to verify their functionality and ease of manufacturing and to optimize the performance all virtually before the design is completed.”
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Generation Investment Management’s Stake Value: $296,001,000
As Microsoft Corporation (NASDAQ:MSFT) showed growth in cloud computing, the company aims to explore data management in 2022 as it holds a 28% share of the global market. Recently, Morgan Stanley lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $364, with an Overweight rating on the shares, appreciating the contribution of data management in the company’s gross revenue.
Generation Investment Management started investing in Microsoft Corporation (NASDAQ:MSFT) during the second quarter of 2014. In Q3 2021, the company accounted for 1.23% of former VP Al Gore’s portfolio. Since the start of 2021, the stock is up 48.7%, while its 12-month returns stood at 45.4%, as of the close of December 20.
The number of hedge funds tracked by Insider Monkey having stakes in Microsoft Corporation (NASDAQ:MSFT) grew to 250 in Q3, from 238 in the preceding quarter. These stakes hold a consolidated value of $65.8 billion, up from $62.4 billion.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter. Here is what the asset management firm has to say:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue beating Street estimates by 4.5%, an acceleration in Commercial Cloud revenue to 31% constant-currency growth, a four-point improvement in Commercial Cloud gross margins (to 70% from 66%), and GAAP earnings up 42%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by TAM expansion across its disruptive cloud product portfolio, as more companies look to transform and digitize their businesses, as well as strong operating leverage as its cloud products gain scale.”
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 66
Generation Investment Management’s Stake Value: $660,262,000
Generation Investment Management increased its stake in Intel Corporation (NASDAQ:INTC) by 76% in Q3 2021. The company accounted for 2.74% of Al Gore’s portfolio. According to analysts, Intel Corporation (NASDAQ:INTC) is well-positioned to grow as annual semiconductor sales are expected to reach $600 billion in 2022.
At the end of Q3 2021, 66 hedge funds tracked by Insider Monkey reported owning stakes in Intel Corporation (NASDAQ:INTC), down from 78 in the previous quarter. These stakes are valued at over $6.4 billion. Ken Fisher’s Fisher Asset Management was the company’s largest shareholder in Q3, with a stake worth $1.7 billion.
Recently, JPMorgan set a $64 price target on Intel Corporation (NASDAQ:INTC), which represents a 23.8% upside. In its Q3 earnings, the company posted an EPS of $1.71, beating estimates by $0.60.
Andaz Private Investments mentioned Intel Corporation (NASDAQ:INTC) in its Q3 2021 investor letter. Here is what the firm has to say:
“Intel (INTC) is trading on a high single digit earnings multiple and is essentially: 1) an oligopolistic foundry set to benefit from large government incentives; and 2) a semiconductor business that is returning to competitiveness after years of being a laggard.”
7. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Generation Investment Management’s Stake Value: $723,636,000
Alibaba Group Holding Limited (NYSE:BABA) saw a decline in the number of hedge funds having stakes in it. In Q3, 115 hedge funds tracked by Insider Monkey held stakes in the company, down significantly from 146 in the preceding quarter. These stakes hold a value of over $10.2 billion.
Generation Investment Management started building its position in Alibaba Group Holding Limited (NYSE:BABA) during the fourth quarter of 2020, with shares worth roughly $360 million. In Q3 2021, the hedge fund holds a stake worth $723.6 million in the company, which accounted for 3% of Al Gore’s portfolio. Recently, Morgan Stanley noted that Alibaba Group Holding Limited (NYSE:BABA) has the potential to drive average revenue per user due to the diversification in its supplies and products. The firm lifted its price target on the stock to $180, while maintaining an Overweight rating on the shares.
In fiscal Q2 2021, Alibaba Group Holding Limited (NYSE:BABA) experienced a 29% year-over-year growth in revenue at $31.1 billion. Moreover, the company’s annual active customers were recorded at 1.24 billion, presenting an increase of 62 million customers from the prior-year quarter.
Palm Capital mentioned Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Over the past few months, political and regulatory turmoil has caused sharp collapses in the share prices of certain Chinese companies and clients have been increasingly asking us why we don’t invest in the country.
When we’ve answered this question in the past, we’ve found it useful to use the example of Alibaba. On face value, Alibaba appears to be a phenomenal business. It is the world’s largest e-commerce company in the world’s fastest-growing major economy. The marketplaces it operates are the most highly visited in China pointing to seemingly unassailable network effect advantages. These are solidified by its substantial investments and partnerships in an unrivalled logistics network. The company also has a crucial early mover advantage in cloud computing giving it a scale advantage that may quickly take it out of reach of competitors. And relative to its growth, the share often appears to be cheap.
However, if you dig beneath the surface, the investment case becomes less clear.
Alibaba’s accounting is questionable and murky, and its disclosure is poor. The company’s corporate structure is an intricate web of over 1,200 separate entities. And a staggering 890 of these entities were formed or acquired in the three years ending 2020. A large portion of its revenue growth each year is from consolidation of acquisitions with little disclosure of just how much. Significant entities appear and disappear from the company’s disclosures from year to year with no explanation. And almost three-quarters of the company’s total retained earnings since its 2014 IPO is from asset write ups with little explanation to back these up.”
6. Nutanix, Inc. (NASDAQ:NTNX)
Number of Hedge Fund Holders: 28
Generation Investment Management’s Stake Value: $731,210,000
Nutanix, Inc. (NASDAQ:NTNX) is an American cloud computing company that also provides software services. In Q3, Generation Investment Management increased its stake in the company by 4% and now holds shares worth over $731.2 million. Nutanix, Inc. (NASDAQ:NTNX) accounted for 3.03% of former VP Al Gore’s portfolio.
Over the last two years, Nutanix, Inc. (NASDAQ:NTNX) has beaten EPS estimates 100% of the time. In fiscal Q1 2022, following its previous trend, the company beat EPS consensus by $0.12 at -$0.22. According to Susquehanna, Nutanix, Inc. (NASDAQ:NTNX) is expected to deliver $1 billion in annual recurring revenue in the coming years. The firm lifted its price target on the stock to $50, with a Positive rating on the shares.
At the end of Q3 2021, 28 hedge funds in Insider Monkey’s database reported owning stakes in Nutanix, Inc. (NASDAQ:NTNX), down from 29 in the previous quarter. The total value of these stakes is over $1.2 billion.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT), investors and analysts are also paying attention to Nutanix, Inc. (NASDAQ:NTNX) in 2021.
Andaz Private Investments mentioned Nutanix, Inc. (NASDAQ:NTNX) in its Q2 2021 investor letter. Here is what the firm has to say:
“We increased Nutanix (NTNX) from a c.11% weight to the maximum 15% weight purchasing at $27.46 and $26.72 on May 5 and 6 respectively… We invested into several tech situations which were discarded by the market in May on inflation concerns.”
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Disclosure. None. 10 Tech Stocks to Buy According to Former VP Al Gore is originally published on Insider Monkey.
