Billionaire Lee Ainslie’s Top 5 Stock Picks

In this article, we will take a look at Billionaire Lee Ainslie’s top 5 stock picks. For more Ainslie’s stocks, head on over to Billionaire Lee Ainslie’s Top 10 Stock Picks.

5. NVIDIA Corporation (NASDAQ:NVDA)

Maverick Capital’s Equity Stake: $145.8 million
Year-to-date gain: 244%

NVIDIA Corporation (NASDAQ:NVDA) is up by about 244% for the year. Ainsle’s fund trimmed its stakes in the company during Q3 to 335,211 shares from 452,379, accounting for 3.29% of the portfolio.

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4. Philip Morris International Inc. (NYSE:PM)

Maverick Capital’s Equity Stake: $172.4 million
Year-to-date gain: –9%

While Philip Morris International Inc. (NYSE:PM) is down by about 9% for the year, Maverick Capital increased its stakes by 307% in Q3 2023 to 1.8 million shares valued at $172.4 million.

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3. Amazon.com, Inc. (NASDAQ:AMZN)

Maverick Capital’s Equity Stake: $176.1 million
Year-to-date gain: 70%

Amazon.com, Inc. (NASDAQ:AMZN) has been one of the best-performing stocks in billionaire Ainslie’s portfolio, going by 70% year-to-date gain. 

Here is what Polen Capital said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2023 investor letter:

“Amazon continues to showcase it’s place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.

AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.

Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.

At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”

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2. Meta Platforms, Inc. (NASDAQ:META)

Maverick Capital’s Equity Stake: $176.2 million
Year-to-date gain: 179%

Meta Platforms, Inc. (NASDAQ:META) has been one of the best-performing stocks in Ainslie’s portfolio, a trend likely to continue into 2024 as the overall market remains bullish.

Maverick Capital increased its stakes in Meta Platforms, Inc. (NASDAQ:META) in Q3 2023 to 586,892 shares valued at $176.2 million, accounting for 3.97% of the portfolio.

In its Q3 2023 investor letter, Davis Funds said the following about Meta Platforms, Inc. (NASDAQ:META):

“In big technology, the huge price volatility of leaders like Meta Platforms can come with opportunity—trimming when prices are high and adding when they are low. For example, we added significantly to Meta last year at less than half of today’s price and have recently trimmed our position in Alphabet as its shares swung back into favor. For many years, we have referred to the leading online platforms such as Alphabet as the blue chips of tomorrow. Their economies of scale, network effects, strong competitive positions and profitable business models combine to make them some of the best businesses we have ever seen. Because of this success, these juggernauts have attracted waves of regulatory scrutiny and relentless negative press coverage. As a result of the ebb and flow of these controversies, investor sentiment can swing precipitously from euphoria to disgust, which can provide opportunities for price-conscious investors. While we are not short-term traders, the enormous price volatility of these online tech leaders has led us to be opportunistic, trimming when prices are high and adding when they are low. Recently, as these companies have swung back into favor, we have trimmed our holdings in Meta Platforms.”

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1. Coupang, Inc. (NYSE:CPNG)

Maverick Capital’s Equity Stake: $1.31 billion
Year-to-date gain: 6.07%

Coupang, Inc. (NYSE:CPNG) remains billionaire Lee Ainslie’s top stock pick heading into 2024 as a consumer-cyclical play that owns and operates a commerce business through mobile applications and internet websites in South Korea.

Here is what Baron Funds, an investment management firm, said about Coupang, Inc. (NYSE:CPNG) in its Q3 2023 investor letter:

“Coupang is a leading Korean e-commerce company founded in 2010. It went public in March of 2021, and we have been investors in this Fund since the IPO. After spending half a day with management, touring the company’s fulfillment center, asking questions, and learning more about the reasons behind the remarkable success the company has achieved over the last 13 years, we decided we wanted to own it in this Fund as well. When we originally invested in Coupang, our thesis was constructed around the company’s wide product selection, low prices, and unrivaled convenience thanks to its investments in an end-to-end infrastructure that covers over 70% of Korea’s population, enabling over 99% of orders to be delivered within one day or less, rather than the industry norm of two to three days, driving customer satisfaction, which translates to higher customer retention rates and lifetime value. We thought that Coupang would continue to gain market share in the U.S. $500 billion-plus Korean retail market, while expanding its offerings into additional categories, expanding its ecosystem via a third-party marketplace, and continuing to invest in infrastructure density to further capture inefficiencies, enhancing the customer experience, and improving profit margins. The company has since outperformed our expectations, growing its market share to 25% (#1 in the industry), despite not being a first mover, while building an unrivaled user experience with 99.8% of products delivered the next day (with the majority of them by dawn) and becoming profitable significantly faster than we expected. Our biggest takeaway from the visit was that despite all of Coupang’s success, there is still a long runway of growth ahead. For example, while most of the facility we visited is operated with pickers going to shelves to pick up items for orders, there was one room in which shelves drove themselves to pickers on the back of autonomous robots, which increased picker productivity by 3x. Additionally, while Coupang has been striving to reduce its reliance on distributors, which enables them to expand margins while lowering prices for consumers, a significant opportunity remains for further reduction. Lastly, we got plenty of examples of out-of-the-box thinking (no pun intended) from the company’s singulation process (improves the picking process by reducing the constraint to search for items order by order), decreasing use of boxes (80% of shipments are now boxless), enabling grocery delivery without cold-chain logistics (thanks to end-to-end supplychain efficiency), or how Coupang is able to fill trucks so that each carries more than 2x the parcels a UPS or a FedEx truck can, despite being half the size. The 4% free-cash-flow yield, which is also negatively impacted by the significant reinvestments the company is making into its emerging offerings, also contributed to our decision to add to our Coupang position upon returning to New York.

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