In this article, we discuss the 5 stocks Redditors are buying for 2022. If you want to read our detailed analysis of these stocks, go directly to the 10 Stocks Redditors are Buying for 2022.
5. Magnite, Inc. (NASDAQ:MGNI)
Number of Hedge Fund Holders: 26
Magnite, Inc. (NASDAQ:MGNI) owns and runs an independent advertising platform. As adtech giants like Google and Meta face the brunt of antitrust motions, smaller adtech companies have gained in importance this year. The surge in spending on digital by enterprise clients, in the wake of the pandemic, has also helped the stock. Reddit forums are full of discussions around Magnite as well.
Magnite, Inc. (NASDAQ:MGNI) recently posted earnings for the third quarter, reporting a revenue of $131 million, up more than 116% compared to the revenue over the same period last year and beating estimates by $16.7 million.
Among the hedge funds being tracked by Insider Monkey, Texas-based firm Nine Ten Partners is a leading shareholder in Magnite, Inc. (NASDAQ:MGNI) with 1.8 million shares worth more than $51 million.
In its Q1 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and Magnite, Inc. (NASDAQ:MGNI) was one of them. Here is what the fund said:
“Magnite, Inc. was among the top contributors to performance. Magnite is an advertising technology company serving as a supply side platform for publishers. The platform helps publishers such as network television stations or cable news providers automate the sale of digital advertising inventory across different formats and channels, like desktop, mobile, video, audio, connected TV and over-the-top TV. Publishers monetize their digital advertising inventory by using Magnite’s platform to access a global market of ad buyers, including advertising agencies that use supply side platforms. Magnite also helps sellers decrease costs and protect their brands and user experience.
Magnite receives ad inventory from sellers and optimizes publishers’ revenue yields by processing the highest buyer bids. Currently, Magnite keeps approximately 14% of ad spend as revenue (i.e. take rate) and passes on the remainder of the ad spend to publishers. Magnite’s clients include many of the world’s leading publishers of websites and mobile applications and the company believes that its platform reaches approximately 1 billion individuals globally. Shares of Magnite outperformed in the first quarter due to stronger-than-expected fourth quarter results driven by a rapid recovery in digital advertising. Additionally, the company acquired SpotX, its largest competitor in connected TV. The combination makes Magnite the industry’s largest independent supply side platform and a much larger connected TV player. We believe connected TV is the most exciting part of the digital ad market and is in the early days of growth, including capturing market share from linear TV.”
4. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 27
UiPath Inc. (NYSE:PATH) is an application software firm that provides robotic process automation. The firm recently teamed up with cloud giant Snowflake to integrate the UiPath products onto the Snowflake platform, a collaboration that will help business clients store and analyze their data more securely. The partnership has garnered lots of interest among Redditors.
On December 3, investment advisory Morgan Stanley upgraded UiPath Inc. (NYSE:PATH) stock to Overweight from Equal Weight with a price target of $74, noting that the firm was executing growth strategies well and was “clear” about the path forward in the automation market.
At the end of the third quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $3.6 billion in UiPath Inc. (NYSE:PATH).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and UiPath Inc. (NYSE:PATH) was one of them. Here is what the fund said:
“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”
3. Azenta, Inc. (NASDAQ:AZTA)
Number of Hedge Fund Holders: 29
Azenta, Inc. (NASDAQ:AZTA) provides life sciences products and services. The firm was previously known as Brooks Automation and recently changed its name to Azenta after selling the semiconductor solutions business to Thomas Lee Partners for $3 billion back in September. The sale attracted the attention of the Reddit crowd, which has been bullish on the company since.
Azenta, Inc. (NASDAQ:AZTA) recently announced that Azenta Life Sciences, a subsidiary of the firm, had been contracted to provide vaccine storage and distribution services for the United States Department of Defense.
At the end of the third quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $577 million in Azenta, Inc. (NASDAQ:AZTA).
2. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 50
Cloudflare, Inc. (NYSE:NET) owns and runs a cloud platform that provides network services. The company recently announced that it was entering into email security and revealed that it had also teamed up with Microsoft to aid with search engine results. The new ventures are seen as growth catalysts for the company on Reddit.
Cloudflare, Inc. (NYSE:NET) posted earnings for the third quarter in early November, beating market predictions on earnings per share by $0.04. The revenue over the period was $172 million, up over 50% year-on-year and beating estimates by $6.6 million.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Cloudflare, Inc. (NYSE:NET) with 1.1 million shares worth more than $129 million.
In its Q4 2020 investor letter, Alger Mid Cap Focus Fund, an asset management firm, highlighted a few stocks and Cloudflare, Inc. (NYSE:NET) was one of them. Here is what the fund said:
“Cloudflare. Inc. provides a broad range of network services to businesses of all sizes across the world. Cloudflare’s intelligent global network spans more than 200 cities in over 100 countries. It offers network security, performance and reliability to a growing portion of global web traffic. Today. over 15% of global internet requests go through Cloudflare. Cloudflare’s serverless network design allows this global network to be a key component layer as new developments for edge computing. 5G and Internet of Things increase the importance of secure. reliable edge networks. Cloudflare stock outperformed in the fourth quarter following the announcement of Cloudflare One, a cloud-bas. network-as-a-service platform designed to replace the traditional enterprise network infrastructure. The Cloudflare One solution merges existing Cloudflare access and security solutions along with new enterprise-specific features into a unified Zero Trust network that can be managed through a single “pane of glass.” or display screen. With the rapid shift to remote work caused by the pandemic, this product increases Cloudflare’s potential for winning business from enterprise customers seeking to adapt to this new business environment.
While Cloudflare One adoption is still early. Cloudflare has already started to demonstrate an improved ability to sell to large customers. When discussing its third quarter results. Cloudflare said that it is continuing to sign up larger enterprise customers. including its first client to generate more than $10 million in annual recurring revenue. Cloudflare has just started to better monetize its more than 100.000 paying customer base. which along with continued product innovation, gives the company strong growth potential.”
1. Square, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 98
Square, Inc. (NYSE:SQ) provides payments technology solutions. The company has been a Reddit favorite for most of this year as retail investors back the company as a disruptor in the payments market where crypto-heavy players are steadily gaining in relevance. Square has over $400 million invested in crypto assets.
UBS analyst Rayna Kumar recently initiated coverage of Square, Inc. (NYSE:SQ) stock with a Buy rating and a price target of $322, lauding the “transformational” purchase of Afterpay, another payment firm, as a growth catalyst for Square in the long-term.
At the end of the third quarter of 2021, 98 hedge funds in the database of Insider Monkey held stakes worth $8 billion in Square, Inc. (NYSE:SQ), up from 94 the preceding quarter worth $10 billion.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Square, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown
from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
You can also take a peek at 10 Companies that Benefit From Crypto Mining and 12 Best Artificial Intelligence Stocks To Invest In Right Now.
