In this article, we will be discussing the 10 tech stocks billionaire Daniel Sundheim is buying.
Serving as its chief investment officer, billionaire Daniel Sundheim is the founder of D1 Capital Partners, an investment firm based in New York. Having earned his B.S in Economics from the Wharton School at the University of Pennsylvania, Daniel Sundheim joined the Connecticut-based Viking Global Investors in 2002, where he served as an analyst. He then progressed swiftly to eventually become the chief investment officer of the firm in 2014. After leaving Viking Global, Sundehim established D1 Capital Partners in 2018, with a seed funding of more than $5 billion, including $500 million from his personal wealth.
D1 Capital Partners’ investments include both the public, and private markets. It invests on behalf of corporations and foundations, family offices, sovereign wealth funds, hospitals, and pension funds throughout the world, with an investment strategy largely based on fundamentals and research, placing emphasis on medium to long-term returns.
D1 Capital Partners, as an investment management fund, oversees more than $15.29 billion in its portfolio. According to the most recent 13F filings, D1 Capital Partners’ portfolio branches out into 9 principal sectors, with the Consumer Discretionary sector dominating, making up 48.5% of the fund’s total portfolio value. A majority of the companies in the fund’s portfolio are large-cap companies based in the United States, with stocks scaling up to more than $10 billion in market capitalization making up 65% of the fund’s total value.
Some of the top stocks present in the investment portfolio of D1 Capital Partners at the end of the second quarter of 2021 include Facebook, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) and JD.com, Inc. (NYSE:JD) among others.
Daniel Sundheim of D1 Capital Partners
Our Methodology
With this background in mind, let us now look towards the 10 tech stocks billionaire Daniel Sundheim is buying. We made use of D1 Capital Partners’ 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Daniel Sundheim’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Billionaire Daniel Sundheim is Buying These 10 Tech Stocks
10. Kanzhun Limited (NASDAQ:BZ)
Sundheim’s Stake Value: $20.8 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 26
Kanzhun Limited is a holding company that provides online recruitment services. Based in China, the company links job seekers and corporation users through its mobile application. Ranked tenth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, Kanzhun Limited (NASDAQ:BZ) has a market capitalization of $14.60 billion.
According to the recent 13F Filings, Daniel Sundheim’s D1 Capital Partners holds over 525,000 shares of Kanzhun Limited, amounting to over $20.8 million in worth and accounting for 0.13% of the fund’s investment portfolio. At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $447.7 million in Kanzhun Limited
For the second quarter of 2021, Kanzhun Limited reported earnings per share at $0.20, beating market estimates by $0.13. The company also reported revenues of $180.48 million, surpassing estimates by $11.22 million.
On July 23, Goldman Sachs analyst Piyush Mubayi initiated coverage of Kanzhun Limited with a Neutral rating and $41 price target.
9. Pinterest Inc. (NYSE:PINS)
Sundheim’s Stake Value: $40.9 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.26%
Number of Hedge Fund Holders: 63
Pinterest Inc. (NYSE:PINS) is a social media company that provides image sharing services. Ranked ninth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, Pinterest Inc. enables the discovery of information in the form of images and GIFs.
In the second quarter of 2021, Pinterest, Inc. had an actual EPS of $0.25, beating estimates by $0.12. Pinterest, Inc. reported revenues amounting to $613.21 million, up 125.04% year over year, beating estimates by $51.07 million.
Based on the latest 13F filings, Daniel Sundheim’s hedge fund holds 519,000 shares of Pinterest, Inc., worth $40.9 million as of the second quarter of 2021. These shares represent 0.26% of his fund’s investment portfolio. By the end of the second quarter of 2021, 63 hedge funds out of the 873 tracked by Insider Monkey held stakes in Pinterest, Inc. worth roughly $2.9 billion. This is compared to 83 hedge funds in the previous quarter with a total stake value of approximately $4.18 billion.
On September 13, Goldman Sachs analyst Eric Sheridan initiated coverage of Pinterest with a Neutral rating and $57 price target
Carillon Tower Advisers, an investment management firm, shared insights regarding Pinterest, Inc.’s quarterly earnings in their Q1 investor letter and shared their expectations of the company. Here’s what they had to say:
“Pinterest is an operator of a pinboard-style social media website that enables users to create theme-based image collections for events, hobbies, and other personal interests. The firm delivered another quarter of both earnings and forward guidance above investor expectations, sending shares higher. Strength was driven by notable user growth and a return of advertising spending. We remain excited about an increase in video content, new analytics tools for advertisers, and an increasing shift towards ecommerce.”
8. Squarespace, Inc. (NYSE:SQSP)
Sundheim’s Stake Value: $47.8 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 12
Squarespace, Inc. (NYSE:SQSP) is a leading American all-in-one company that specializes in website building and hosting. The company is mainly known for providing a software platform that enables individuals, as well as whole corporations, to build their brands. The New York-based company ranks eighth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying.
On August 9, Squarespace, Inc. posted its quarterly earnings report for the second quarter of 2021, with reported earnings per share coming in at $0.41, beating market estimates by $0.32. Additionally, the revenue for the quarter was reported to be $196.01 million, surpassing the predicted revenues by $7.32 million.
D1 Capital Partners currently holds over 804,621 shares of Squarespace, Inc., worth $47.8 million and accounting for 0.31% of the fund’s total portfolio value. At the end of the second quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $163.7 million within Squarespace, Inc..
On July 19, BofA analyst Nat Schindler initiated coverage of Squarespace with a Buy rating and $73 price target, stating his belief in the upside drive of the stock.
Much like Facebook, Inc., Amazon.com, Inc., Microsoft Corporation and JD.com, Inc., Squarespace, Inc. has a notable position in Daniel Sundheim’s portfolio.
7. Fortive Corporation (NYSE:FTV)
Sundheim’s Stake Value: $80.2 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.52%
Number of Hedge Fund Holders: 31
Fortive Corporation (NYSE:FTV) is an industrial technology conglomerate that designs, manufactures and markets engineered products as well as professional services. Ranked seventh on our list of the 10 tech stocks billionaire Daniel Sundheim is buying, the Washington-based company has a market capitalization of $25.42 billion.
Based on the latest 13F Filings, Daniel Sundheim owns 1.15 million shares of Fortive Corporation, amounting to over $80.2 million in worth and accounting for 0.52% of the fund’s total investment portfolio. At the end of the second quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth over $2.23 billion in Fortive Corporation, up from 27 hedge funds in the previous quarter with stakes worth $1.69 billion.
The company issued its quarterly earnings report for the second quarter of 2021 on July 29, with earnings per share at $0.66, crossing estimates by $0.06. Additionally, the company generated revenues amounting to $1.32 billion, surpassing market predictions by $27.46 million.
On July 12, Wolfe Research analyst Nigel Coe upgraded Fortive Corporation to Outperform from Peer Perform with a price target of $84, up from $81.
Much like Facebook, Inc., Amazon.com, Inc., Microsoft Corporation and JD.com, Inc., Fortive Corporation has a notable position in Daniel Sundheim’s portfolio.
6. CrowdStrike Holdings, Inc. (NYSE:CRWD)
Sundheim’s Stake Value: $89.3 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 66
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a California-based cybersecurity technology company that provides endpoint and cloud workload security solutions. The company is placed sixth on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.
Daniel Sundheim’s D1 Capital Partners currently holds 355,400 shares of CrowdStrike Holdings, Inc., worth over $89.3 million and representing 0.58% of the fund’s portfolio value. At the end of the second quarter of 2021, 66 hedge funds in the database of Insider Monkey held stakes worth $7.26 billion in CrowdStrike Holdings, Inc., down from 77 hedge funds in the preceding quarter with stake worth $5.25 billion.
On September 1, BTIG analyst Gray Powell raised his price target on CrowdStrike Holdings, Inc. to $313 from $302, and kept a Buy rating on the shares.
For the second quarter of 2021, CrowdStrike Holdings, Inc. reported its EPS at $0.03, beating market estimates by $0.04. The company also reported revenues of $198.97 million, an increase of 84.05% on a year-over-year basis, surpassing estimates by $47.46 million.
In its Q1 2021 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and CrowdStrike Holdings, Inc. was one of them. Here is what the fund said:
“CrowdStrike provides cloud-based software used in the security of computers, servers, and mobile phones. The stock pulled back a bit during the quarter as investor sentiment shifted away from stocks with higher valuation multiples. We remain shareholders, as the protection of enterprise assets and cloud workloads from various forms of cyberattacks remains more important than ever for many enterprises, and we believe this will continue to result in a strong demand environment for CrowdStrike’s innovative products and services.”
5. StoneCo Ltd. (NASDAQ:STNE)
Sundheim’s Stake Value: $129.7 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.84%
Number of Hedge Fund Holders: 44
StoneCo Ltd (NASDAQ:STNE) operates as a provider of financial technology, based in the Cayman Islands. The company provides a platform for e-commerce, across in-store, online and mobile channels. Ranked fifth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, StoneCo Ltd. has a market capitalization of $10.39 billion.
On June 23, investment advisory New Street initiated coverage of StoneCo Ltd. stock with a Neutral rating and a price target of $82.
Based on the second quarter data, Daniel Sundheim’s D1 Capital Partners held over 1.93 million shares of StoneCo Ltd., amounting to more than $129.7 million in worth, representing 0.84% of the fund’s investment portfolio. At the end of the second quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in StoneCo Ltd., up from 39 in the previous quarter worth $2.1 billion.
Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is among the leading shareholders of StoneCo Ltd., with over 10.6 million shares worth roughly $717.2 million.
In its Q2 2021 investor letter, JDP Capital Management, an asset management firm, commented on the future prospects of StoneCo Ltd.. Here is what the fund said:
“StoneCo has been in our portfolio since early 2019 and has appreciated 225% since. In the first half of 2021 the stock was down nearly 20% and was a drag on the fund’s performance.
Stone is a leading fintec company in Brazil that provides back-office software, loans and other financial services to small and medium sized businesses (SMBs). We have discussed Stone in past letters and the company’s “ladder up” from a card processor to a supplier of enterprise software used to sell financial products on top of such as working capital loans…” (Click here to see the full text)
4. DLocal Limited (NASDAQ:DLO)
Sundheim’s Stake Value: $135 million
Percentage of Daniel Sundheim’s 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 20
DLocal Limited (NASDAQ:DLO) provides a payments technology platform that connects global enterprises with consumers. Ranked fourth on the list of the 10 tech stocks billionaire Daniel Sundheim is buying, the Uruguay-based company manages mass online payments and transactions.
On August 19, HSBC analyst Neha Agarwala raised her price target on DLocal Limited to $55 from $52, and kept a Hold rating on the shares of the company.
The company issued its quarterly earnings result for the second quarter of 2021 on August 18, with a reported EPS of $0.07, crossing market estimates by $0.02. The reported revenue came in at $58.96 million, beating the estimated revenue by $18.26 million.
D1 Capital Partners held over 2.57 million share of DLocal Limited in the second quarter of 2021, worth more than $135 million. These shares represented 0.88% of the fund’s total portfolio value. By the end of the second quarter of 2021, 20 hedge funds out of the 873 tracked by Insider Monkey held stakes in DLocal Limited worth roughly $431.8 million.
3. Alkami Technology, Inc. (NASDAQ:ALKT)
Sundheim’s Stake Value: $188 million
Percentage of Daniel Sundheim’s 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 13
Alkami Technology, Inc. (NASDAQ:ALKT) is a software company based in Texas that provides a cloud-based digital banking platform for credit unions and banks. The company has a market capitalization of $2.21 billion, and is ranked third on the list of the 10 tech stocks billionaire Daniel Sundheim is buying.
As of the second quarter of 2021, Daniel Sundheim holds 5.2 million shares of Alkami Technology, Inc., amounting to over $188 million in worth and accounting for 1.23% of the fund’s investment portfolio. At the end of the second quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $265.8 million in Alkami Technology, Inc..
For the second quarter of 2021, Alkami Technology, Inc. reported earnings per share at -$0.08, beating market estimates by $0.01. The company also reported revenues of $36.7 million, surpassing estimates by $2.14 million.
On May 10, Needham analyst Mayank Tandon initiated coverage of Alkami Technology, Inc. with a Buy rating and $50 price target.
In its Q2 2021 investor letter, Baron Discovery Fund explained why they were investing in Alkami Technology Inc. (NASDAQ:ALKT). Here is what the fund said:
“This quarter, we invested in Alkami Technology Inc., a cloud-based digital banking platform that enables financial institutions (primarily credit unions) to onboard and engage new users, accelerate revenues, and meaningfully improve operational efficiency. The market opportunity is large with Alkami focusing on the top 2,000 of the 10,000 total financial institutions in the U.S. (excluding the mega-banks). Many financial institutions use clunky, outdated legacy systems today that are not well suited to the shift to digital banking (which has been accelerated by COVID). As a result, we are seeing financial institutions significantly increase their IT investments in these products. We believe Alkami will be a prime beneficiary of this shift as it stands out due to its highly rated user experience, leading brand with credit unions, and platform flexibility (multi-tenant, single code base platform). Alkami is well positioned to grow revenue 25% or more for the next several years driven by a combination of expanding existing customer relationships, adding new clients (heightened focus on banks in addition to credit unions), new product development, and selective acquisitions. We also believe that the company’s 30% or greater long-term adjusted EBITDA margin target is achievable.”
2. Farfetch Limited (NYSE:FTCH)
Sundheim’s Stake Value: $474.5 million
Percentage of Daniel Sundheim’s 13F Portfolio: 3.1%
Number of Hedge Fund Holders: 63
Farfetch Limited (NYSE:FTCH) is a UK-based company that owns and runs an online marketplace for luxury fashion apparel. It is ranked second on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.
On October 4, Wedbush analyst Tom Nikic initiated coverage of Farfetch Limited with a Neutral rating and $38 price target on its shares.
Latest data shows that D1 Capital Partners owned 9.42 million shares in Farfetch Limited in the second quarter of 2021, worth $474.5 million, representing 3.1% of the portfolio. At the end of the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Farfetch Limited, up from 57 in the previous quarter worth $3 billion.
On August 19, Farfetch Limited declared its revenue generated for the second quarter of 2021 at $523.31 million, surpassing the forecast revenues estimates by $26.97 million.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, commented on the growth and profits of Farfetch Limited. Here is what the fund said:
“We established a small position in e-commerce company Farfetch, which is benefitting from the secular trends of growing ecommerce, the global market for personal luxury goods, and emerging market growth, particularly in China. The company is an e-commerce platform like Amazon, Mercado Libre, or Alibaba, and is the leading online luxury fashion retail platform.
Luxury fashion has much lower online penetration than general ecommerce, and Farfetch is differentiated because of its longstanding relationships with the generally family-controlled, brand-protective luxury product companies. Because of its luxury focus, Farfetch has both higher average order values and higher take rates relative to peers, driving higher gross margins.
In its recently ended fiscal 2020, Farfetch grew revenue 64% and gross profit 68%, the company should be EBITDA positive this year, and we believe the company can grow revenue more than 20% per year and EBITDA more than 50% per year for the foreseeable future. With its extremely low capital needs—capital expenditures were less than 2% of revenue last year—we expect the company’s free cash flow to grow even faster.”
1. Procore Technologies, Inc. (NYSE:PCOR)
Sundheim’s Stake Value: $654.9 million
Percentage of Daniel Sundheim’s 13F Portfolio: 4.28%
Number of Hedge Fund Holders: 28
Procore Technologies, Inc. (NYSE:PCOR) is an American company engaged in construction management software. Headquartered in California, it provides a platform for construction companies to manage their projects. Procore Technologies, Inc. comes in at first place on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.
In Q2 2021, the company posted revenue of $122.79 million, an increase of 27.2% on a year-over-year basis, beating market estimated revenues by $6.14 million.
On August 6, investment advisory Canaccord raised its price target on Procore Technologies, Inc. to $110 from $100, with a ‘Buy’ rating on the shares.
Daniel Sundheim currently holds around 6.89 million shares of Procore Technologies, Inc., amounting to more than $654.9 million in worth. These shares account for 4.28% of his hedge fund’s total investment portfolio. At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $2.08 billion in Procore Technologies, Inc..
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This article is originally published at Insider Monkey.
