This article presents an overview of the 5 Best Stocks to Buy According to Billionaire D.E. Shaw. For a detailed overview of such stocks, read our article, 15 Best Stocks to Buy According to Billionaire D.E. Shaw.
5. Amazon.com Inc (NASDAQ:AMZN)
DE Shaw’s Stake: $1,364,017,951
DE Shaw owns a $1.4 billion stake in Amazon.com Inc (NASDAQ:AMZN) as of the end of 2023. Amazon.com Inc (NASDAQ:AMZN) shares have gained about 16% year to date through February 27.
Polen Global Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN), which saw significant price appreciation throughout much of 2023, saw its share price increase materially in Q4 following the company’s Q3 2023 earnings report. We have yet to see the long-awaited re-acceleration in AWS (Amazon Web Services) revenue growth. However, in our estimation, the segment’s growth has likely bottomed, and we could see accelerating growth in 2024. Further, Amazon’s e-commerce business has gradually re-accelerated from 2022’s levels and, perhaps most importantly, the company’s margins and free cash flow have rebounded materially from last year. This rebound in margins and free cash flow at Amazon has been a key component of our long-term thesis for the business, and we expect the improvement in these metrics to continue into 2024 and beyond (though perhaps not linearly) as the company continues to optimize costs and capital expenditures. Our position in Amazon reflects our positive long-term expectations of the business, and it is currently our largest absolute weight in the Portfolio.”
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
DE Shaw’s Stake: $1,367,788,793
Earlier this month, Citi quoted data from Mercury Research which shows Advanced Micro Devices, Inc. (NASDAQ:AMD) gained CPU microprocessor market share in the fourth quarter. Advanced Micro Devices, Inc. (NASDAQ:AMD) now has a 18.4% market share, while Intel lost a share of 27 basis points.
DE Shaw had a $1.9 billion stake in Advanced Micro Devices, Inc. (NASDAQ:AMD) as of the end of the fourth quarter.
White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“It is important to note that the returns depicted above actually originated in the market turmoil of 2022 and were only realized in 2023. We assess that about 75% of the returns in 2023 were derived from just 35% of the portfolio. Notably, the technology companies we acquired in 2022 – Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon, Docebo, NU, Rover – performed exceptionally well. In hindsight, the decision to allocate to technology stocks appears straightforward; but it actually demanded courage and conviction to buy and add to these stocks during the fear and uncertainty of the 2022 bear market.
The top 5 positions in the portfolio were: Precious Metals royalty basket, Nu Holdings, AMD Amazon.com and Converge Technology Services. AMD has worked out great for us but we must admit that it has gotten expensive. AI was not part of our original investment thesis and AMD is a great reminder of how one can get ‘lucky’ investing in quality businesses run by competent management teams (ditto for Amazon).”
3. NVIDIA Corp (NASDAQ:NVDA)
DE Shaw’s Stake: $1,861,273,475
De Shaw increased its hold in NVIDIA Corp (NASDAQ:NVDA) by 14% during the fourth quarter of 2023. DE Shaw has been holding a stake in NVIDIA Corp (NASDAQ:NVDA) for several years now but really started to boost its position in the GPU company in 2018.
Baron Fifth Avenue Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:
“Most of our portfolio companies have seen stabilization and modest improvements in short-term business fundamentals as the year progressed. More importantly in our view, many have been able to drive significant improvement in long-term Key Performance Indicators (KPIs) such as share gains, meaningful expansion of their total addressable market, and improvement in unit economics. These KPIs are significantly more important in driving the intrinsic values of our businesses, which we believe have increased noticeably during 2023. In the meantime, disruptive changes that we expect will benefit many of our businesses have also continued to pick up steam. Some examples include: • The inflection in GenAI: While a company like NVIDIA Corporation (NASDAQ:NVDA) is a clear beneficiary of GenAI, as its hardware and software solutions are used to train and run GenAI models, we believe that GenAI has the potential to benefit many of our other businesses as well.”
2. Apple Inc (NASDAQ:AAPL)
DE Shaw’s Stake: $1,986,452,533
DE Shaw owns a stake worth about $2 billion in Apple Inc (NASDAQ:AAPL) as of the end of 2023. Bernstein analyst Toni Sacconaghi recently talked about his expectations on Apple Inc’s (NASDAQ:AAPL) AI plans which might include an “AI” phone:
“We expect potential AI capabilities that are also largely consistent with existing products, including advanced image and video capture/editing tools, translation and transcription, enhanced messaging support, enhanced Siri and greater automation in Music, among others. We also believe that Apple will look more tightly and seamless integrate its Apps for enhanced ease of use.”
The analyst has a $195 price target and a Market Perform rating for Apple Inc (NASDAQ:AAPL).
Horizon Kinetics stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“The full point is that if BYD has turned its attention from its domestic market to direct global competition, then other Chinese companies can do the same. The next most visible example of Chinese commercially applied technological prowess relates to the 2nd highest-weight company in the S&P 500, Apple Inc. (NASDAQ:AAPL).
In September 2023, Huawei Technologies introduced its Mate 60 Pro smartphone. It uses its own, internally developed 5G enabled chip that is apparently competitive with the Apple A17 chip. For practical purposes it has the functionality of the iPhone 15 Pro. This came as a great surprise – perhaps even shock – to the U.S. technology community, because four years ago the U.S. placed strict sanctions on China’s access to state-of-the-art semiconductor manufacturing technology…” (Click here to read the full text)
1. Microsoft Corp (NASDAQ:MSFT)
DE Shaw’s Stake: $2,568,939,070
Microsoft Corp (NASDAQ:MSFT) is the biggest holding of DE Shaw since the billionaire’s fund owns a $2.6 billion stake in Microsoft Corp (NASDAQ:MSFT) as of the end of 2023.
RiverPark Large Growth Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT): MSFT was a top contributor in the quarter following strong FY1Q24 earnings in late October. In that earnings report, MSFT delivered better-than-expected revenue (+13%) and earnings (+27%), with growth in both accelerating from the prior quarter. All three major segments grew revenue faster than expected, highlighted by 28% constant currency growth in Azure, the company’s cloud offering. This marked the first quarter-over-quarter acceleration for Azure in six quarters. Operating margins (48%) were 400 basis points better than expected and earnings came in 13% ahead of expectations.
Cloud-based services have become the company’s largest revenue and earnings producer. The company’s Azure platform alone has the potential to grow to more than $100 billion in annual revenue over the next decade. Overall, we believe that the company will continue to deliver double-digit revenue and EPS growth and generate an enormous amount of free cash flow to both return to shareholders and use for acquisitions.”
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