5 Best Software Stocks to Buy Now According to Coatue Management’s 13F Portfolio

3. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 112
Coatue Management’s Equity Stake: $628.28 Million

Adobe Inc. (NASDAQ:ADBE) is a diversified software company offering products and services that enable individual teams and enterprises to create, publish, and promote content. Adobe Inc. (NASDAQ:ADBE) remains one of the best software stocks to buy now according to Coatue Management, as it is profitable and continues to post robust revenue and earnings growth. 

In Q3, revenues were up 12%, with net income increasing by 26%. Adobe Inc. (NASDAQ:ADBE)’s sentiments have also improved on abandoning the $20 billion acquisition of Figma. Coatue Management increased its stakes in Adobe Inc. (NASDAQ:ADBE) by 24% in Q3 2023 to $628.28 million.

Adobe Inc. (NASDAQ:ADBE) had 112 hedge funds as shareholders in Q3 2023, out of the 910 hedge funds that Insider Monkey tracks. Ken Fisher’s Fisher Asset Management was the leading shareholder as it owned $2.32 billion worth of shares.

Here is what Polen Capital said about Adobe Inc. (NASDAQ:ADBE) in its third-quarter 2023 investor letter. 

“Both Alphabet and Adobe’s businesses continue to perform well. With respect to Adobe, the most recent quarter delivered more of the same with constant currency revenue growing 13%, margin expansion, and over 2% of shares outstanding repurchased for non-GAAP earnings growth of over 20%. We believe its approach to GenAI through Firefly, which guarantees safe content because it trains on Adobe Stock, will continue to be attractive to enterprises. The counter to GenAI, and something we are keeping an eye on with Alphabet and Adobe, is that it requires heavy investment. While both businesses can leverage their scale and manage costs in other areas, we expect the investment in future growth through GenAI will weigh on company-wide margins over the near term.”

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