In this article, we discuss 5 tech stock picks of billionaire Mario Gabelli. If you want to read our detailed analysis of these stocks, go directly to 10 Tech Stock Picks of Billionaire Mario Gabelli.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Apple Inc. (NASDAQ:AAPL) makes and sells consumer electronics. It is one of the top tech stocks in the finance world. At the end of the fourth quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $186 billion in Apple Inc. (NASDAQ:AAPL), up from 120 in the preceding quarter worth $146 billion.
According to the latest filings, GAMCO Investors owned over 209,000 shares of Apple Inc. (NASDAQ:AAPL) at the end of the fourth quarter of 2021 worth $37 million, representing 0.31% of the portfolio.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Alphabet Inc. (NASDAQ:GOOG) is a diversified technology company. Latest data shows that GAMCO Investors owned more than 22,839 shares of the company at the end of the fourth quarter of 2021 worth over $66 million, representing 0.56% of the portfolio.
Elite hedge funds remain bullish on Alphabet Inc. (NASDAQ:GOOG) despite rising inflation. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.9 million shares worth more than $8.5 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
3. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 224
Meta Platforms, Inc. (NASDAQ:FB) is a California-based technology company. Hedge funds have been shedding the stock as interest rates rise. At the end of the fourth quarter of 2021, 224 hedge funds in the database of Insider Monkey held stakes worth $31 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 248 in the preceding quarter worth $38 billion.
Regulatory filings show that GAMCO Investors owned 50,179 shares of Meta Platforms, Inc. (NASDAQ:FB) at the end of December 2021 worth $16.8 million, representing 0.14% of the portfolio.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology firm. Securities filings reveal that GAMCO Investors owned 153,195 shares of the company at the end of December 2021 worth $51 million, representing 0.44% of the portfolio.
Major hedge funds hold large stakes in Microsoft Corporation (NASDAQ: MSFT). Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT), with 26.8 million shares worth more than $9 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology company. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN), with 4.1 million shares worth more than $13.9 billion.
The hedge fund of Mario Gabelli entered the first quarter of 2022 with over 8,000 shares of Amazon.com, Inc. (NASDAQ:AMZN) in the portfolio worth more than $27 million, representing 0.23% of the portfolio.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”read the entire letter here]
You can also take a peek at 10 Best Medical Stocks Under $10 and 15 Best Warren Buffett Stocks to Buy Now.
