5 Best Adtech Stocks To Buy According To Hedge Funds

In this article, we discuss 5 best adtech stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 10 Best Adtech Stocks To Buy According To Hedge Funds. 

5. Digital Turbine, Inc. (NASDAQ:APPS)

Number of Hedge Fund Holders: 24

Digital Turbine, Inc. (NASDAQ:APPS) is a Texas-based company that runs a mobile growth platform for advertisers, publishers, carriers, and device original equipment manufacturers. The company operates through three segments – On Device Media, In App Media AdColony, and In App Media Fyber.

On November 10, Craig-Hallum analyst Anthony Stoss maintained a Buy recommendation on Digital Turbine, Inc. (NASDAQ:APPS) but lowered the firm’s price target on the shares to $30 from $60 following better-than-feared Q3 results and guidance. The analyst believes resilient profitability margins make this a stock to own in a weak macro. He also sees home run potential with SingleTap.

According to Insider Monkey’s data, 24 hedge funds were bullish on Digital Turbine, Inc. (NASDAQ:APPS) at the end of September 2022, compared to 27 funds in the prior quarter. Scott Stewart Miller’s Greenhaven Road Investment Management is the largest stakeholder of the company, with 1.15 million shares worth $16.5 million. 

Greenhaven Road Capital made the following comment about Digital Turbine, Inc. (NASDAQ:APPS) in its Q3 2022 investor letter:

“Secondly, with the benefit of hindsight, Digital Turbine, Inc. (NASDAQ:APPS) should have been sized smaller. The combination of the cyclical nature of the advertising business, the execution risk in combining companies, and the fact that too large a portion of 2022 growth was to come from two customers (AT&T and Verizon) created many potential air pockets that have had a negative impact.”

4. The Interpublic Group of Companies, Inc. (NYSE:IPG)

Number of Hedge Fund Holders: 30

The Interpublic Group of Companies, Inc. (NYSE:IPG) is a New York-based provider of advertising and marketing services worldwide. It operates in two segments, Integrated Agency Networks (IAN) and IPG DXTRA. The Interpublic Group of Companies, Inc. (NYSE:IPG) is one of the best adtech stocks to buy according to hedge funds. The company paid a $0.29 per share quarterly dividend to shareholders on December 15. 

On October 14, JPMorgan analyst David Karnovsky said he sees attractive risk/reward profiles on the advertising agencies heading into the Q3 results and reiterated an Overweight rating on The Interpublic Group of Companies, Inc. (NYSE:IPG) with a price target of $38. 

According to Insider Monkey’s third quarter database, 30 hedge funds were bullish on The Interpublic Group of Companies, Inc. (NYSE:IPG), with combined stakes worth $595 million, compared to 30 funds in the prior quarter worth $566 million. Harris Associates is the leading stakeholder of the company, with 14.1 million shares worth $361.2 million. 

Here is what Ariel Fund & Ariel Appreciation Fund has to say about The Interpublic Group of Companies, Inc. (NYSE:IPG) in its Q3 2021 investor letter:

“Marketing communication company, Interpublic Group of Companies, Inc. (IPG) was the top contributor over the trailing one-year period. Notably, IPG is delivering a stronger than expected revenue mix between Technology and Healthcare relative to its peer group, solid cost containment and margin expansion. Meanwhile, the company continued to focus on de-levering the balance sheet. In our view, IPG’s Acxiom acquisition for data has proven to be a winner, helping the company increase their revenue across all eight major advertising sectors by industry. We believe these results continue to demonstrate the strength and resiliency of the business model and expect IPG to be a beneficiary of increasing advertising and marketing budgets across an improving global economy.”

3. The Trade Desk, Inc. (NASDAQ:TTD)

Number of Hedge Fund Holders: 37

The Trade Desk, Inc. (NASDAQ:TTD) is a California-based technology company that operates a self-service cloud platform that allows buyers to create, manage, and optimize data-driven digital advertising campaigns across different ad formats and channels, including display, video, audio, native, and social. The Trade Desk, Inc. (NASDAQ:TTD) is one of the top adtech stocks to invest in. On November 9, the company reported a Q3 non-GAAP EPS of $0.26 and a revenue of $394.77 million, outperforming Wall Street estimates by $0.03 and $8.24 million, respectively. 

On December 20, Piper Sandler analyst Matt Farrell initiated coverage of The Trade Desk, Inc. (NASDAQ:TTD) with an Overweight rating and a $60 price target. The Trade Desk, Inc. (NASDAQ:TTD) is a leading, independent demand side platform that allows media buyers to bid on programmatic ad impressions in digital settings, the analyst told investors in a research note. 

According to Insider Monkey’s data, 37 hedge funds were bullish on The Trade Desk, Inc. (NASDAQ:TTD) at the end of Q3 2022, compared to 34 funds in the prior quarter. D E Shaw is the largest stakeholder of the company, with 3.90 million shares worth $233 million. 

Here is what Baron Funds specifically said about The Trade Desk, Inc. (NASDAQ:TTD) in its Q3 2022 investor letter:

“The Trade Desk, Inc. (NASDAQ:TTD) is the leading internet advertising demand-side platform, enabling agencies and companies to buy and track digital advertising. The company reported 35% growth in sales, a terrific result in a softening advertising market, and the shares rose. EBITDA margins were 37% in the quarter, and cash flow also beat expectations. The company is benefiting from the growth in advertising on Connected TV and advertisers’ desire to work with Trade Desk, as a neutral service provider, as opposed to Google who does not share critical data with its partners/advertisers. Also, Netflix announced that it would be offering a tier of service that includes advertising, which is a seminal moment in the development of digital advertising and a big growth opportunity for Trade Desk. Though it is an expensive stock on near-term estimates, we believe Trade Desk can continue to compound its EBITDA and EPS at a 25% to 30% clip into the future, creating significant value in time.”

2. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 115

Netflix, Inc. (NASDAQ:NFLX) provides entertainment services and the company decided in 2022 to offer an ad-supported tier and allow advertisers the chance to run commercials alongside shows. It is one of the premier adtech stocks to buy according to hedge funds. The new ad-supported plan, which costs $6.99 per month, accounted for 9% of new Netflix sign-ups in the U.S. during November 2022. 

On December 19, Morgan Stanley analyst Benjamin Swinburne raised the price target on Netflix, Inc. (NASDAQ:NFLX) to $275 from $250 and kept an Equal Weight rating on the shares. The analyst said the launch and potential of the ad-tier and paid sharing have allowed Netflix, Inc. (NASDAQ:NFLX) shares to “nicely outperform since July” as consensus net adds expectations have lifted.

According to Insider Monkey’s data, Netflix, Inc. (NASDAQ:NFLX) was part of 115 hedge fund portfolios at the end of Q3 2022, up from 95 in the earlier quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with 6.7 million shares worth $1.6 billion. 

Harding Loevner made the following comment about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2022 investor letter:

“Netflix, Inc. (NASDAQ:NFLX) mustered a modest recovery as the market Allocation Effect: 0.3 mulled the potential of its new lower-priced ad-supported subscription model to drive revenue growth and reduce its dependency on continued heavy investment in content to attract and retain viewers.”

1. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 156

Alphabet Inc. (NASDAQ:GOOG) is an American Big Tech firm that operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment offers products and services, including ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is one of the most popular adtech stocks to invest in. 

On December 22, Piper Sandler analyst Thomas Champion said he views the news of the National Football League announcing a multi-year agreement with Alphabet Inc. (NASDAQ:GOOG)’s YouTube for rights to the NFL Sunday Ticket as a positive and it will likely accelerate the push toward over-the-top time spent and ad dollars moving to streaming. He reiterated an Overweight rating and a $122 price target on Alphabet Inc. (NASDAQ:GOOG) shares.

According to Insider Monkey’s third quarter database, 156 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 153 funds in the last quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 52.4 million shares worth $5 million. 

Here is what Stewart Asset Management has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:

“We invest in businesses with strong, resilient earnings growth which are less cyclical. In the pandemic recession of 2020, the aggregate earnings of the portfolios we manage did not decline year-over-year, and in fact grew, albeit modestly. Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. Alphabet (NASDAQ:GOOG), then called Google, reported earnings that doubled from 2007 to 2010.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Most Advanced Countries in Electronics and 12 Biggest Metaverse Companies in the World.