In this article, we discuss 3 tech stocks to buy according to billionaire David Tepper. You can see more of Tepper’s favorite tech stocks by clicking 6 Tech Stocks To Buy Today According To Billionaire David Tepper.
3. Meta Platforms, Inc. (NASDAQ:FB)
Appaloosa Management’s Stake Value: $197.9 million
Percentage Of Appaloosa Management’s 13F Portfolio: 7.91%
Number of Hedge Fund Holders: 200
Formerly known as Facebook, Meta Platforms, Inc. (NASDAQ:FB) is an American multinational technology conglomerate company that owns and runs multiple social media platforms. Appaloosa Management held 890,000 shares of the tech giant at the close of the first quarter of 2022, worth roughly $197.9 million, making up 7.91% of the fund’s investment portfolio.
On May 16, Morgan Stanley analyst Brian Nowak maintained an Overweight rating on Meta Platforms, Inc. (NASDAQ:FB) stock with a price target of $330 on its shares. According to the analyst, the combination of a revenue acceleration in the second half and cost discipline leading to significant free cash flow could potentially lead towards free cash flow for the company.
At the end of the first quarter of 2021, 200 hedge funds in the database of Insider Monkey held stakes worth $19.3 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 224 in the preceding quarter worth $3.18 billion.
Investment firm Vulcan Value Partners mentioned Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter. Here is what they said:
“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Appaloosa Management’s Stake Value: $277 million
Percentage Of Appaloosa Management’s 13F Portfolio: 11.08%
Number of Hedge Fund Holders: 271
With a diverse interest in cloud computing, digital streaming, and artificial intelligence, Amazon.com, Inc. (NASDAQ:AMZN) is a multinational e-commerce and technology corporation with operations extending to over 100 countries. During Q1 2022, Appaloosa Management increased its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 22%. The hedge fund owns 85,000 Amazon.com, Inc. (NASDAQ:AMZN) shares, worth $277 million.
Earlier this May, Citi analyst Ronald Josey removed Amazon.com, Inc. (NASDAQ:AMZN) from the firm’s Focus List, citing macro uncertainty and a lack of near-term catalysts. However, he maintained a Buy rating on the shares of the company with a $4,100 price target as he believes that Amazon.com, Inc. (NASDAQ:AMZN) can gain a greater share of retail sales in a more challenged macro environment.
According to Insider Monkey’s Q1 data, Amazon.com, Inc. (NASDAQ:AMZN) was found in 271 public hedge fund portfolios, compared to 279 funds in the preceding quarter. Fisher Asset Management held a notable stake in Amazon.com, Inc. (NASDAQ:AMZN) in the first quarter of 2022, with 2.3 million shares worth $7.70 billion.
Here is what Miller Value Partners Opportunity Equity has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“For frame of reference, Amazon (NASDAQ:AMZN) bottomed at the same valuation in the financial crisis (side note: Amazon bottomed at 4x EV/GP after the tech bubble burst)! So there’s historical precedent for the lows being in. We will see whether that holds true this time. Regardless, we think there’s significant upside over a 5-year time horizon. The one other topic I want to briefly address is our volatility. We hope to write something about the topic in more depth in the future, but we want our clients and prospective investors to understand our views on it. We think that volatility is significantly misunderstood. We believe it creates opportunities from which we can profit.”
1. Alphabet Inc. (NASDAQ:GOOG)
Appaloosa Management’s Stake Value: $332.36 million
Percentage Of Appaloosa Management’s 13F Portfolio: 13.29%
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is the biggest tech holding in Appaloosa Management’s portfolio. Recognized as the parent company of Google and its subsidiaries, Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company headquartered in Mountain View, California. David Tepper’s hedge fund holds 119,000 shares of Alphabet Inc. (NASDAQ:GOOG), with a stake worth over $332.36 million as of Q1 2021.
For the first quarter of 2022, Alphabet Inc. (NASDAQ:GOOG) reported an EPS of $24.62, missing consensus estimates by $0.93. Revenue for the period came in at $68 billion, an increase of 22.95% on a year-over-year basis, and surpassed consensus estimates by $124.6 million.
Guggenheim analyst Michael Morris lowered the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,000 from $3,350 but kept a Buy rating on its shares on April 27. Although he still views the company as a top technology leader, he lowered his estimates to reflect incremental 2022 guidance headwinds that include the Russia/Ukraine conflict and unfavorable foreign exchange impacts.
158 hedge funds reported owning stakes in Alphabet Inc. (NASDAQ:GOOG) at the end of Q4 2021, as compared to 156 hedge funds in the preceding quarter. Among the hedge funds being tracked by Insider Monkey, Chris Hohn’s TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.37 million shares worth more than $6.62 billion.
Here is what Farrer Wealth Advisors has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
You can also take a look at 15 Best Semiconductor Stocks to Buy Now and 15 Best Undervalued Stocks to Buy Now.
