In this article, we discuss 5 technology stocks to buy now according to Dan Loeb. If you want to see some more stocks from our list, click 10 Technology Stocks to Buy Now According to Dan Loeb.
5. Microsoft Corporation (NASDAQ:MSFT)
Third Point’s Stake Value: $538,112,000
Percentage of Third Point’s 13F Portfolio: 3.75%
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) is one of the biggest American tech firms, and Dan Loeb’s Third Point owns 1.6 million shares of the company as of Q4 2021. The billionaire’s stake is worth more than $538 million and represents 3.75% of his fund’s total 13F holdings.
Microsoft Corporation (NASDAQ:MSFT) declared on March 15 a $0.62 per share quarterly dividend, in line with previous. The dividend will be distributed on June 9, to shareholders of record on May 19.
On April 11, UBS analyst Karl Keirstead reiterated a Buy rating on Microsoft Corporation (NASDAQ:MSFT) but he believes that Office 365 usage is likely to decelerate due to high penetration and the pandemic/work-from-home benefit starting to fade. The stock traded lower after the analyst published his rating.
According to Insider Monkey’s Q4 database, 262 hedge funds held long positions in Microsoft Corporation (NASDAQ:MSFT), compared to 250 funds in the prior quarter. Fisher Asset Management is the leading Microsoft Corporation (NASDAQ:MSFT) stakeholder, with 26.8 million shares worth over $9 billion.
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”
4. Upstart Holdings, Inc. (NASDAQ:UPST)
Third Point’s Stake Value: $605,200,000
Percentage of Third Point’s 13F Portfolio: 4.22%
Number of Hedge Fund Holders: 20
Upstart Holdings, Inc. (NASDAQ:UPST) is a California-based company that runs a cloud lending platform, powered via artificial intelligence. Dan Loeb’s Third Point held 4 million Upstart Holdings, Inc. (NASDAQ:UPST) shares in the December quarter, worth $605.2 million, representing 4.22% of the total 13F securities.
Upstart Holdings, Inc. (NASDAQ:UPST)’s Q4 earnings came in on February 15. The company posted an EPS of $0.89, beating analysts’ consensus estimates by $0.38. Revenue for the period jumped 251.57% from the prior-year quarter to $304.85 million, surpassing market predictions by $42 million.
FBN Securities analyst Shebly Seyrafi initiated coverage of Upstart Holdings, Inc. (NASDAQ:UPST) on April 12 with an Outperform rating and a $150 price target. While Upstart Holdings, Inc. (NASDAQ:UPST) revenues are mainly generated by the personal loan market, the company entered the auto loan market in 2020 and the analyst projects the sector to account for 3% of fee revenue in 2022 and 6% in 2023. Upstart Holdings, Inc. (NASDAQ:UPST) can also expand into the smaller dollar loan market, installment loans to business owners, and the home mortgage market, noted the analyst, who expects “very strong growth in year two of entry into each of these markets”.
According to Insider Monkey’s Q4 data, Upstart Holdings, Inc. (NASDAQ:UPST) was found in the public 13F portfolios of 20 hedge funds, compared to 23 funds in the third quarter. D E Shaw is a significant stakeholder of the company, owning 1.7 million shares worth approximately $261 million.
Here is what Vulcan Value Partners Large Cap Fund has to say about Upstart Holdings, Inc. (NASDAQ:UPST) in its Q4 2021 investor letter:
“Upstart Holdings Inc. was another material detractor during the quarter. Upstart is an artificial intelligence (AI) and cloud-based lending platform. Upstart uses over 1600 variables in its AI models. Its lending platform delivers lower default rates, higher approval rates, lower rates for consumers, and higher returns on investment for its bank and institutional clients. As former owners of FICO, we believe Upstart has the potential to be the FICO of the 21st century. Recent stock price volatility has given us an opportunity to follow our investment discipline. During the third quarter of 2021, Upstart’s stock price increased significantly, and we materially reduced our position in the company. Following its most recent earnings release, our value increased but Upstart’s stock price began to decline significantly. With a significantly improved price to value ratio, we added to our position in Upstart. We simply took advantage of stock price volatility to manage risk in the portfolio and improve our returns and our prospective returns.”
3. Alphabet Inc. (NASDAQ:GOOG)
Third Point’s Stake Value: $614,172,000
Percentage of Third Point’s 13F Portfolio: 4.28%
Number of Hedge Fund Holders: 158
Dan Loeb’s Third Point first invested in Alphabet Inc. (NASDAQ:GOOG) back in Q1 2016 and held the stake until the first quarter of 2018. The hedge fund disposed of the Alphabet Inc. (NASDAQ:GOOG) position in Q2 2018, before purchasing shares of the company again in Q4 2020. As of the fourth quarter of 2021, Third Point holds 212,000 Alphabet Inc. (NASDAQ:GOOG) shares, worth over $614 million. It remains one of the top technology stocks to buy now according to Dan Loeb.
On March 16, Alphabet Inc. (NASDAQ:GOOG)’s disclosed its acquisition of Raxium, a startup that builds small light emitting diodes for displays utilized in augmented and mixed reality devices. This acquisition is Alphabet Inc. (NASDAQ:GOOG)’s play into the AR and VR space, following the footsteps of competitors such as Apple, Meta Platforms, and Snap.
Tigress Financial analyst Ivan Feinseth on March 18 lifted the firm’s price target on Alphabet Inc. (NASDAQ:GOOG) to $3,670 from $3,540 and reiterated a Strong Buy rating on the shares, citing the company’s “extremely strong” Q4 results and its continuous investment in the Artificial Intelligence division.
Insider Monkey’s Q4 data suggests that Alphabet Inc. (NASDAQ:GOOG) shares were held by 158 elite hedge funds, compared to 156 funds in the earlier quarter. Chris Hohn’s TCI Fund Management is the biggest Alphabet Inc. (NASDAQ:GOOG) shareholder, with a position worth $8.5 billion.
Here is what Vulcan Value Partners has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:
“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet, performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet (Google) again with a margin of safety.”
2. Intuit Inc. (NASDAQ:INTU)
Third Point’s Stake Value: $739,703,000
Percentage of Third Point’s 13F Portfolio: 5.16%
Number of Hedge Fund Holders: 82
Intuit Inc. (NASDAQ:INTU) is a global technology company that offers financial software platforms such as TurboTax, QuickBooks, Mint, Credit Karma, and Mailchimp. Dan Loeb owns 1.15 million Intuit Inc. (NASDAQ:INTU) shares as per the 13F filings from Q4 2021. The billionaire’s stake is valued at $739.7 million, representing 5.16% of the total portfolio.
On March 3, Intuit (NASDAQ:INTU) declared a quarterly dividend of $0.68 per share. The dividend is payable on April 18, to shareholders of the company as of the close of business on April 11.
Stifel analyst Brad Reback on March 21 maintained a Buy rating on Intuit (NASDAQ:INTU) but lowered the firm’s price target on the stock to $580 from $600. The analyst slashed the price objective for a “vast majority” of the 70 software companies his firm covers to account for greater headwinds around new business activity originating from the prevalent Ukraine war, increasing supply chain challenges, and the growing impact of significantly soaring energy prices on consumer spending.
According to the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 82 funds were bullish on Intuit (NASDAQ:INTU), up from 64 funds in the earlier quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 3.7 million shares worth $2.40 billion.
Here is what Baron FinTech Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q4 2021 investor letter:
“Intuit Inc. is the leading provider of accounting and tax preparation software. Shares increased after the company reported quarterly results that beat Street estimates, with 22% revenue growth in the Small Business segment and record-high revenue from Credit Karma. The company closed the acquisition of MailChimp, which expands its product offering and is accretive to EPS. Management increased full-year guidance to reflect better organic growth and the contribution from MailChimp. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities. We have several investments in software companies that help businesses manage their financial processes and operations. Intuit Inc. provides accounting and payroll solutions for small businesses as well as tax preparation software for consumers and tax professionals.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Third Point’s Stake Value: $783,570,000
Percentage of Third Point’s 13F Portfolio: 5.46%
Number of Hedge Fund Holders: 279
Jeff Bezos’ Amazon.com, Inc. (NASDAQ:AMZN) is a multinational tech giant that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon.com, Inc. (NASDAQ:AMZN) is one of the top technology stocks to buy according to Dan Loeb’s Third Point, and the fund owns a $783.5 million stake in the company, representing 5.46% of the total 13F portfolio.
Amazon.com, Inc. (NASDAQ:AMZN)’s revenue for 2021 stood at $469.8 billion, a growth of 21.70% as compared to 2020, when revenue for the year came in at $386 billion. Amazon.com, Inc. (NASDAQ:AMZN)’s 2021 net income was $33.3 billion, an increase from the 2020 net income of $21.3 billion.
On March 25, Evercore ISI analyst Mark Mahaney kept an Outperform rating and a $4,300 price target on Amazon.com, Inc. (NASDAQ:AMZN) shares and he also “modestly” lifted his FY23 and FY24 estimates above the Street view for Amazon.com, Inc. (NASDAQ:AMZN), calling it his number one mega cap internet long idea.
Elite hedge funds are piling into Amazon.com, Inc. (NASDAQ:AMZN). Among the hedge funds tracked by Insider Monkey, 279 funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN) in Q4 2021, up from 242 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is a significant stakeholder of the company, with 677,828 shares worth $2.26 billion.
Here is what Mercator International Opportunity Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2021 investor letter:
“Transformative technologies often generate euphoria. People are excited by the big new thing that is changing the world. We saw this pattern with the boom of westward canal transportation at the dawn of the nineteenth century. Railway stocks similarly attracted large numbers of eager investors a few decades later. Then came the electrification of America, the telephone, and the automobile industry, to name just a few transformative technologies.
The initial euphoric phase always ends with a reality check. Valuations come back to earth. At the end of the cycle, only a few companies remain standing. A shakeout has a way of clarifying the field of opportunities.
For example, readers may recall that when the internet bubble burst two decades ago, Amazon.com, Inc. (NASDAQ:AMZN) stock suffered greatly but pet.com was gone. For those investors who had stayed on the sidelines, this was an excellent time to buy Amazon. The company’s business model had shown its merits and competition was rapidly shrinking. The stock price was now also much more attractive.”
You can also take a look at 10 Software Stocks to Buy Now According to Jim Davidson’s Silver Lake Partners and 10 Consumer Technology Stocks to Invest In According to Ken Fisher’s Fisher Asset Management.
