In this article, we discuss 10 tech stocks to buy according to Nathan Przybylo’s L2 Asset Management. If you want to skip our detailed analysis of these stocks, go directly to 5 Tech Stocks to Buy According to Nathan Przybylo’s L2 Asset Management.
Nathan Przybylo is the founder and managing partner at L2 Asset Management, having established the Massachusetts-based hedge fund in 2014. After graduating from Northwestern University with a bachelor’s in applied mathematics in 2005, Nathan Przybylo started his career as a senior analyst at Beghou Consulting, where he worked until 2008. He then enrolled in an MBA program at Cornell Johnson Graduate School of Management, completing his degree in 2010.
At L2 Asset Management, the third quarter portfolio is worth $39.5 million as of Q3 2021, with discretionary assets under management of approximately $178 million. The hedge fund invests primarily in the information technology, industrials, healthcare, finance, consumer staples, consumer discretionary, and communications sectors. 33.58% of the fund’s investments are concentrated in tech companies, which represents Nathan Przybylo’s immense interest in the technology sector.
The top buys of L2 Asset Management in Q3 2021 were The Kraft Heinz Company (NASDAQ:KHC) and VMware, Inc. (NYSE:VMW), whereas the fund reduced holdings in JPMorgan Chase & Co. (NYSE:JPM) and Sysco Corporation (NYSE:SYY).
The most notable stocks in L2 Asset Management’s Q3 portfolio included Best Buy Co., Inc. (NYSE:BBY), Altria Group, Inc. (NYSE:MO), and Alphabet Inc. (NASDAQ:GOOG).
Photo by Austin Distel on Unsplash
Our Methodology
We used the Q3 2021 portfolio of Nathan Przybylo’s L2 Asset Management for this analysis, selecting the fund’s top technology stocks for the period. We have ranked the securities according to the hedge fund’s stake value in each holding.
Tech Stocks to Buy According to Nathan Przybylo’s L2 Asset Management
10. Alphabet Inc. (NASDAQ:GOOG)
L2 Asset Management’s Stake Value: $519,000
Percentage of L2 Asset Management’s 13F Portfolio: 1.31%
Number of Hedge Fund Holders: 156
Alphabet Inc. (NASDAQ:GOOG), the parent company of Google and Google subsidiaries, is one of the most popular technology picks of elite hedge funds. According to Insider Monkey’s Q3 database, 156 funds were bullish on Alphabet Inc. (NASDAQ:GOOG), with stakes totaling approximately $35 billion. L2 Asset Management owns a $519,000 stake in Alphabet Inc. (NASDAQ:GOOG) as of the third quarter of 2021, which represents 1.31% of the fund’s Q3 securities.
Alphabet Inc. (NASDAQ:GOOG) shares surged in pre-market trading on February 2, as the tech giant posted Q4 results that beat Wall Street expectations. Alphabet Inc. (NASDAQ:GOOG) also announced a 20-for-1 stock split, in the form of a one-time special stock dividend on each of the company’s Class A, Class B and Class C stock. If the split is approved by Alphabet Inc. (NASDAQ:GOOG) stockholders, all shareholders as of July 1 will receive new company shares on July 15.
On February 2, Stifel analyst Scott Devitt raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,500 from $3,200 and kept a Buy rating on the shares.
Fisher Asset Management increased its Alphabet Inc. (NASDAQ:GOOG) stake by 6% in Q4 2021, holding 1.9 million shares of the company, worth $5.6 billion.
Here is what Giverny Capital Asset Management has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:
“It is simplistic but true that it’s easier to grow a $10 billion market cap to $30 billion than to grow a $30 billion market to $90 billion. We’re delighted to increase our exposure to midcap stocks, especially while gaining exposure to the growing network communications sector.
That said, since inception our largest position has been Alphabet. After a huge run in 2021, Alphabet’s market cap approaches $2 trillion. The core search business is a product most of us cannot do without and is well appreciated by the market. If there is a knock on Alphabet, it would be over capital allocation. The company spends $25 billion annually on research and development, some of it in far flung areas. R&D is not quite a black box, but it’s hard for investors to know how wisely Alphabet spends this budget.
However, quite a few of Alphabet’s investments have turned out brilliantly for shareholders: YouTube, Double Click and Android, to name three. Its Waymo division, which is developing self-driving cars, likely is worth tens of billions of dollars. We think Alphabet is at the forefront of research on machine learning and artificial intelligence. In November, a friend sent us two days of wire service items on Alphabet. It looked like this:…” (Click here to see the full text)
9. Apple Inc. (NASDAQ:AAPL)
L2 Asset Management’s Stake Value: $806,000
Percentage of L2 Asset Management’s 13F Portfolio: 2.03%
Number of Hedge Fund Holders: 120
Apple Inc. (NASDAQ:AAPL), an American multinational technology company providing consumer electronics and software, is one of the most notable tech stocks from L2 Asset Management’s third quarter portfolio. The hedge fund holds an $806,000 position in Apple Inc. (NASDAQ:AAPL), which represents 2.03% of the total 13F securities for Q3 2021.
Apple Inc. (NASDAQ:AAPL) published its fourth quarter results on January 27, posting earnings per share of $2.10, beating estimates by $0.21. The Q4 revenue came in at $123.95 billion, up 11.22% year-over-year, surpassing estimates by $5.41 billion.
Credit Suisse analyst Sami Badri on January 31 raised the price target on Apple Inc. (NASDAQ:AAPL) to $168 from $150 and kept a Neutral rating on the shares. The analyst noted that Apple Inc. (NASDAQ:AAPL)’s Q4 revenue of $123.9 billion came in ahead of Street consensus, despite supply constraints that were worse than Q3. The analyst pointed out that growth should decelerate on tough comparisons, although revenue for Q1 and Q2 2022 is expected to grow.
On January 27, Apple Inc. (NASDAQ:AAPL) declared a $0.22 per share quarterly dividend, in line with previous. The dividend is payable on February 10, to shareholders of record on February 7.
According to Insider Monkey’s third quarter database, 120 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), with stakes totaling $146 billion. Berkshire Hathaway holds the largest stake in the company as of Q3 2021, with more than 887 million shares worth $125.5 billion.
Here is what Alger Spectra Fund has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives tight engagement with consumers and enterprises, fostering the growing purchases of high-margin services like music, apps and Apple Pay. Apple’s quarterly earnings exceeded street estimates on strong margin realization driven by a sales mix of more profitable services. The margin strength was even more impressive given significantly higher freight costs and supply constraints that prevented approximately $6 billion in revenue realization.”
8. Microsoft Corporation (NASDAQ:MSFT)
L2 Asset Management’s Stake Value: $854,000
Percentage of L2 Asset Management’s 13F Portfolio: 2.15%
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is one of the Big Five American information technology companies, providing computer software and consumer electronics worldwide.
In Q3 2021, Nathan Przybylo’s L2 Asset Management held 3,029 Microsoft Corporation (NASDAQ:MSFT) shares, worth $854,000, representing 2.15% of the fund’s 13F investments.
In its Q4 earnings report, published on January 25, Microsoft Corporation (NASDAQ:MSFT) posted earnings per share of $2.48, beating estimates by $0.16. The $51.73 billion jumped 20.09% from the prior-year quarter, outperforming estimates by $938.45 million.
Argus analyst Joseph Bonner kept a Buy rating and a $371 price target on Microsoft Corporation (NASDAQ:MSFT) on January 27 after its Q4 earnings beat and guidance. Technology shares have been beaten down by a variety of concerns, but the company’s strong results and outlook suggest that underlying software demand remains robust, the analyst told investors in a research note. Bonner also raised his FY22 EPS estimate to $9.76 from $9.70 and his FY23 forecast to $10.56 from $10.47.
Microsoft Corporation (NASDAQ:MSFT) on December 7 declared a $0.62 per share quarterly dividend, in line with previous. The dividend is payable on March 10, to shareholders of record on February 17.
Among the hedge funds tracked by Insider Monkey, 250 funds were long Microsoft Corporation (NASDAQ:MSFT), with stakes totaling $65.8 billion, as compared to 238 funds in the preceding quarter, holding stakes in Microsoft Corporation (NASDAQ:MSFT) worth $62.4 billion. Arrowstreet Capital is one of the leading Microsoft Corporation (NASDAQ:MSFT) stakeholders, with a $5 billion position in the company.
Here is what Alger Spectra Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Class A shares of the Alger Spectra Fund underperformed the Russell 3000 Growth Index during the fourth quarter of 2021. Microsoft Corp. was among the top contributors to performance. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s CEO believes technology spending as a percent of GDP is likely to jump from about 5% today to 10% in a few years and that Microsoft will continue to take market share Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft reported that Azure grew 50% inthe past quarter. This high unit volume growth is a primary driver of the company’s higher share price, but strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
7. Xilinx, Inc. (NASDAQ:XLNX)
L2 Asset Management’s Stake Value: $899,000
Percentage of L2 Asset Management’s 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 62
Xilinx, Inc. (NASDAQ:XLNX) is an American technology company that is a key supplier of programmable logic devices. L2 Asset Management owns 5,954 shares of Xilinx, Inc. (NASDAQ:XLNX) as of Q3 2021, worth $899,000, representing 2.27% of the fund’s 13F securities for the period.
Xilinx, Inc. (NASDAQ:XLNX) announced on January 26 its Q4 financial results, posting an EPS of $1.29, beating estimates by $0.27. Revenue for the quarter came in at $1.01 billion, up 25.85% year-over-year, exceeding estimates by $68.38 million.
Xilinx, Inc. (NASDAQ:XLNX) declared on January 26 a $0.37 per share quarterly dividend, in line with previous. The dividend is payable on February 14, to shareholders of record on February 7.
On January 27, shares of Xilinx, Inc. (NASDAQ:XLNX) rose 5.9% after China’s antitrust authority gave a conditional approval for Advanced Micro Devices, Inc. (NASDAQ:AMD)’s planned $35 billion purchase of the company.
Truist analyst William Stein on February 1 raised the price target on Xilinx, Inc. (NASDAQ:XLNX) to $190 from $180 but kept a Hold rating on the shares. The company’s Q4 results were “solid”, and he raised his 2022 EPS view to $4.63, though his Hold rating continues to reflect Xilinx, Inc. (NASDAQ:XLNX)’s pending acquisition by Advanced Micro Devices, Inc. (NASDAQ:AMD), the analyst tells investors in a research note.
Among the hedge funds tracked by Insider Monkey, 62 funds were long Xilinx, Inc. (NASDAQ:XLNX) in Q3 2021, up from 59 funds in the quarter earlier. D E Shaw is the largest Xilinx, Inc. (NASDAQ:XLNX) stakeholder, with more than 4 million shares worth $632.4 million.
In addition to Best Buy Co., Inc. (NYSE:BBY), Altria Group, Inc. (NYSE:MO), and Alphabet Inc. (NASDAQ:GOOG), Xilinx, Inc. (NASDAQ:XLNX) is a notable stock from L2 Asset Management’s Q3 portfolio.
6. NetApp, Inc. (NASDAQ:NTAP)
L2 Asset Management’s Stake Value: $910,000
Percentage of L2 Asset Management’s 13F Portfolio: 2.29%
Number of Hedge Fund Holders: 29
L2 Asset Management owns 10,136 NetApp, Inc. (NASDAQ:NTAP) shares as of Q3 2021, valued at $910,000, representing 2.29% of the fund’s total investments for the third quarter. NetApp, Inc. (NASDAQ:NTAP) is based in Sunnyvale, California, providing hybrid cloud data services and data management.
On November 30, NetApp, Inc. (NASDAQ:NTAP) declared a quarterly dividend per share of $0.50, which was paid on January 26, to shareholders of record on January 7. The company also exceeded market consensus estimates for Q3 earnings and revenue.
Morgan Stanley analyst Meta Marshall on January 20 assumed coverage of NetApp, Inc. (NASDAQ:NTAP) with an Overweight rating and a price target of $109, up from $98, stating that the firm’s Q4 IT Hardware Value-Added Resellers survey points to supply chain improvement and accelerating cloud workload intentions.
According to the hedge funds monitored by Insider Monkey in Q3 2021, 29 funds reported owning stakes in NetApp, Inc. (NASDAQ:NTAP), with stakes equaling $671.4 million, as compared to 31 funds in the previous quarter, holding stakes in NetApp, Inc. (NASDAQ:NTAP) worth $437.7 million.
NetApp, Inc. (NASDAQ:NTAP) is a prominent holding in L2 Asset Management’s third quarter portfolio, just like Best Buy Co., Inc. (NYSE:BBY), Altria Group, Inc. (NYSE:MO), and Alphabet Inc. (NASDAQ:GOOG).
Here is what Miller Howard Investments has to say about NetApp, Inc. (NASDAQ:NTAP) in its Q3 2021 investor letter:
“Technology remains important in our portfolios, although the sector weights have come down over the past year. We now hold NetApp (NTAP) of which has a strong growth prospects, yet attractive valuations in our view. Unlike many younger tech companies, we believe our holdings should significantly benefit from an upturn in the economy.”
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Disclosure: None. 10 Tech Stocks to Buy According to Nathan Przybylo’s L2 Asset Management is originally published on Insider Monkey.
