In this article, we discuss the 5 best tech stocks to buy according to billionaire Ken Griffin. For Griffin’s investment philosophy and his comments on certain stocks, please see 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin.
5. Uber Technologies, Inc. (NYSE: UBER)
Value: $518,494,000
Percent of Ken Griffin’s 13F Portfolio: 0.14%
No. of Hedge Fund Holders: 135
Uber is one of the best tech stocks to buy, based on billionaire Ken Griffin’s Q4 portfolio. Uber’s business Uber Eats is seeing record revenues worldwide as stay-at-home orders are continuing to fuel demand of the food delivery app. Recently, Jefferies initiated a Buy rating for the stock with a $75 price target. The firm believes Uber’s ride-sharing business will fully recover by 2023.
As of the end of the fourth quarter of 2020, Altimeter Capital Management owns 28.4 million shares of UBER worth $1.4 billion. UBER accounts for 13.4% of Altimeter Capital’s total portfolio. Uber ranks 12th in our list of the 30 Most Popular Stocks Among Hedge Funds.
In their Q4 2020 investor letter, RiverPark Advisors, LLC highlighted a few stocks and Uber Technologies Inc (NYSE:UBER) is one of them. Here is what the fund said:
“UBER was also a strong contributor, as shares rallied following the approval of California’s Proposition 22 by voters, allowing the company’s California-based drivers to remain independent contractors (rather than become more expensive employees). We believe this news is not just about the 10%-15% of Uber’s revenue tied to California, but the influence this will have on other states reassessing driver pay. UBER also reported strong third quarter results with Delivery Gross Bookings growing 135% year-over-year which nearly fully offset a reduction in Mobility Gross Bookings, which were down 50% year over year. Total Gross Bookings for the quarter were down only 10% year over year as compared with down 35% last quarter.
Despite the COVID disruption, UBER remains the undisputed global leader in ride sharing (44% of the Company’s third quarter revenue), with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery (46% of revenue), where it is number one or two in the more than 25 countries in which it operates. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 100 million users (by comparison, Amazon Prime has 130+ million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage and worker staffing for shift work. At its current $96 billion market capitalization, UBER trades at only 6x next year’s revenue from its two core businesses. Additionally, the company has substantial, seemingly unrecognized, value in its several nascent development businesses and another $12 billion in equity stakes in synergistic businesses around the world.”
4. Alphabet Inc. (NASDAQ: GOOG)
Value: $534,112,000
Percent of Ken Griffin’s 13F Portfolio: 0.14%
No. of Hedge Fund Holders: 157
Ken Griffin’s Citadel is bullish on Alphabet. The stock is up 87% over the last 12 months. Investment firm Stifel recently turned bullish in Alphabet (GOOG,GOOGL), citing a “speedy” recovery in the search giant’s digital advertising business. The firm also likes the stock on the back of several secular growth trends, including the digitization of small and large businesses, increased margins and operating leverage. Stifel increased its price target for the stock to $2350 from $2025.
As of the end of the fourth quarter, 157 hedge funds in Insider Monkey’s database of 887 funds held stakes in GOOG, compared to 150 funds in the third quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder in the company, with 2.95 million shares, worth $5.2 billion. Based on our calculations, Alphabet Inc. (GOOG) ranks 6th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Weitz Investment Management, in their Q4 2020 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Weitz Investment Management has to say about Alphabet Inc. in their Q4 2020 investor letter:
“Despite mounting regulatory scrutiny, Alphabet was the Fund’s largest contributor for the year. The stock rose materially as Google’s digital advertising businesses continued to chug along.”
3. T-Mobile US, Inc. (NASDAQ: TMUS)
Value: $553,320,000
Percent of Ken Griffin’s 13F Portfolio: 0.15%
No. of Hedge Fund Holders: 103
Telecom giant T-Mobile ranks 3rd in the list of billionaire Ken Griffin’s most favorite tech stocks. The stock is up 50% over the last 12 months. The company would be one of the biggest beneficiaries of the upcoming 5G revolution. T-Mobile is also planning to expand its broadband and cable reach to over 20 million customers mostly living in rural America.
Andreas Halvorsen’s Viking Global currently holds 8.7 million shares of TMUS, worth $1.2 billion. TMUS occupies 3.22% of Viking Global’s total portfolio. Our calculations show that TMUS ranks 20th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Schroder Investment Management mentioned in one of their investor letters that they are hopeful for T-Mobile US, Inc. (NASDAQ: TMUS)’s growth. Here is what Schroder Investment Management has to say about T-Mobile US, Inc. in their investor letter:
“T-Mobile US, Inc.’s (“TMUS”) 2020 merger with Sprint Corporation (“Sprint”) was transformational. The company now controls c.45% of low/mid-band spectrum (which is crucial for 5G) but has only 29% of industry subscribers. We expect this gap to narrow over time, via market share gains, while the deal will also generate significant merger synergies; TMUS should, consequently, achieve substantial profits and free cash flow growth over the next 3-4 years.
TMUS has, hitherto, had an inferior network to its peers, and achieved its subscriber growth via very effective marketing and lower prices, encapsulated in its ‘un-carrier’ approach.
In the 5G era, however, it will have a much better network than its peers – as well as lower prices – because it has more of the critical mid-band (2.5GHz) spectrum than AT&T Inc. (“T”) and Verizon Communications Inc. (“VZ”) combined.
The value of this advantage is reflected in the very aggressive C-Band auction currently underway, in which all three companies have likely spent heavily; T and VZ to supplement their holdings of the key enabling asset for the new 5G era, and TMUS to reinforce its advantage and force its peers to leverage up, so they will be less likely to compete on price. The proceeds from this auction have already reached $81bn (and will entail further substantial spending to ready it for use).
Thus, TMUS is targeting the rollout of its 2.5GHz spectrum across 100mn and 200mn POPs by the end of 2020 and 2021 respectively; this will allow it to offer average speeds of 300Mbps (peak speeds >1Gbps) to subscribers (using only 60MHz of the total 160MHz it owns). Its coverage/offer will be far superior to the competition: T’s standard 5G speeds are 40-60Mbps (i.e. barely faster than 4G LTE); VZ’s 5G ultra-wideband network will offer faster speeds (in theory up to multi-Gbps) but currently covers only 2mn POPs, and is difficult to scale because the mmWave spectrum, on which it relies, propagates only over very short distances and is subject to interference (e.g. by foliage).
It is unlikely that the C-band auction will allow T/VZ to rectify their considerable spectrum lag relative to TMUS: 280MHz is being sold, and VZ requires c.190MHz and T c.150MHz to match TMUS. And the spectrum will take considerable time to clear and be deployed (120MHz clears in December 2021 and 160MHz in December 2023). It is also worth noting C-Band is not nearly as good as TMUS’ 2.5GHz – it has weaker propagation characteristics, thus requiring a much denser network grid which is more costly.
2. Microsoft Corporation (NASDAQ: MSFT)
Value: $576,472,000
Percent of Ken Griffin’s 13F Portfolio: 0.15%
No. of Hedge Fund Holders: 258
Telecom giant T-Mobile ranks 2nd in the list of billionaire Ken Griffin’s most favorite tech stocks. The stock is up 50% over the last 12 months. The company would be one of the biggest beneficiaries of the upcoming 5G revolution. T-Mobile is also planning to expand its broadband and cable reach to over 20 million customers mostly living in rural America.
As of the end of the fourth quarter, 258 hedge funds in Insider Monkey’s database of 887 funds held stakes in Microsoft, compared to 234 funds in the third quarter. Fisher Asset Management is the biggest stakeholder in the company, with 23.4 million shares, worth $5.2 billion. Our calculations show that MSFT ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds.
1. Facebook, Inc. (NASDAQ: FB)
Value: $839,157,000
Percent of Ken Griffin’s 13F Portfolio: 0.22%
No. of Hedge Fund Holders: 242
Facebook tops the list of the 10 best stocks to buy according to billionaire Ken Griffin. Recently, Deutsche Bank recently upped its forecasts for Facebook, citing an upbeat ad spending, delays in Apple’s iOS privacy changes and the company’s pivot towards becoming an ecommerce platform. The firm raised its price target for FB stock to $385 from $355.
According to our database, the number of Facebook’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 242 hedge funds that hold a position in FB compared to 230 funds in the third quarter. The biggest stakeholder of the company is Masayoshi Son’s SB Management, with 12 million shares, worth $3.3 billion. Based on our calculations, Facebook ranks 3rd in our list of the 30 Most Popular Stocks Among Hedge Funds.
You can also take a peek at Tiger Cub Billionaire Stephen Mandel’s Top 10 Stock Picks and David Einhorn’s Top 10 Stock Picks.
