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

In this piece, we will take a look at the 5 best software stocks to buy now according to Coatue Management’s 13F portfolio. If you want to read our overview of Coatue Management’s 13F Portfolio, then you can take a look at the 15 Best Software Stocks to Buy Now According to Coatue Management’s 13F Portfolio.

5. Oracle Corp (NYSE:ORCL)

Number of Hedge Fund Holders: 88
Coatue Management’s Equity Stake: $236.85 Million

Oracle Corporation (NYSE:ORCL) provides IT solutions and cloud software, such as Oracle Fusion ERP and EPM. Oracle Corporation (NYSE:ORCL) is billed as one of the largest database software companies that has transformed lots of its software into cloud-based services. 

While the stock is up by about 29% for the year, it’s proved to be a top pick for investors eying passive income. In the year’s first half, it bought $600 million worth of shares and returned $2.2 billion in dividends. It is also one of the best software stocks to buy now according to Coatue Management. The hedge fund held stakes worth $236.85 million in Oracle Corporation (NYSE:ORCL) as of Q3 2023.

Insider Monkey found out that 88 hedge funds had stakes in the firm after examining 910 hedge funds’ shareholdings for Q3 2023. Oracle Corporation (NYSE:ORCL)’s most significant investor in our database is Ken Fisher’s Fisher Asset Management as it owns $1.99 billion worth of shares.

Here is what Aristotle Atlantic Core Equity Strategy said about Oracle Corporation (NYSE:ORCL) in its third quarter 2023 investor letter:

“Oracle Corporation (NYSE:ORCL) provides products and services that address enterprise information technology (IT) environments. The company’s products and services include enterprise applications and infrastructure offerings that are delivered worldwide through a variety of flexible and interoperable IT deployment models. The company operates in three segments: cloud and license business, hardware, and services.

We believe Oracle’s cloud infrastructure product, OCI 2.0, continues to demonstrate strong revenue growth over several quarters. Additionally, we see the rapid growth of artificial intelligence (AI) computing needs as being a differentiated growth driver for Oracle. We believe that Oracle will continue to drive positive outcomes for the Cerner business through a better margin structure, as well as topline sales synergies.”

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4. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 69
Coatue Management’s Equity Stake: $306.48 Million

Shopify Inc. (NYSE:SHOP) is a company that offers software for online and mobile commerce. Shopify Inc. (NYSE:SHOP) stock doubled in value in 2023 after a 123% rally. The rally came on solid underlying fundamentals, with 25% revenue growth in Q3. 

Shopify Inc. (NYSE:SHOP)’s subscription sales are also on a roll, helped by higher demand and rising prices. Shopify Inc. (NYSE:SHOP) is one of the latest additions to Coatue Management’s portfolio, acquiring $306.48 million worth of stakes in Q3 2023.

As of Q3 2023, 69 of the 910 hedge funds tracked by Insider Monkey owned shares of Shopify Inc. (NYSE:SHOP), valued at $2.72 billion. 

This is what Baron Funds, an investment management firm, said about Shopify Inc. (NYSE:SHOP) in its Q3 2023 investor letter:

“[W]e believe that Shopify will continue to benefit from its position as the commerce operating system for its merchants. Rather than replacing Shopify, various selling channels, including TikTok, are managed within the platform, which should enable Shopify to maintain its competitive advantage over the long term [. . .] We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth, as it still holds less than a 2% share of the global commerce market.”

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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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2. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 86
Coatue Management’s Equity Stake: $767.03 Million

Intuit Inc. (NASDAQ:INTU) is a technology company that offers financial management and compliance products and services. It offers software for accounting, such as QuickBooks online and desktop.

Intuit Inc. (NASDAQ:INTU) remains the go-to company for small and medium-sized businesses that need help managing financial needs with speedy tax preparation software. Coatue Management increased its stake holdings in Intuit Inc. (NASDAQ:INTU) by 167% in Q3 2023 to $767.03 million.

At the end of September, there were 86 funds tracked by Insider Monkey that held shares of Intuit Inc. (NASDAQ:INTU) with a total value of $6.15 billion.

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1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 306
Coatue Management’s Equity Stake: $1.21 Billion

Microsoft Corporation (NASDAQ:MSFT) is one of the best software stocks to buy now according to Coatue Management’s 13F portfolio, as a market leader in the sector. Microsoft Corporation (NASDAQ:MSFT) offers an array of software suites, including Office, Exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft Viva, and Microsoft 365 Copilot. 

Microsoft Corporation (NASDAQ:MSFT) remains one of the top software plays for gaining exposure to the artificial intelligence revolution. The company has already invested $13 billion in ChatGPT parent OpenAI. The stock is up by over 53% for the year. Coatue Management trimmed its stake in Microsoft Corporation (NASDAQ:MSFT) by 28% in Q3 2023 to $1.21 billion.

Out of the 910 hedge funds that Insider Monkey tracks, 306 of them had stakes in Microsoft Corporation (NASDAQ:MSFT) in Q3 2023. The largest stakeholder of the firm was Bill & Melinda Gates Foundation Trust , which Michael Larson manages. They had a stake worth $12.4 billion.

In its Q3 2023 investor letter, White Brook Capital Partners referenced Microsoft Corporation (NASDAQ: MSFT). Here is what it said:

“The magnificent seven, that underpin the S&P 500 performance, which includes Microsoft Corporation (NASDAQ:MSFT), now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”

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Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get  the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on These Stocks under $10 Are Poised To Explode and 15 Best Dividend Stocks to Buy According to Warren Buffett.