In this article, we discuss 5 best tech stocks to buy now according to Joe Dimenna’s Zweig-DiMenna Partners. If you want to read our detailed analysis of Dimenna’s history, investment philosophy, and hedge fund performance, go directly to 10 Best Tech Stocks to Buy Now According to Joe Dimenna’s Zweig-DiMenna Partners.
5. Alphabet Inc. (NASDAQ:GOOG)
Zweig-DiMenna Partners’ Stake Value: $14,282,000
Zweig-DiMenna Partners’ 13F Portfolio: 1.9%
Number of Hedge Fund Holders: 158
Alphabet Inc. (NASDAQ:GOOG), based in Mountain View, California, is an American global technology conglomerate holding corporation. Zweig-DiMenna Partners reduced its hold in Alphabet Inc. (NASDAQ:GOOG) by 23% in the first quarter, ending the period with 5,135 shares of the company. The fund had a $14.28 million stake in the company.
Fisher Asset Management revealed a significant stake in Alphabet Inc. (NASDAQ:GOOG) in Q1 2022, worth roughly $5.63 billion. Overall, 158 hedge funds tracked by Insider Monkey held long positions in the company in Q4 2021, up from 156 in the previous quarter. The total stakes owned exceeded $36.63 billion.
Alphabet Inc. (NASDAQ:GOOG) purchased Raxium, a pioneer in single panel MicroLED display technology, on May 5. After Alphabet Inc. (NASDAQ:GOOG) reported a relatively mixed Q1, Wells Fargo analyst Brian Fitzgerald cut his price objective on the stock to $3,400 from $3,600 to reflect deteriorating industry values but assigned an Overweight rating to the shares on April 27.
In its Q4 2021 investor letter, Vulcan Value Partners highlighted a few stocks, and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”
4. Apple Inc. (NASDAQ:AAPL)
Zweig-DiMenna Partners’ Stake Value: $17,082,000
Zweig-DiMenna Partners’ 13F Portfolio: 2.27%
Number of Hedge Fund Holders: 134
Apple Inc. (NASDAQ:AAPL) is a global technology firm based in the United States, specializing in consumer goods, software, and online services. In the first quarter of 2022, Zweig-DiMenna Partners held 97,827 shares of Apple Inc. (NASDAQ:AAPL). These were worth $17.08 million and accounted for 2.27% of its portfolio.
On May 2, Rosenblatt analyst Barton Crockett slashed his price target on Apple Inc. (NASDAQ:AAPL) to $168 from $184 and maintained a Neutral rating on the shares. Crockett stated that the company’s March quarter report was encouraging but tempered by estimates of larger supply interruptions in the June quarter.
Insider Monkey’s data showed that hedge fund interest increased in Apple Inc. (NASDAQ:AAPL) in Q4. 134 hedge funds tracked by Insider Monkey held long positions in Apple Inc. (NASDAQ:AAPL) in Q4, up from 120 in the previous quarter. These funds hold a consolidated stake of about $186 billion, showing considerable growth from $146 billion in the preceding quarter.
Here is what Berkshire Hathaway has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:
“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its year end market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Zweig-DiMenna Partners’ Stake Value: $17,110,000
Zweig-DiMenna Partners’ 13F Portfolio: 2.28%
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) delivers graphics, computation, and networking technologies in the United States, Taiwan, China, and globally. On May 3, Morgan Stanley analyst Joseph Moore initiated coverage of NVIDIA Corporation (NASDAQ:NVDA), maintaining an Equal Weight rating and a price objective of $217.
In the first quarter of 2022, Zweig-DiMenna Partners trimmed its position in NVIDIA Corporation (NASDAQ:NVDA) by 57% to 62,705 shares, accounting for 2.28% of the overall portfolio. The fund first bought a stake in NVIDIA Corporation (NASDAQ:NVDA) in the fourth quarter of 2012.
By the end of Q4 2021, the number of hedge funds tracked by Insider Monkey holding stakes in NVIDIA Corporation (NASDAQ:NVDA) grew significantly to 110 from 83 in the previous quarter. The collective stakes in Q4 were valued at $10.49 billion.
In its Q1 2022 investor letter, RiverPark Long/Short Opportunity Fund mentioned NVIDIA Corporation (NASDAQ:NVDA). Here is what the fund said:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
2. Microsoft Corporation (NASDAQ:MSFT)
Zweig-DiMenna Partners’ Stake Value: $17,154,000
Zweig-DiMenna Partners’ 13F Portfolio: 2.28%
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is a tech firm. The firm creates and maintains a variety of software products, devices, and solutions. According to Insider Monkey’s Q4 data, 262 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 250 funds in the prior quarter. In Q4 2021, the total value of stakes owned was $75.67 billion.
Following Microsoft Corporation (NASDAQ:MSFT)’s fiscal Q3 report on April 27, Morgan Stanley analyst Keith Weiss initiated coverage of the stock, maintaining an Overweight rating and a $372 price target. With 55,638 shares valued at $17.15 million, Microsoft Corporation (NASDAQ:MSFT) accounts for 2.28% of the Q1 13F portfolio of Zweig-DiMenna Partners.
In its Q4 2021 investor letter, Vulcan Value Partners highlighted a few stocks, and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT) was a material contributor during the quarter. It is one of the highest quality companies in the world. We believe it has tremendous competitive advantages in its consumer and commercial Microsoft Office products as well as in its server and tools and Azure divisions. Over the last several years, Microsoft Corporation (NASDAQ:MSFT) has been implementing a successful transition from a traditional software license and maintenance revenue model to a subscription revenue model. The company remains competitively entrenched, produces strong free cash flow, and has a strong balance sheet.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Zweig-DiMenna Partners’ Stake Value: $24,205,000
Zweig-DiMenna Partners’ 13F Portfolio: 3.22%
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Big Five American tech giants. IBM (NYSE:IBM) declared on May 11 that it signed a Strategic Collaboration Agreement (SCA) with Amazon Web Services, Inc. (AWS) to deliver a wide range of its software portfolio as a SaaS offering on AWS.
In the first quarter of 2022, Zweig-DiMenna Partners held 7,425 shares of Amazon.com, Inc. (NASDAQ:AMZN) valued at $24.21 million, accounting for 3.22% of its 13F portfolio. Fisher Asset Management is a notable shareholder of Amazon.com, Inc. (NASDAQ:AMZN) among the hedge funds monitored by Insider Monkey, with 2.36 million shares valued more than $7.70 billion.
Amazon.com, Inc. (NASDAQ:AMZN) is the most popular stock among the 924 hedge funds tracked by Insider Monkey. As of the end of the fourth quarter of 2021, 279 funds had stakes in Amazon.com, Inc. (NASDAQ:AMZN). The total value of these stakes was $49.16 billion.
Here is what Farrer Wealth Advisors said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon: We had a medium-sized position in Amazon which we exited after the company released its earnings. We thought earnings on aggregate were just fine and were especially impressed to see AWS (Amazon Web Services) start to reaccelerate its growth, up nearly 40% yoy. However, looking beneath the hood a little bit, we noticed a significant slowdown in the 1P and 3P ecommerce businesses that enjoyed a nice covid-bump in previous quarters. The international business also saw negative yoy growth as the covid bump deflated and competition heat up in markets such as Southeast Asia, Latin America, and India. None of these issues individually were a huge cause for concern, but they did force us to lower our internal projections. Given this, we felt the internal rate of return (“IRR”) baked into the price post-earnings was not particularly attractive given other opportunities available, and so, we exited the position. None of this is to say that Amazon is in any trouble, and we believe current investors will do just fine over time. We remain big fans of the companies and think Prime and AWS may be some of the best businesses ever created, so we reserve the right to buy back the position at cheaper valuations (or at a higher potential IRR).”
You can also take a peek at 10 Stocks to Invest In Now According to Viraj Mehta’s Arctis Global and 10 Stock Picks of Rishi Bajaj’s Altai Capital
