In this article, we will take a look at the 5 tech stocks with biggest upside. To see more such companies, go directly to 13 Tech Stocks with Biggest Upside.
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 121
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a giant in the semiconductor industry. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s net revenue in July jumped 13.6% month-over-month to about NT$177.62 billion. In July Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) posted Q2 results. GAAP EPADR in the quarter came in at $1.14 beating estimates by $0.06. Revenue in the period fell 13.7% year over year to $15.68 billion, surpassing estimates by $300 million.
A total of 121 hedge funds in Insider Monkey’s database had stakes in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as of the end of the second quarter.
4. Salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Holders: 122
Salesforce.com, inc. (NYSE:CRM) is easily one of the top tech stocks with upside potential. Salesforce.com, inc. (NYSE:CRM) dominates the customer relationship management software market. Earlier this year it announced AI-related features for its products. Salesforce.com, inc. (NYSE:CRM) recently posted strong Q2 results and upped its guidance.
Wedbush Securities analyst Dan Ives boosted Salesforce.com, inc. (NYSE:CRM) price target to $255.
Insider Monkey’s database of 910 hedge funds shows that 122 funds had stakes in Salesforce.com, inc. (NYSE:CRM).
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 175
NVIDIA Corporation (NASDAQ:NVDA) shares have already gained about 240% year to date but the stock has a lot of room to run according to analysts since the company dominates the semiconductor market when it comes to AI. Companies are rapidly deploying generative AI systems and they need chips developed by NVIDIA Corporation (NASDAQ:NVDA) to power their AI software.
RiverPark Large Growth Fund made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our next top contributor in reaction to blowout 1Q results and 2Q guidance. The company reported revenue of $7.2 billion and EPS of $1.09, 10% and 18% ahead of expectations. Revenue guidance for 2Q of $11 billion was 53% above expectations. The artificial intelligence arms race kicked-off by generative AI applications ChatGPT and Alphabet’s Bard has generated tremendous demand for Nvidia’s next generation graphic processors.
NVDA is the leading designer of graphics processing units (GPU’s) 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. 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. Following 1Q’s strong results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “[a] trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
Amazon ranks 2nd in our list of the tech stocks with the biggest upside. Amazon.com, Inc. (NASDAQ:AMZN) is trending amid two near-term catalysts: the upcoming Amazon Prime Day and AWS re: Invent event scheduled for November 27.
As of the end of the second quarter of 2023, 278 hedge funds in Insider Monkey’s database of 910 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN). The biggest stakeholder of Amazon.com, Inc. (NASDAQ:AMZN) during this period was Natixis Global Asset Management’s Harris Associates which owns a $2 billion stake in the company.
RiverPark Large Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was a top contributor in the second quarter, in reaction to a solid 1Q23 earnings report. The company generated $127 billion of revenue (2% ahead of expectations) and nearly $5 billion of operating income (57% better than expectations) driven by rebounding online sales and strong incremental gross margins. During the company’s earnings conference call, Amazon management pointed to easing inflationary pressures, higher productivity gains, and lower expected capital spending for the remainder of the year. The only negative in the quarter was slowing AWS revenue growth, which we believe will rebound later in the year.
With its ability to continue its market share gains in three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world. AMZN shares trade at a 10-year trough EPS multiple, despite what we believe to be currently depressed margins and earnings.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 300
Microsoft Corporation (NASDAQ:MSFT) is easily the most commonly talked about tech stock with upside potential. Most of the credible analysts believe Microsoft Corporation (NASDAQ:MSFT) still has a lot of room to run due to its AI-related ventures. Microsoft Corporation (NASDAQ:MSFT) is expected to gain market share in search, its enterprise footprint is increasing and its Cloud computing segment is also showing growth. Microsoft Corporation (NASDAQ:MSFT)’s huge investments in AI will bear fruit in the months and years to come.
Hedge funds also agree with the overall market sentiment on Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) was the most popular stock among the 910 hedge funds tracked by Insider Monkey.
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). During the period, shares contributed to performance as the company reported fiscal third quarter results above expectations driven by outperformance in More Personal Computing and Office Commercial. Additionally. management provided in-line Azure guidance, easing investor concerns of a potential slowdown in Azure growth estimates. Moreover, management provided encouraging commentary around Al, noting strong long-term opportunities as they integrate various Al offerings into their products and services.”
You can also take a peek at 15 Most Profitable Cutting Edge Technologies That Will Make You Rich and Dow 30 Stocks List: Ranked By Hedge Fund Bullishness Index.
