In this article, we will discuss the 5 best tech stocks to buy now. If you want to read our comprehensive analysis of these stocks, go directly to the 10 Best Tech Stocks to Buy Now.
5. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 146
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company focusing on e-commerce and retail. The company specializes in customer-to-customer, business-to-customer, and business-to-business sales, integrated and safe online payment systems, shopping search engines, and cloud computing services.
At June end, 146 hedge funds observed by Insider Monkey were long Alibaba Group Holding Limited (NYSE:BABA), up from 135 in the previous quarter.
KeyBanc analyst Hans Chung kept an Overweight rating on Alibaba Group Holding Limited (NYSE:BABA)’s share as of October 1, but lowered the price target from $250 to $200. He expects lower Q2 growth owing to weaker than expected macro.
Polen Capital Management mentioned Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2021 investor letter. Here is what they had to say:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 155
As of the end of June, 155 hedge funds in Insider Monkey’s database were bullish on Alphabet Inc. (NASDAQ:GOOG), down from 159 in the previous quarter.
On October 12, JP Morgan analyst Doug Anmuth kept an Overweight rating on Alphabet Inc. (NASDAQ:GOOG), stating a price target of $3250. He said that company shares were up 60% year-to-date, and Alphabet Inc. (NASDAQ:GOOG) continues to be the most liked, best owned, and least discussed Big Five stock.
Alphabet Inc. (NASDAQ:GOOG) announced earnings for the second quarter on July 27. The actual EPS was $27.26, exceeding estimated EPS by $8.16. Similarly, the revenue for Alphabet Inc. (NASDAQ:GOOG) was $61.88 billion, beating estimates by $5.8 billion.
Wedgewood Partners mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 portfolio. Here is what they said:
“Alphabet’s core Google search business accelerated to multiyear highs, up nearly +70% driven in part by advertisers rushing to the Company’s Android platform. We estimate Android runs on nearly three-quarters of all smartphones; however, its share of ad spend is lower. Recent policy changes to Apple’s iOS operating system have made it more difficult for advertisers to get a return on its ad spend across the Apple ecosystem. These changes should help close the gap between Android and iOS advertising share and sustain Alphabet’s torrid growth.”
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 238
Out of the 873 hedge funds in Insider Monkey’s extensive database, 238 funds were long Microsoft Corporation (NASDAQ:MSFT), with stakes worth $62.46 billion at the end of June.
The quarterly earnings for the second quarter were announced by Microsoft Corporation (NASDAQ:MSFT) on July 27. The reported earnings per share were valued at $2.17, beating estimates by $0.24. Microsoft Corporation (NASDAQ:MSFT)’s revenue of $46.15 billion also exceeded estimates by $1.85 billion.
Baron Opportunity Fund mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q2 2021 investor letter. Here is what the fund said:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”
2. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is one of top American tech stocks to invest in. The California-based multinational technology corporation operates primarily as a social networking service, with over 2.9 billion active monthly users as of 2021.
The stock is extremely well-liked by the smart money. 266 hedge funds in Insider Monkey’s database were bullish on Facebook, Inc. (NASDAQ:FB) at the end of June, up from 257 in the previous quarter.
Mark Mahaney, an Evercore ISI analyst, kept an Outperform rating on the stock, setting a price target of $450 on October 15. However, Mahaney added Facebook, Inc. (NASDAQ:FB) to the firm’s “Tactical Underperform List”, citing tougher comps and the challenging online retail environment.
Wedgewood Partners mentioned Facebook, Inc. (NASDAQ:FB) in its Q3 2021 investor letter. Here is what they said:
“Facebook detracted from performance despite posting a staggering +56% growth in advertising revenues. Much of the stock’s underperformance was driven by non operating concerns that we view as mostly political in nature. The Company’s digital properties command a massive audience of over 2.7 billion daily users, so any government or state actor would be able to wield tremendous power by controlling that audience and it should not be a surprise when those actors attempt to do that. However, Facebook has invested aggressively in its content curation capabilities that address many of the concerns raised by media and political critics. We continue to carry Facebook at our maximum weighting as the stock is trading in line with a market multiple despite unrivaled competitive positioning and rapid growth, representing one of the best risk-rewards available in the market.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is a highly sought-after tech stock by hedge funds. The American tech multinational specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon.com, Inc. (NASDAQ:AMZN) is the most popular tech stock amongst hedge funds. At the end of June, of the hedge funds tracked by Insider Monkey, 271 funds were long Amazon.com, Inc. (NASDAQ:AMZN), up from 243 in the previous quarter.
Baird analyst Colin Sebastian kept an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) on October 13, setting the price target at $4000. Even though the future outlook of the company was positive, according to Sebastian, Q4 and 2022 earnings would be lower due to an increase in labor costs, logistics and transportation expenses, product costs, and expensive technology infrastructure.
Worm Capital LLC mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what they said:
“Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
Amazon, for instance, accumulates marginal gains by compressing their costs year after year for consumers, creating an infrastructure and logistics network unrivaled by its peers. In the short-term, the market can often misunderstand the intentions of the “marginal gain accumulators,” but over time, their value-creation becomes obvious in hindsight.”
You can also take a look at 11 Best Penny Stocks To Buy According To Hedge Funds and 10 Stocks in the Limelight After Earnings Reports.
