In this article, we discuss 5 tech stocks to sell in 2022 according to billionaire Stanley Druckenmiller. If you want to see more tech stocks to sell according to the billionaire, click 10 Tech Stocks to Sell in 2022 According to Billionaire Stanley Druckenmiller.
5. Fastly, Inc. (NYSE:FSLY)
Number of Hedge Fund Holders: 24
Fastly, Inc. (NYSE:FSLY) was founded in 2011 and is headquartered in San Francisco, California. The company specializes in infrastructure-as-a-service via an edge cloud platform for processing and securing its customer applications. Fastly, Inc. (NYSE:FSLY) has customers in the United States, the Asia Pacific, Europe, and internationally.
Fastly, Inc. (NYSE:FSLY) reported its financial results for the first fiscal quarter of 2022 on May 4. The company posted a loss per share of $0.15, falling short of analysts’ estimates by $0.01. The revenue grew 20.66% year-over-year to $102.38 million, exceeding market estimates by $3.45 million.
On May 6, Citi analyst Fatima Boolani lowered the price target on Fastly, Inc. (NYSE:FSLY) to $14 from $22 and reiterated a Sell rating on the shares after the Q1 results. A “decelerating trajectory stuck in the teens against no operating leverage” with gross margins “pit stopping,” this is a “tough asset profile in this market,” Boolani told investors in a research note. The analyst added that a sudden CEO transition “adds more bearish fuel to the investment case”.
According to Insider Monkey’s Q4 database, 24 hedge funds were long Fastly, Inc. (NYSE:FSLY), up from 17 funds in the third quarter of 2021. In Q1 2022, D E Shaw held a $41.1 million stake in the company, among other notable institutional investors.
4. Guidewire Software, Inc. (NYSE:GWRE)
Number of Hedge Fund Holders: 27
Guidewire Software, Inc. (NYSE:GWRE) is a California-based company that offers software products for property and casualty insurance businesses around the world. The company provides Guidewire InsuranceSuite, containing applications like Guidewire PolicyCenter, BillingCenter, and ClaimCenter. Stanley Druckenmiller sold his $10 million Guidewire Software, Inc. (NYSE:GWRE) position entirely in Q1 2022.
On April 19, RBC Capital analyst Rishi Jaluria initiated coverage of Guidewire Software, Inc. (NYSE:GWRE) with an Outperform rating and a $125 price target. According to the analyst, Guidewire Software, Inc. (NYSE:GWRE)’s “attractive” valuation of enterprise value 7.5-times expected 2023 revenue, in line with vertical software rivals, is supported by its leading market position, lucrative vertical opportunity, and feasible financial model after the cloud transition.
According to Insider Monkey’s fourth quarter database, 27 hedge funds were long Guidewire Software, Inc. (NYSE:GWRE), compared to 26 funds in the prior quarter. Sharlyn C. Heslam’s Stockbridge Partners is a significant shareholder of the company, with 4.7 million shares worth $448.2 million.
Here is what Weitz Investment Management Hickory Fund has to say about Guidewire Software, Inc. (NYSE:GWRE) in its Q4 2021 investor letter:
“In the second half of the year, resurgent inflation and higher interest rate fears reined in investor appetite for higher-growth assets trading at premium multiples. Within our portfolio, this has included enterprise software provider Guidewire – our chief detractors from calendar year performance. Each is a leader in its respective, specific market, and we continue to have a lot of confidence in the long-term outlook for each. We also note that our investment thesis has always contemplated a higher-interest-rate environment. While this rotation may reasonably bring some market “highflyers” back to Earth, we continue to watch for opportunities to add to these terrific businesses should further pressure yield attractive prices.”
3. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 73
Palo Alto Networks, Inc. (NASDAQ:PANW) is a California-based provider of cybersecurity solutions, offering firewall appliances and software. On May 17, KeyBanc analyst Michael Turits slashed the price target on Palo Alto Networks, Inc. (NASDAQ:PANW) to $610 from $729 and reiterated an Overweight rating on the shares, citing peer multiples.
Billionaire Stanley Druckenmiller’s Duquesne Capital sold off its $127.7 million stake in Palo Alto Networks, Inc. (NASDAQ:PANW) in the first fiscal quarter of 2022. According to the fourth quarter database of Insider Monkey, 73 hedge funds reported long positions in Palo Alto Networks, Inc. (NASDAQ:PANW), with collective stakes worth about $6.5 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held 756,870 shares of the company in Q1 2022, worth over $471 million.
Here is what ClearBridge Investments Large Cap Growth Strategy has to say about Palo Alto Networks, Inc. (NYSE:PANW) in its Q1 2022 investor letter:
“The portfolio also saw solid performance from cybersecurity names Palo Alto Networks (NYSE:PANW) which is gaining prominence as the risk of global cyber attacks increases as part of the Russian offensive. On an individual stock basis, leading contributors to absolute returns in the first quarter included positions in Palo Alto Networks.”
2. Samsara Inc. (NYSE:IOT)
Number of Hedge Fund Holders: 23
Samsara Inc. (NYSE:IOT) is an IoT company based in San Francisco, California, specializing in cloud-based tracking of vehicle fleets and other equipment. Stanley Druckenmiller added Samsara Inc. (NYSE:IOT) to his Q4 portfolio by buying 272,700 shares worth $7.6 million. In Q1 2022, the billionaire sold out of his position completely. The stock slid over 20% in the last month.
The company reported its Q4 2021 results on March 2. Samsara Inc. (NYSE:IOT)’s loss per share for the quarter was $0.05, beating estimates by $0.03. The $125.75 million revenue outperformed Street estimates by $9.43 million.
Among the hedge funds tracked by Insider Monkey, 23 funds reported owning stakes in Samsara Inc. (NYSE:IOT) at the end of December 2021, collectively worth $225.4 million.
1. SentinelOne, Inc. (NYSE:S)
Number of Hedge Fund Holders: 39
SentinelOne, Inc. (NYSE:S) is a cybersecurity provider in the United States and internationally. The company leverages cloud computing and IoT to carry out its security protocols. Stanley Druckenmiller first invested in SentinelOne, Inc. (NYSE:S) in Q2 2021, purchasing 100,000 shares of the company, worth $4.25 million. In the fourth quarter, the billionaire’s fund held 60,000 shares of SentinelOne, Inc. (NYSE:S), which were sold off completely in Q1 2022.
On May 16, Wells Fargo analyst Andrew Nowinski lowered the price target on SentinelOne, Inc. (NYSE:S) to $30 from $38 and maintained an Overweight rating on the shares. The analyst adjusted the price targets for multiple off-calendar security software vendors in view of his Q1 resellers survey. He noted that valuations across the software space have pulled back significantly due to the broader market correction.
Among the hedge funds tracked by Insider Monkey, 39 funds reported owning bullish stakes in SentinelOne, Inc. (NYSE:S) at the end of Q4 2021, up from 35 funds in the preceding quarter. Billionaire Dan Loeb’s Third Point held a notable stake in SentinelOne, Inc. (NYSE:S) at the conclusion of the first quarter of 2022, with 26.30 million shares worth over $1 billion.
Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about SentinelOne, Inc. (NYSE:S) in its Q4 2021 investor letter:
“We added six new positions in the fourth quarter. We see next-generation cybersecurity provider SentinelOne, although early in its growth lifecycle, as capable of taking share from legacy players in the antivirus and broader cybersecurity industry.”
You can also take a peek at 10 Biotech Stocks to Buy Today According to Ken Fisher’s Fisher Asset Management and 10 Stocks to Buy Now According to Steve Ketchum’s Sound Point Capital.
