In this article, we discuss 10 tech stocks to buy now according to Robert Pitts’ Steadfast Capital. If you want to skip our detailed analysis of Pitts’ history, investment philosophy, and hedge fund performance, go directly to 5 Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capital.
Robert Pitts spent several years at Tiger Management before founding the New York-based hedge fund Steadfast Capital in 1997. The hedge fund began accepting outside investors in 1998. Steadfast Capital advises the funds on discretionary investments and has extensive and flexible investment jurisdiction. Robert Pitts’ Steadfast Capital 13F public stock portfolio was valued at $6 billion in the fourth quarter of 2021, mainly investing in the consumer discretionary, energy, finance, information technology, utility and telecommunications, and communications sectors.
Robert Pitts likes to diversify his portfolio. His hedge fund invests in small and large businesses with strong possibilities for future growth. Some of these companies include Microsoft Corporation (NASDAQ:MSFT), Fidelity National Information Services, Inc. (NYSE:FIS) and Block, Inc. (NYSE:SQ).
Steadfast Capital owns 1.11 million shares of the tech giant Microsoft Corporation (NASDAQ:MSFT). On April 1, Microsoft Corporation (NASDAQ:MSFT) purchased Minit, a process mining technology provider based in Bratislava, Slovakia, for an undisclosed sum.
Another technology stock in Steadfast Capital’s portfolio is Fidelity National Information Services, Inc. (NYSE:FIS). On April 5, Fidelity National Information Services, Inc. (NYSE:FIS) was assigned an Overweight rating by Stephens analyst Charles Nabhan and a $125 price target.
Robert Pitts’ Steadfast Capital also has a significant holding in Block, Inc. (NYSE:SQ). On April 5, Stephens analyst Charles Nabhan initiated coverage of Block, Inc. (NYSE:SQ), giving the stock an Overweight rating with a price objective of $170.
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Our Methodology
With this context in mind, here is our list of the 10 tech stocks to buy now according to Robert Pitts’ Steadfast Capital. The tech stocks were chosen from Pitts’ fourth-quarter regulatory filings.
Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capital
10. StoneCo Ltd. (NASDAQ:STNE)
Steadfast Capital’s Stake Value: $40,120,000
Percentage of Steadfast Capital’s 13F Portfolio: 0.66%
Number of Hedge Fund Holders: 35
StoneCo Ltd. (NASDAQ:STNE) is a company that specializes in financial technology. The firm provides a comprehensive cloud-based technology platform for electronic commerce in shops, on the web, and on mobile devices. On April 8, Cantor Fitzgerald analyst Josh Siegler initiated coverage of StoneCo Ltd. (NASDAQ:STNE), rating the stock as Overweight and setting the price target at $15.
Steadfast Capital elevated its position in StoneCo Ltd. (NASDAQ:STNE) by 81% in Q4 2021, holding 2.38 million shares worth over $40.12 million. The stock accounts for 0.66% of the fund’s total 13F portfolio. As of the conclusion of the fourth quarter, Berkshire Hathaway was the largest shareholder in StoneCo Ltd. (NASDAQ:STNE) out of the 924 hedge funds tracked by Insider Monkey.
At the end of the fourth quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $892.51 million in StoneCo Ltd. (NASDAQ:STNE), down from 37 the preceding quarter worth $2.22 billion.
Along with StoneCo Ltd. (NASDAQ:STNE), Microsoft Corporation (NASDAQ:MSFT), Fidelity National Information Services, Inc. (NYSE:FIS) and Block, Inc. (NYSE:SQ) are some of Robert Pitts’ Steadfast Capital’s significant-tech holdings in Q4 2021.
ClearBridge Investments, in its fourth quarter 2021 investor letter, mentioned StoneCo Ltd. (NASDAQ:STNE). Here is what the fund said:
“We also sold and trimmed several names in the emerging market and emerging growth areas, to manage risk and pursue growth companies with a better long-term risk/reward. These included Brazilian payments provider StoneCo. Having expected a rebound in their performance post a profit warning earlier in the year, rising interest rates in Brazil and investments in newly acquired companies increased operating costs and depressed earnings.”
9. Marqeta, Inc. (NASDAQ:MQ)
Steadfast Capital’s Stake Value: $85,603,000
Percentage of Steadfast Capital’s 13F Portfolio: 1.42%
Number of Hedge Fund Holders: 39
Marqeta, Inc. (NASDAQ:MQ) is a company that develops digital payment technologies. It has solutions for commerce disruptors, digital banks, IT behemoths, and financial institutions, among other industries. Marqeta, Inc. (NASDAQ:MQ) had roughly 200 clients as of December 31, 2021.
On April 6, Barclays analyst Ramsey El-Assal boosted his price objective on Marqeta, Inc. (NASDAQ:MQ) from $17 to $19 and assigned the stock an Overweight rating. Marqeta was singled out by the analyst as a high-quality, undervalued asset poised for strong outperformance amid the larger fintech slump.
Robert Pitts’ Steadfast Capital is the third-largest stakeholder of Marqeta, Inc. (NASDAQ:MQ). Pitts added more than 3.48 million shares to his holdings in the fourth quarter of 2021. Steadfast Capital owned more than 4.99 million shares in the firm, valued at over $85.60 million, representing 1.42% of the hedge fund portfolio. Mick Hellman’s HMI Capital is the leading shareholder of Marqeta, Inc. (NASDAQ:MQ), with a $353.27 million stake in the company.
Overall, hedge funds are loading up on Marqeta, Inc. (NASDAQ:MQ), as 39 out of 924 funds tracked by Insider Monkey held stakes in the company, up from 20 funds a quarter earlier. HMI Capital is the most significant stakeholder of Marqeta, Inc. (NASDAQ:MQ), with 20.57 million shares worth $353.27 million.
Alger, in its fourth quarter 2021 investor letter, mentioned Marqeta, Inc. (NASDAQ:MQ). Here is what the fund said:
“Margeta facilitates the implementation of digital payment technologies. It is a Positive Dynamic Change beneficiary in the digital payments industry. We believe as more commerce is conducted digitally, the digitization and transformation of the payments ecosystem is needed, which Margeta seeks to address through its modern payment card issuing platform, providing infrastructure and tools for building configurable payment cards. Margeta offers issuer processor services and acts as a card program manager. Its platform creates customized payment cards that provide innovative payment experiences for their clients’ customers and end users.
Marqeta has emerged as a card issuing platform category leader in many disruptive verticals, including on-demand delivery, alternative lending, expense management, disbursement, digital remittances, and digital banks. Margeta’s solutions are even sought out by large financial institutions to improve their existing offerings and stay competitive with technology-focused new market entrants. Margeta detracted from performance despite achieving strong revenue growth with higher gross profitability and an expanded customer base in the third quarter. We believe the expiration of a lock up period and the company facing tough comparisons resulting from COVID-19 stimulus payments having boosted consumer spending contributed to the underperformance of Marqeta shares. Additionally, the still small footprints within the Margeta revenue base of crypto, truck brokerage and business-to-business clients may take time to scale.”
8. Adobe Inc. (NASDAQ:ADBE)
Steadfast Capital’s Stake Value: $112,327,000
Percentage of Steadfast Capital’s 13F Portfolio: 1.87%
Number of Hedge Fund Holders: 94
Adobe Inc. (NASDAQ:ADBE) is a global software corporation with many products. Digital Media, Digital Experience, and Publishing are the company’s three main segments. In 2020, Digital Media accounted for 68.88% of Adobe’s income, Digital Experience for 28.55%, and 2.57% for the Publishing segment.
On March 29, Exane BNP Paribas analyst Stefan Slowinski initiated coverage of Adobe Inc. (NASDAQ:ADBE), rating the stock as Outperform and a $570 price target. Fisher Asset Management is Adobe Inc. (NASDAQ:ADBE)’s largest shareholder, with shares totaling $3.82 billion.
Steadfast Capital started building its position in Adobe Inc. (NASDAQ:ADBE) in the second quarter of 2019. In the fourth quarter of 2021 the hedge fund held 198,086 shares in Adobe Inc. (NASDAQ:ADBE), valued at $112.33 million. The company represented 1.87% of the hedge fund’s 13F portfolio.
In the fourth quarter, hedge fund sentiment decreased for Adobe Inc. (NASDAQ:ADBE). According to data compiled by Insider Monkey, 94 hedge funds held stakes in Adobe Inc. (NASDAQ:ADBE) at the end of the fourth quarter, down from 95 funds a quarter earlier.
Richie Capital Group mentioned Adobe Inc. (NASDAQ:ADBE) in its Q2 2021 investor letter: Here is what the fund has to say:
“Adobe Inc. (NASDAQ:ADBE) (up 24.8%) – In the last 15 years, Adobe Inc. (NASDAQ:ADBE) has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF-reader and photo-editing software Photoshop. However, Adobe Inc. (NASDAQ:ADBE) sells a full suite of software products through a recurring subscription model. Adobe Inc. (NASDAQ:ADBE) transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. Adobe Inc. (NASDAQ:ADBE) achieved $13B in revenue in 2020 with 88% Gross Margins.”
7. Datadog, Inc. (NASDAQ:DDOG)
Steadfast Capital’s Stake Value: $116,692,000
Percentage of Steadfast Capital’s 13F Portfolio: 1.94%
Number of Hedge Fund Holders: 73
Datadog, Inc. (NASDAQ:DDOG) is a cloud-native company specializing in analyzing machine data. Clients may monitor and assess their whole IT infrastructure using the company’s software-as-a-service offering. With approximately 5.30 million shares worth $944.47 million, Tiger Global Management LLC is the largest shareholder of Datadog, Inc. (NASDAQ:DDOG) as of Q4.
As part of a larger research note on revised values in the Infrastructure and Security software sectors, Truist analyst Joel Fishbein decreased his price objective on Datadog, Inc. (NASDAQ:DDOG) to $200 from $225 on March 24 but reiterated a Buy recommendation on the stock.
On March 30, Datadog, Inc. (NASDAQ:DDOG) was named a Microsoft Corporation (NASDAQ:MSFT)’s partner in the Azure Cloud Adoption Framework.
On the other hand, Robert Pitts revealed a 45% reduction in his holdings in Datadog, Inc. (NASDAQ:DDOG). The investment has a value of $116.69 million and 655,168 shares in the fourth quarter of 2021. However, the company is getting the attention of the smart money, as 73 hedge funds tracked by Insider Monkey reported owning stakes in Datadog, Inc. (NASDAQ:DDOG) at the end of the fourth quarter, up from 62 funds a quarter earlier.
Artisan Partners, in its fourth quarter 2021 investor letter, highlighted a few stocks and Datadog, Inc. (NASDAQ:DDOG) was one of them. Here is what Artisan Partners stated:
“Datadog, Inc. (NASDAQ:DDOG) is a leading provider of monitoring and analytics for cloud-based applications. The software has become central to how organizations deliver differentiated products and user experiences and optimize business processes—fueling the disruption taking place across nearly every industry. The success of this digital transformation trend is increasingly tied to quality and performance—in turn, driving strong secular demand for IT infrastructure and application monitoring platforms like Datadog, Inc. (NASDAQ:DDOG)’s. The company’s profit cycle was on clear display in its Q3 results, with 75% top line growth driven by new customer additions and existing customers adding additional services. Free cash flow margins expanded nicely as well. We believe Datadog, Inc. (NASDAQ:DDOG)’s low-touch, land-and-expand customer acquisition model combined with a steadily expanding product portfolio position it well for strong profit growth in the coming years, though we trimmed our position size during the quarter as shares approached our PMV estimate.”
6. Workday, Inc. (NASDAQ:WDAY)
Steadfast Capital’s Stake Value: $118,125,000
Percentage of Steadfast Capital’s 13F Portfolio: 1.97%
Number of Hedge Fund Holders: 74
Workday, Inc. (NASDAQ:WDAY) is a company that specializes in the creation of business cloud solutions for finance and human resources. Even after selling 521,203 shares of Workday, Inc. (NASDAQ:WDAY) in the fourth quarter, Robert Pitts’ Steadfast Capital still held 432,406 shares of the company, worth about $118.13 million.
On March 21, Stifel analyst Brad Reback lowered his price target on Workday, Inc. (NASDAQ:WDAY) from $300 to $275 and maintained a Buy rating, as he and the enterprise software team reduced top and bottom line estimates for the vast majority of the roughly 70 software companies they followed by a low single digit percentage on average.
There were 74 hedge funds in our database that held stakes in Workday, Inc. (NASDAQ:WDAY) at the end of the fourth quarter, up from 72 funds in the third quarter. Lone Pine Capital is Workday, Inc. (NASDAQ:WDAY)’s most significant stakeholder, with 5.81 million shares valued at $1.59 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Fidelity National Information Services, Inc. (NYSE:FIS), and Block, Inc. (NYSE:SQ), Workday, Inc. (NASDAQ:WDAY) is a notable stock from Steadfast Capital’s Q4 portfolio.
Here is what ClearBridge Investments, in its fourth quarter 2021 investor letter has to say about Workday, Inc. (NASDAQ:WDAY):
“We believe the weakness created an opportunity for us to add to an exceptionally high-quality payments franchise with an attractive growth and free cash flow profile and little credit or interest rate exposure. It also supported our efforts to maintain diversified IT exposure in a narrowing market; additions to our software-as-aservice (SaaS) holding Workday during the quarter also bolstered this diversification, in which we seek to balance exposure to more widely owned mega cap names…”
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Disclosure: None. 10 Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capital is originally published on Insider Monkey.
