In this article, we will be talking about the 10 technology stocks hedge funds are talking about. You can skip our comprehensive analysis of the technology sector, and go directly to 5 Technology Stocks Hedge Funds Are Talking About.
After suffering a bloodbath for weeks, tech investors finally had a sigh of relief as tech stocks gained amid the uncertainty caused by the Russian invasion of Ukraine. Technology stocks also gained on the back of expectations that the Fed won’t hike interest rates as much as it was previously expected.
Jamie Cox, managing partner for Harris Financial Group, believes that the Fed would hike rates by at most 25 basis points, Wall Street Journal reported.
“The Federal Reserve was very unlikely to do a 50 basis point rate hike for liftoff at its March meeting anyway,” Cox said.
Several investor letters from hedge funds and prominent investors are being reviewed by Insider Monkey to pick out noteworthy stocks that the smart money is engaging in right now. You can check out letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
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Technology Stocks Hedge Funds Are Talking About
10. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 96
Oakmark Funds, an investment management firm, published its “Oakmark Global Select Fund” fourth quarter 2021 investor letter – a copy of which can be seen here. A return of 2.3% was reported by the fund in the fourth quarter of 2021, underperforming the MSCI World Index, which returned 7.8% for the same period. The Fund finished the calendar year with a positive absolute performance of 19.2%, compared to the index’s return of 21.8%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Oakmark Global Fund, in its Q4 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and discussed its stance on the firm. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company with a $321.0 billion market capitalization.
Here is what Oakmark Global Fund has to say about Alibaba Group Holding Limited in its Q4 2021 investor letter:
“Alibaba Group (China) was a top detractor for the quarter due to increased regulation from the Chinese government on local technology businesses, which continued to pressure the company’s share price. In addition, investors were disappointed with second-quarter earnings reported in November, marked by decelerating growth and lowered revenue guidance for the full year. Alibaba’s slowing growth was attributable to decreased retail spending in China, increased e-commerce competition and the company’s reinvestments into its merchant base. Although the company currently faces several headwinds, we believe Alibaba is an important driver of innovation in China, and several of its businesses have yet to fully scale. Finally, we believe the shares are undervalued given the quality of the company’s assets and its technological know-how.”
Our calculations show that Alibaba Group Holding Limited (NYSE: BABA) ranks 13th on our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 115 hedge fund portfolios at the end of the third quarter of 2021, compared to 146 funds in the previous quarter. In December 2021, we also shared another hedge fund’s views on BABA in another article.
9. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 108
Tao Value, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A return of -2.07% was delivered by the fund for the Q2 of 2021, trailing the MSCI All Country World Index that delivered a +7.11% return for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Tao Value, the fund mentioned Sea Limited (NYSE: SE), and discussed its stance on the firm. Sea Limited is a Singapore-based consumer internet company, that currently has a $158.6 billion market capitalization.
Here is what Tao Value has to say about Sea Limited 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 established ASEAN & LatAm market and received positive reception from new markets like US. On e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now top downloaded e-commerce 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.”
Based on our calculations, Sea Limited (NYSE: SE) ranks 12th in our list of the 30 Most Popular Stocks Among Hedge Funds. SE was in 117 hedge fund portfolios at the end of the third quarter of 2021, compared to 104 funds in the previous quarter.
8. salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Holders: 110
ClearBridge Investments, an investment management firm, published its “Large Cap Growth Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Growth Strategy underperformed its Russell 1000 Growth Index benchmark during the third quarter. On an absolute basis, the Strategy had gains across four of the eight sectors in which it was invested (out of 11 sectors total). The leading contributors to performance were in the IT and health care sectors, while the consumer discretionary and industrials sectors were detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
ClearBridge Large Cap Growth Strategy, in its Q3 2021 investor letter, mentioned salesforce.com, inc. (NYSE: CRM) and discussed its stance on the firm. salesforce.com, inc. is a San Francisco, California-based software company with a $224.8 billion market capitalization.
Here is what ClearBridge Large Cap Growth Strategy has to say about salesforce.com, inc. in its Q3 2021 investor letter:
“On an individual stock basis, leading contributors to absolute returns in the third quarter included positions in Salesforce.com. Meanwhile, with a new CFO focused on delivering consistent growth and expanding margins, Salesforce could soon surpass SAP as the world’s largest enterprise applications provider with an all-subscription-based model. The recent acquisition of Slack should better connect the company’s products and services with its users as the messaging platform becomes more dynamic and interactive.”
Based on our calculations, salesforce.com, inc. (NYSE: CRM) ranks 11th in our list of the 30 Most Popular Stocks Among Hedge Funds. CRM was in 119 hedge fund portfolios at the end of the third quarter of 2021, compared to 108 funds in the previous quarter. In December 2021, we also shared another hedge fund’s views on CRM in another article.
7. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 110
Alger, an investment management firm, published its “Alger Spectra Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter of 2021, the largest portfolio sector weightings were Information Technology and Consumer Discretionary. The Health Care sector was the largest sector overweight and Consumer Staples was the largest sector underweight. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Alger Spectra Fund, in its Q4 2021 investor letter, mentioned Paypal Holdings, Inc. (NASDAQ: PYPL) and discussed its stance on the firm. Paypal Holdings, Inc. is a San Jose, California-based financial technology company with a $185.8 billion market capitalization.
Here is what Alger Spectra Fund has to say about Paypal Holdings, Inc. in its Q4 2021 investor letter:
“Among long positions, PayPal Holdings, Inc. was among the top detractors from performance. PayPal is a pure play on ecommerce and electronic payments, which is driving high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. Coronavirus has significantly accelerated the adoption of ecommerce and the utilization of digital payments platforms. PayPal detracted from the portfolio’s performance as its third quarter revenues disappointed toward the end of the quarter on weakening travel and ecommerce activity. The company issued weaker-than-expected fourth-quarter revenue guidance and provided initial 2022 revenue growth guidance of 18%, lower than consensus expectations of growth in the low 20% range. In the current fourth quarter, aggregated retail sales data and credit card activity have slowed.”
Our calculations show that Paypal Holdings, Inc. (NASDAQ: PYPL) ranks 9th on our list of the 30 Most Popular Stocks Among Hedge Funds. PYPL was in 123 hedge fund portfolios at the end of the third quarter of 2021, compared to 143 funds in the previous quarter. In December 2021, we also shared another hedge fund’s views on PYPL in another article.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Alger, an investment management firm, published its “Alger Spectra Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter of 2021, the largest portfolio sector weightings were Information Technology and Consumer Discretionary. The Health Care sector was the largest sector overweight and Consumer Staples was the largest sector underweight.
Alger Spectra Fund, in its Q4 2021 investor letter, mentioned Apple Inc. (NASDAQ: AAPL) and discussed its stance on the firm. Apple Inc. is a Cupertino, California-based technology company with a $2.6 trillion market capitalization.
Here is what Alger Spectra Fund has to say about Apple Inc. 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.”
Our calculations show that Apple Inc. (NASDAQ: AAPL) ranks 10th on our list of the 30 Most Popular Stocks Among Hedge Funds. AAPL was in 120 hedge fund portfolios at the end of the third quarter of 2021, compared to 138 funds in the previous quarter.
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Disclosure: None. 10 Technology Stocks Hedge Funds Are Talking About is originally published on Insider Monkey.
