In this article, we discuss the 5 blue chip stocks hedge funds love. In order to read our detailed analysis of blue chip stocks and the current market situation, go directly to 10 Blue Chip Stocks Hedge Funds Love.
5. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is up next on the list of best blue chip stocks that hedge funds love. The California-based firm provides payment technologies and services to users, merchants and businesses around the world. As of the end of the first quarter of 2022, 159 hedge funds owned positions in Visa Inc. (NYSE:V) with an aggregate value of $28.07 billion. This shows a positive trend from the preceding quarter, where 142 hedge funds were stakeholders in the payment technology firm.
In the first quarter, Visa Inc. (NYSE:V) reported earnings per share of $1.79, outperforming analysts’ estimates by $0.14. Revenue of $7.19 billion for the quarter showed growth of 25.48% in comparison to the same period over last year, and exceeded analysts’ estimates by $366.9 million.
On May 17, Goldman Sachs analyst Will Nance initiated coverage of Visa Inc. (NYSE:V) with a ‘Buy’ rating, and placed the stock on the firm’s ‘Americas Conviction List’. He set his price target at $282, implying a 43% upside. Nance sees the firm as a global leader with “attractive leverage to the long-term secular growth driver from payment electronification.”
Baron Funds, an investment firm, discussed the performance and future prospects of Visa Inc. (NYSE:V) in its Q1 2022 investor letter. Here is what it said:
“Shares of global payment network Visa, Inc. (NYSE:V) were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is the tech giant behind Google and its affiliated platforms including Gmail, Google App Store and YouTube, among others. The number of bullish hedge fund bets on Alphabet shares increased in the first quarter of 2022, where 160 hedge funds were stakeholders in the company as compared to 158 hedge funds a quarter earlier.
On June 1, Morgan Stanley analyst Brian Nowak reiterated an ‘Overweight’ rating on Alphabet Inc. (NASDAQ:GOOG) shares, and slashed the price target to $3,000 from $3,270. Owing to the “rising macro and micro uncertainty,” the analyst lowered estimates across the internet space to reflect a slowdown in advertising and e-commerce. Alphabet Inc. (NASDAQ:GOOG) shares have suffered lately as the market abandons tech stocks, losing 19.15% in value in the year to date as of June 8.
Alphabet Inc.’s (NASDAQ:GOOG) revenue for the first quarter was recorded at $68 billion, signaling a jump of 22.95% from the year-ago quarter, and outperforming estimates by $124.6 million. EPS was reported below Street estimates by $0.93, coming in at $24.62.
Baron Funds, an investment firm, mentioned many stocks in its Q1 2022 investor letter, and Alphabet Inc. (NASDAQ:GOOG) was one of them. The fund said:
“We have modestly reduced the size of our position in Alphabet Inc. (NASDAQ:GOOG) (from 6.5% at the end of the fourth quarter of 2021 to 5.3% as of the end of the first quarter of 2022), after the stock rallied 64% in 2021 and continued outperforming during the first quarter, declining just 3%.”
3. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 200
Meta Platforms, Inc. (NASDAQ:FB) is a diversified technology conglomerate which operates popular social media platforms Facebook, Instagram, and WhatsApp.
The company recently announced a high-level staff shakeup, with long-time COO Sheryl Sandberg set to resign this fall. Citi analyst Ronald Josey notes that the company also announced plans to better integrate its Product and Business groups, which the he believes will improve decision making and time-to-market for Meta’s products. Josey kept a ‘Buy’ rating and a $300 price target on Meta Platforms, Inc. (NASDAQ:FB) shares, noting that the firm’s growth should pick up in the second half of 2022, as it manages profitability by slowing down the pace of its longer-term investments.
200 hedge funds were long Meta Platforms, Inc. (NASDAQ:FB) at the end of Q1 2022, with collective stakes worth $19.33 billion. This is down from 224 hedge funds a quarter ago. With a stake consisting of 11.19 million shares worth $2.49 billion, Fisher Asset Management was the top shareholder of Meta Platforms, Inc. (NASDAQ:FB) in the first quarter of 2022.
Meta Platforms, Inc. (NASDAQ:FB) reported earnings per share of $2.72 for the first quarter, beating market estimates by $0.21. However, revenue of $27.91 billion for the quarter fell below analysts’ forecasts by nearly $314 million.
Here is what Vulcan Value Partners had to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:
“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) is up next on our list of blue chip stocks that hedge funds love. A total of 259 hedge funds were long on the company shares at the end of March, down from 262 hedge funds a quarter earlier. Fisher Asset Management increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 4% in the first quarter, thereby owning 27.87 million shares worth $8.59 billion.
On June 2, Microsoft Corporation (NASDAQ:MSFT) was given a ‘Buy’ rating by Stifel analyst Brad Reback, who lowered the price target to $320 from $350 on account of multiple contraction and the firm’s updated guidance which reflects a more pessimistic foreign exchange environment through May. However, the analyst maintained his bullish thesis citing secular tailwinds and a growing total addressable market.
Microsoft Corporation’s (NASDAQ:MSFT) earnings per share for the first quarter beat estimates by $0.02. Quarterly revenue was also recorded above forecasts by $311.2 million and increased 18.35% from the year-ago quarter by coming in at $49.36 billion.
Investment firm Motiwala Capital discussed Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter. It said:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) was the most popular blue chip stock in the Q1 database of Insider Monkey, which showed that 271 hedge funds were bullish on the company shares, as opposed to 279 hedge funds at the end of the fourth quarter. It was the third largest holding in billionaire Ken Fisher’s $169 billion portfolio, with his Fisher Asset Management owning a $7.7 billion stake in Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter of 2022.
June 6 marked the first trading day where Amazon.com, Inc.’s (NASDAQ:AMZN) 20:1 stock split came into effect, which was announced back in March. Shares were previously trading at above $2000, and were subsequently priced at $120. Splitting the price of an expensive, four-digit stock makes it more affordable to retail investors, and Amazon.com, Inc. (NASDAQ:AMZN) shares rose to $128 on the same day, before coming down to around $124.
MKM Partners analyst Rohit Kulkarni subsequently maintained a ‘Buy’ rating on Amazon.com, Inc. (NASDAQ:AMZN) shares, and a price target of $180 per share, split-adjusted roughly in-line with his prior target of $3,625. He views Amazon as the most diversified internet firm in the world, and ranks it as the best “safe haven” internet stock given the current economic uncertainty.
Baron Funds, an investment firm, talked about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter. Here’s what it said:
“Jeff Bezos sums up the current market behavior well in his 2000 shareholder letter where he quoted Benjamin Graham’s famous statement that, in the short term, a stock market is a voting machine, while in the long term, it is a weighing machine, saying that Amazon (NASDAQ:AMZN) is a “company that wants to be weighed, and over time we will be – over the long term, all companies are. In the meantime, we have our heads down working to build a heavier and heavier company.”
We have a lot of conviction that our businesses are doing the same – working to build heavier and heavier companies.”
You can also take a look at 10 Best Shipping Stocks that Pay Dividends and 10 Best Dividend Stocks to Buy for Long Term Gains.
