In this article, we discuss 10 technology stocks to buy now according to Dan Loeb. If you want to see some more stocks from our list, click 5 Technology Stocks to Buy Now According to Dan Loeb.
Dan Loeb founded Third Point in 1995, which is a New York-based hedge fund with a history of investing in failing companies and turning their fortunes around. Dan Loeb is famous for his aggressive activist campaigns against companies like Yahoo, Sotheby’s, and Sony over the years. 25.56% of the securities in Loeb’s $14.3 billion portfolio are concentrated in the technology sector, which reflects the investor’s keen interest in the space.
Dan Loeb is bullish on “old tech” names in 2022, citing that he sees an untapped value of $1 trillion in Amazon.com, Inc. (NASDAQ:AMZN), which can be realized by the solid ecommerce and Amazon Web Services mix maintained by the tech giant. He sees value in tech stocks after the huge market selloff, and expects these big companies to outperform in this year.
Amazon.com, Inc. (NASDAQ:AMZN) is the biggest technology holding in Dan Loeb’s portfolio, and he went on record in February 2022 – acknowledging the company’s disclosures to shareholders that clearly mention initiatives like latest share repurchases and clear financial statements. He believes the company’s new CEO Andy Jassy can take Amazon.com, Inc. (NASDAQ:AMZN) to the next level by his focused management regime and keeping shareholders in the loop.
Some of the most notable technology stocks in Dan Loeb’s Third Point portfolio include Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), among others discussed in detail ahead.
Dan Loeb of Third Point
Our Methodology
We used Dan Loeb’s Third Point portfolio for the fourth quarter of 2021 for this analysis, selecting the billionaire’s top 10 technology picks for the period.
Technology Stocks to Buy Now According to Dan Loeb
10. Alight, Inc. (NYSE:ALIT)
Third Point’s Stake Value: $90,502,000
Percentage of Third Point’s 13F Portfolio: 0.63%
Number of Hedge Fund Holders: 39
Alight, Inc. (NYSE:ALIT) provides cloud-based business and human capital solutions, aiming for a high-performance company culture. The company also offers cloud optimization services to platforms like Workday, SAP SuccessFactors, Oracle, and Cornerstone OnDemand.
Dan Loeb’s Third Point owns 8.3 million shares of Alight, Inc. (NYSE:ALIT) as of Q4 2021, worth $90.5 million, representing 0.63% of the hedge fund’s total 13F holdings. Third Point acquired a position in Alight, Inc. (NYSE:ALIT) in Q3 2021, but slashed its stake by 51% in the December quarter.
On March 16, Alight, Inc. (NYSE:ALIT)’s director, Richard N Massey, purchased 50,000 common shares priced at $18.92 each, worth approximately $450,000. The stock rose 6.9% following the disclosure.
Stephens analyst Scott Schoenhaus on February 7 initiated coverage of Alight, Inc. (NYSE:ALIT) with an Overweight rating and a $15 price target. He sees Alight, Inc. (NYSE:ALIT) as “uniquely and strategically positioned”, and the current valuation offers an attractive entry point for investors looking for “a high-quality, under-followed company”, the analyst noted.
According to Insider Monkey’s fourth quarter database, 39 hedge funds held bullish positions in Alight, Inc. (NYSE:ALIT), with combined stakes exceeding $1 billion. Bob Peck and Andy Raab’s FPR Partners is the leading shareholder of the company, with more than 24 million shares worth approximately $261 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Alight, Inc. (NYSE:ALIT) is a notable tech stock to buy now according to Dan Loeb.
9. Coupa Software Incorporated (NASDAQ:COUP)
Third Point’s Stake Value: $102,732,000
Percentage of Third Point’s 13F Portfolio: 0.71%
Number of Hedge Fund Holders: 59
Coupa Software Incorporated (NASDAQ:COUP) is a California-based company that offers an on-demand business spend management platform, helping companies maximize profits, optimize supply chains, and maintain liquidity. Dan Loeb, as of Q4 2021, held 650,000 Coupa Software Incorporated (NASDAQ:COUP) shares, worth $102.7 million, representing 0.71% of his total 13F portfolio.
Coupa Software Incorporated (NASDAQ:COUP) reported its Q4 financial results on March 14, posting earnings per share of $0.19, beating consensus estimates by $0.14. The $193.30 million revenue increased 18.19% year-over-year, topping market predictions by $7.11 million.
On April 6, Evercore ISI analyst Peter Levine upgraded Coupa Software Incorporated (NASDAQ:COUP) to Outperform from In Line, lifting the price target to $140 from $75. The long-term risk/reward on the stock at current levels is “attractive” due to Coupa Software Incorporated (NASDAQ:COUP)’s growth opportunity, even though he may be a “bit early” on this long call, the analyst told investors in a research note. The company’s sales cycles are returning to pre-pandemic levels, and its pipelines are at a record high.
Among the hedge funds tracked by Insider Monkey, 59 funds were bullish on Coupa Software Incorporated (NASDAQ:COUP) at the end of the fourth quarter of 2021, compared to 52 funds in the preceding quarter. Andreas Halvorsen’s Viking Global is the largest stakeholder of the company, with more than 4 million shares worth $658.75 million.
Here is what ClearBridge Investments has to say about Coupa Software Incorporated (NASDAQ:COUP) in its Q2 2021 investor letter:
“Within IT, we added positions in Coupa Software, a leader in the fast growing Business Spend Management market with opportunity to double its total addressable market by harnessing B2B payments with its Coupa Pay product; and AppLovin, a leading mobile gaming advertising network in a unique position to utilize its ad expertise to grow its own mobile game business at low user acquisition costs.”
8. Zendesk, Inc. (NYSE:ZEN)
Third Point’s Stake Value: $136,036,000
Percentage of Third Point’s 13F Portfolio: 0.94%
Number of Hedge Fund Holders: 57
Zendesk, Inc. (NYSE:ZEN) was founded in 2007 and is headquartered in San Francisco, California. Zendesk, Inc. (NYSE:ZEN) is a software development company that offers SaaS solutions to businesses around the world. Dan Loeb’s Third Point held 1.30 million shares of the company in the fourth quarter of 2021, worth $136 million, accounting for 0.94% of the total 13F portfolio.
In 2021, Zendesk, Inc. (NYSE:ZEN) reported a full-year revenue of $1.3 billion, compared to a revenue of $1.02 billion in the prior year. Zendesk, Inc. (NYSE:ZEN)’s net loss for the year in 2021 increased to $223.6 million from $218.2 million in 2020.
On February 14, Wolfe Research analyst Alex Zukin downgraded Zendesk, Inc. (NYSE:ZEN) to Peer Perform from Outperform. Zendesk, Inc. (NYSE:ZEN)’s fourth quarter results exceeded expectations by low margins and the company did not raise its 2022 outlook, the analyst told investors. He cited the 2022 guidance for lower growth, contracting margins, and execution uncertainty for the downgrade.
According to Insider Monkey’s Q4 database, 57 hedge funds placed long calls on Zendesk, Inc. (NYSE:ZEN), with collective stakes amounting to $2.5 billion, compared to 53 funds in the earlier quarter, holding stakes in Zendesk, Inc. (NYSE:ZEN) worth $1.5 billion. Barry Rosenstein’s JANA Partners held the biggest position in the company, with 2.3 million shares valued at approximately $249 million.
Here is what Carillon Tower Advisers has to say about Zendesk, Inc. (NYSE:ZEN) in its Q3 2021 investor letter:
“Zendesk provides customer support software solutions. After successfully navigating the early stages of the pandemic in 2020, the firm has seen its stock cool off on the threat of increased competition from low-cost alternatives. We do not believe that the competitive dynamics have been altered. In fact, the company’s annual revenue growth rate has accelerated in 2021 from the second half of 2020. The shares also currently trade at a deep discount to other cloud-based software vendors.”
7. Dell Technologies Inc. (NYSE:DELL)
Third Point’s Stake Value: $202,212,000
Percentage of Third Point’s 13F Portfolio: 1.41%
Number of Hedge Fund Holders: 62
Dell Technologies Inc. (NYSE:DELL) is an American multinational technology company that specializes in computer hardware and software, cloud computing, data storage, information security, and consulting. In the fourth quarter of 2021, Dan Loeb’s Third Point held 3.60 million shares of Dell Technologies Inc. (NYSE:DELL), worth $202.2 million, representing 1.41% of the hedge fund’s total 13F portfolio.
On February 24, Dell Technologies Inc. (NYSE:DELL) declared a quarterly dividend of $0.33 per share. The dividend is payable on April 29, to shareholders of record on April 15. Dell Technologies Inc. (NYSE:DELL)’s dividend yield on April 15 stood at 2.81%. The company plans to increase its annual cash dividends to $1.32 per share for fiscal 2023.
Goldman Sachs analyst Rod Hall downgraded Dell Technologies Inc. (NYSE:DELL) on April 1 to Neutral from Buy, lowering the price target to $61 from $68. He also removed Dell Technologies Inc. (NYSE:DELL) from Goldman’s Americas Convictions List. While the analyst sees the shares as inexpensive compared to competitors, he believes increasing fundamental headwinds are “hindering this value unlock”.
Among the hedge funds tracked by Insider Monkey at the end of December 2021, 62 funds were long Dell Technologies Inc. (NYSE:DELL), compared to 60 funds in the prior quarter. The total stakes owned in the fourth quarter amounted to $2.8 billion. Paul Singer’s Elliott Management is the largest position holder in the company, with 9.4 million shares worth $532.70 million.
Here is what Third Point Management has to say about Dell Technologies Inc. (NYSE:DELL) in its Q3 2021 investor letter:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
6. Expedia Group, Inc. (NASDAQ:EXPE)
Third Point’s Stake Value: $236,266,000
Percentage of Third Point’s 13F Portfolio: 1.64%
Number of Hedge Fund Holders: 82
Expedia Group, Inc. (NASDAQ:EXPE) is an American online travel company with localized websites for booking vacation accommodations across the world. Dan Loeb’s Third Point owned 1.30 million shares of Expedia Group, Inc. (NASDAQ:EXPE) in the fourth quarter of 2021, worth $236.2 million, representing 1.64% of the total 13F holdings.
Expedia Group, Inc. (NASDAQ:EXPE)’s 2021 revenue came in at $8.5 billion, compared to $5.1 billion in the prior year. The company’s net income in 2021 stood at $12 million, a solid recovery from the net loss of $2.6 billion in 2020.
On April 7, Argus analyst John Staszak reiterated a Buy recommendation on Expedia Group, Inc. (NASDAQ:EXPE) but lowered the firm’s price target on the shares to $220 from $240. The analyst contended that the company’s Q4 bookings rose and Expedia Group, Inc. (NASDAQ:EXPE) seems to be on track to report above average earnings growth in 2022. The analyst’s long-term Buy rating represents projections for ongoing growth post-pandemic in airline tickets, hotel bookings, and other travel services.
According to Insider Monkey’s Q4 data, Expedia Group, Inc. (NASDAQ:EXPE) was found in the public stock portfolios of 82 hedge funds, compared to 78 funds in the earlier quarter. The hedge funds in the fourth quarter owned combined stakes of $7.4 billion. Daniel Sundheim’s D1 Capital Partners is the biggest shareholder of Expedia Group, Inc. (NASDAQ:EXPE), with a position worth $2.2 billion.
Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Expedia Group, Inc. (NASDAQ:EXPE) is catching the interest of elite investors.
Here is what Heartland Mid Cap Value Fund has to say about Expedia Group, Inc. (NASDAQ:EXPE) in its Q4 2021 investor letter:
“The run-up in equity prices over the past year and a half has narrowed the pool of attractively valued businesses. Economically sensitive areas of the market, in particular, have seen valuations stretched—but the impact of investor exuberance is evident in share prices of companies throughout the broader market. In our view, the elevated valuations commanded by many stocks have heightened risks and dampened upside potential.
In response to this backdrop, we continue to focus on finding and owning companies that are poised to succeed against a variety of backdrops or those that are priced at significant discounts to peers regardless of the sector or industry. Recent addition Expedia Group, Inc. (EXPE) is an example of the type of business we’ve found attractive.”
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Disclosure: None. 10 Technology Stocks to Buy Now According to Dan Loeb is originally published on Insider Monkey.
