In this article, we will take a look at billionaire Steve Cohen’s top technology stocks. If you want to see more of billionaire Steve Cohen’s top technology stocks, go directly to Billionaire Steve Cohen’s Top 5 Technology Stocks.
Billionaire Steve Cohen is the founder of Point72 Asset Management, a global asset manager that uses discretionary long/short equity, systemic and macro investing strategies. Previously, Cohen founded a similar firm called SAC Capital that used both fundamental and quantitative analysis based strategies.
Given the success of SAC Capital and Point72 Asset Management, Steve Cohen is one of the richest men in the world with a net worth of $12.8 billion.
Steve Cohen was born in New York and graduated from the University of Pennsylvania’s Wharton School with a degree in economics. Later Cohen worked as an options trader at a brokerage called Gruntal & Co before he started SAC Capital Advisors in 1992. Given a history of strong returns, Cohen was able to charge fees on some funds as high as 3 percent of assets and 50 percent of profits versus the traditional 2 percent of assets and 20 percent of profits.
Due to a lawsuit, Cohen had to pay a fine and convert SAC Capital to a family office which he renamed Point72 Asset Management. In addition to own a lot of stocks through Point72 Asset Management, Cohen owns a majority stake in the New York Mets.
In terms of Point72 Asset Management’s performance in 2022, it’s likely that the fund is up this year as Bloomberg Billionaires Index shows that Cohen’s net worth has increased 16.4% year to date as of November 19, 2022. According to Bloomberg, $9.14 billion of Cohen’s $12.8 billion total net worth is in Point72 Asset Management.
Top Tech Positions for Point72 Asset Management
In terms of Point72 Asset Management’s 13F portfolio, it seems Cohen isn’t holding as many blue chip tech stocks among its top 10 tech positions as some other top funds are. Companies like Apple, for example, don’t even make the list among Cohen’s top 10 tech stocks. Meanwhile, other stocks like Amazon don’t account for much of the fund’s total 13F equity portfolio as they do in the S&P 500 index.
Meanwhile, some stocks that have fallen substantially year to date have made it into Cohen’s top 5 tech positions. Given Point72 Asset Management is a trading firm, it might not hold on to positions for very long.
2022 has been a challenging year for the broader markets given high inflation has caused the Federal Reserve to raise interest rates substantially and the S&P 500 index has declined by 17.3% year to date as a result. Given growth stocks have been affected by the market decline, many tech stocks have also declined year to date. If economic data fails to meet expectations, there could be further downside. Given the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors.
Methodology
For our list of Billionaire Steve Cohen’s Top 10 Technology Stocks, we took 10 tech stocks from Steve Cohen’s Point72 Asset Management’s top equity positions according to 13F filings at the end of Q3 2022 and ranked them based on the fund’s stake in the stocks at that time.
Billionaire Steve Cohen’s Top 10 Technology Stocks
10. Oracle Corporation (NASDAQ:ORCL)
Point72 Asset Management’s Stake Value as of 9/30: $183,651,000
Percentage of Point72 Asset Management’s 13F Portfolio as of 9/30: 0.73%
Point72 Asset Management more than doubled its shares in database and enterprise software giant Oracle Corporation (NASDAQ:ORCL) in Q3 to end the quarter with a position worth over $183 million. Since September 30, Oracle Corporation (NASDAQ:ORCL) has performed well as the stock has rallied from $61.07 per share to $79.73 as of 11/19 given the broader market rally. On 10/21, Michael Turits of KeyBanc upgraded the stock to ‘Overweight’ from ‘Sector Weight’ and set a $80 price target. In terms of EPS estimates, analysts expect ORCL to earn $4.75 in 2022, $4.92 in 2023, $5.58 in 2024, and $6.33 in 2025.
9. Analog Devices, Inc. (NASDAQ:ADI)
Point72 Asset Management’s Stake Value as of 9/30: $198,235,000
Percentage of Point72 Asset Management’s 13F Portfolio as of 9/30: 0.79%
Steve Cohen’s fund raised his share count in semiconductor maker Analog Devices, Inc. (NASDAQ:ADI) by 149% in Q3 to end September with a stake value of almost $200 million. Although the company is facing headwinds given slowing demand in the auto and industrial sector, analysts estimate Analog Devices, Inc. (NASDAQ:ADI) will earn $9.52 per share in 2023 and $10.31 per share in 2024 versus its 2021 EPS of $6.42. If it can increase earnings per share as expected, there is a decent chance Analog Devices, Inc. (NASDAQ:ADI) can also increase its quarterly dividend of $0.76 per share.
8. Amazon.com, Inc. (NASDAQ:AMZN)
Point72 Asset Management’s Stake Value as of 9/30: $207,678,000
Percentage of Point72 Asset Management’s 13F Portfolio as of 9/30: 0.82%
With Point72 Asset Management’s stake value of over $207 million at the end of Q3, e-commerce and cloud computing giant Amazon.com, Inc. (NASDAQ:AMZN) is billionaire Steve Cohen’s 8th largest 13F equity tech position. Given how big Amazon.com, Inc. (NASDAQ:AMZN) is, Point72 Asset Management is actually underweight the stock as it accounts for 0.82% of the fund’s 13F portfolio versus Amazon.com, Inc. (NASDAQ:AMZN)’s 4.05% weight in the S&P 500. Given higher inflation, growth is slowing for Amazon.com, Inc. (NASDAQ:AMZN). In terms of Q4 guidance, Amazon.com, Inc. (NASDAQ:AMZN) expects sales growth of 2% to 8% year over year, which would be a substantial slowdown from Q3’s 15% growth. Although Amazon is factoring in a 4.6% unfavorable impact from foreign exchange rates, the low end to middle part of the range still indicates softening of demand.
Diamond Hill Capital Management commented on Amazon.com, Inc. (NASDAQ:AMZN) in a Q2 2022 investor letter,
Amazon.com, Inc. (NASDAQ:AMZN)’s shares underperformed as valuations of fast-growing companies continued to compress in Q2. Amazon’s growth investments over the past two years have pressured earnings as consumer demand has been weaker than anticipated. However, we believe the company will be able to grow into its infrastructure investments over time. These investments have obscured the magnitude of sustainable free cash flow as well as the attractive valuation of the business relative to peers.
7. Microsoft Corporation (NASDAQ:MSFT)
Point72 Asset Management’s Stake Value as of 9/30: $222,971,000
Percentage of Point72 Asset Management’s 13F Portfolio as of 9/30: 0.89%
Microsoft Corporation (NASDAQ:MSFT) ranks #7 on our list of Billionaire Steve Cohen’s Top 10 Technology Stocks given Point72 Asset Management’s stake value of almost $223 million at the end of Q3. Like Amazon, Point72 Asset Management is arguably underweight the stock as Microsoft Corporation (NASDAQ:MSFT) accounts for 0.89% of the fund’s 13F portfolio versus Microsoft Corporation (NASDAQ:MSFT)’s 5.6% weight in the S&P 500. If the economy slows more than expected, demand for new computers might not be as strong. As a result, demand for Microsoft’s computer operating systems might soften.
6. Arista Networks, Inc. (NYSE:ANET)
Point72 Asset Management’s Stake Value as of 9/30: $223,286,000
Percentage of Point72 Asset Management’s 13F Portfolio as of 9/30: 0.89%
Point72 Asset Management inched up its share count in computer network maker Arista Networks, Inc. (NYSE:ANET) by 5% in the third quarter to end Q3 with a position of over $223 million. On November 7, Sami Badri of Credit Suisse raised his price target to $140 from $119 and kept a ‘Neutral’ rating on Arista Networks, Inc. (NYSE:ANET) after attending the company’s 2022 analyst day. Shares of Arista Networks, Inc. (NYSE:ANET) are down just 5.75% year to date versus the NASDAQ index’s decline of almost 30% year to date.
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Disclosure: None. Billionaire Steve Cohen’s Top 10 Technology Stocks is originally published on Insider Monkey.
