George Soros Stock Portfolio: Top 5 Large-Cap Stock Picks

In this article, we discuss the top 5 large-cap stock picks from George Soros’ stock portfolio. If you want to see more stocks in this selection, check out George Soros Stock Portfolio: Top 10 Large-Cap Stock Picks. 

5. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 71

QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based company specializing in the development and commercialization of foundational technologies for the wireless industry worldwide. As of Q2 2022, the George Soros stock portfolio holds 229,582 shares of QUALCOMM Incorporated (NASDAQ:QCOM) worth $29.3 million. The hedge fund strengthened its hold on the stock by 49% in the June quarter. 

On November 2, QUALCOMM Incorporated (NASDAQ:QCOM) reported a FQ4 non-GAAP EPS of $3.13, in line with market consensus. The revenue of $11.4 billion climbed 22.1% year-over-year, outperforming Street estimates by $40 million. There has been an inventory surplus in the semiconductor sector, given a quick deterioration in demand and the easing of supply constraints. The company now expects a Q1 FY2023 revenue of $9.2 billion to $10 billion, versus a consensus revenue estimate of $12.05 billion. QUALCOMM Incorporated (NASDAQ:QCOM) forecasts a Q1 non-GAAP EPS of $2.25-$2.45, compared to a consensus EPS estimate of $3.43.

HSBC analyst Frank Lee on October 24 initiated coverage of QUALCOMM Incorporated (NASDAQ:QCOM) with a Buy rating and a $180 price target. QUALCOMM Incorporated (NASDAQ:QCOM) has “the most complete technology offering of any chip maker,” especially in modems and radio frequency front end connectivity chips, the analyst told investors. He believes this will allow QUALCOMM Incorporated (NASDAQ:QCOM) to enhance its product portfolio beyond the weak smartphone segment into autos and internet-connected devices. 

According to Insider Monkey’s Q2 data, 71 hedge funds were bullish on QUALCOMM Incorporated (NASDAQ:QCOM), compared to 73 funds in the prior quarter. Alkeon Capital Management is a prominent position holder in the company, with 4.2 million shares worth over $541 million. 

In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ:QCOM) was one of them. Here is what the fund said:

“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker QUALCOMM Incorporated (NASDAQ:QCOM), which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”

4. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 72

The George Soros stock portfolio boosted its NIKE, Inc. (NYSE:NKE) stake by 18% in the second quarter of 2022, holding 348,235 shares worth $36.6 million, representing 0.63% on the total 13F securities. Soros Fund Management has owned a stake consistently in the American apparel and athleisure company since Q4 2020, although it initially invested in NIKE, Inc. (NYSE:NKE) back in Q4 2010. 

On October 13, Raymond James analyst Rick Patel initiated coverage of NIKE, Inc. (NYSE:NKE) with an Outperform rating and a $99 price target. The stock is down year-to-date, crushed by industry-related constraints and macro headwinds, and the analyst expects a “challenging” second half of the year. While it is impossible to call the trough in equities, the analyst believes investors should adopt a longer-term view.

According to Insider Monkey’s data, 72 hedge funds were bullish on NIKE, Inc. (NYSE:NKE) at the end of the second quarter of 2022, compared to 67 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 8.5 million shares valued at $873 million. 

Here is what Leaven Partners has to say about NIKE, Inc. (NYSE:NKE) in its Q3 2022 investor letter:

“Nike: NKE shares were a top detractor this quarter on higher inventory balances leading to lower-than-expected gross margins for the next couple of quarters. The company reported 1Q23 sales and EPS beats, but freight costs, markdowns, and the strong dollar weighed on gross margins. Nike continues to expect low double-digit currency-neutral sales growth, but the strong dollar will reduce overall sales growth and discounted inventory will further reduce gross margins for the year.

Nike is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $46 billion in revenue, $6 billion in 2021 annual free cash flow, and over $4 billion of excess cash. After working through its near-term currency and gross margin issues, we expect the company to return towards management’s guidance of at least 10% annual revenue growth, and return to its accelerating profit growth, as longer-term we expect margins to be materially aided by rising average sales prices (from both increased pricing and a mix shift to more premium products), the company’s deep innovation pipeline, a secular shift from the company’s traditional wholesale channels to a more direct-to-consumer approach (now 35% of revenues up from 16% ten years ago), and a more streamlined supply chain. We believe that the continued global secular growth trend towards active wear will continue to aid Nike’s top-line growth, while we expect the combined gross and operating margin improvements from its initiatives will drive long-term mid-teens or higher annual EPS growth for the foreseeable future.”

3. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 75

Intuit Inc. (NASDAQ:INTU) is a California-based company specializing in financial management and compliance products and services in the United States, Canada, and internationally. The company operates through four segments – Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect. George Soros’ hedge fund boosted its Intuit Inc. (NASDAQ:INTU) stake by 24% in Q2 2022, holding 76,574 shares worth $29.5 million. 

After Intuit Inc. (NASDAQ:INTU) revealed that Credit Karma has experienced more deterioration during the last few weeks of the first quarter, but at the same time reported that Q1 results are forecasted to be ahead of guidance and reaffirmed its full-year FY23 operating income and EPS guidance, Morgan Stanley analyst Keith Weiss said that this pre-announcement raises confidence in the primary business, despite Credit Karma and Mailchimp weakness. Reiterating FY23 targets indicates management’s commitment to achieving profitability, “which should be rewarded by investors,” added the analyst, who maintained an Overweight rating and a $550 price target on Intuit Inc. (NASDAQ:INTU) shares on November 2. 

According to the second quarter database of Insider Monkey, 75 hedge funds were long Intuit Inc. (NASDAQ:INTU), compared to 82 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 2.3 million shares worth $914 million. 

Here is what RiverPark Large Growth Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q3 2022 investor letter:

“We took advantage of its 2022 price decline to add a small position in Intuit. INTU is a leading SaaS software solutions provider to small businesses, consumers, and professional accountants, best known for its QuickBooks accounting and TurboTax tax preparation platforms. INTU recently strengthened its personal finance offerings with the acquisitions of Mint and Credit Karma, and its small business offering with the acquisition of email marketing platform Mailchimp. The company is benefitting from the secular shift to digitization for both businesses and consumers. Given its vast amount of valuable personal finance and tax customer data from its 100 million + customer installed base, the company can apply artificial intelligence to the data to generate actionable intelligence for customers, as well as a large cross-selling opportunity across its products.

Given INTU’s less than 5% penetration of its $300 billion market, we believe the company can grow its top-line mid-teens, while improving its high-margin business model of greater than 80% gross margins and greater than 35% EBITDA margin, leading to high-teens EPS growth for the foreseeable future. At about 2% of revenue, the company also requires limited capital expenditures, producing significant and growing FCF, which INTU has used for acquisitions, a small dividend, debt repayment and stock buybacks.”

2. T-Mobile US, Inc. (NASDAQ:TMUS)

Number of Hedge Fund Holders: 96

T-Mobile US, Inc. (NASDAQ:TMUS) is a Washington-based company that provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The George Soros stock portfolio held 317,556 shares of T-Mobile US, Inc. (NASDAQ:TMUS) in Q2 2022, worth $42.7 million and representing 0.76% of the total securities. Soros Fund Management increased its T-Mobile US, Inc. (NASDAQ:TMUS) stake by 12% in the June quarter. Despite missing market estimates on Q3 financial results, investors are positive on the stock given the subscriber strength and an optimistic outlook.

On October 28, Cowen analyst Paul Gallant raised the price target on T-Mobile US, Inc. (NASDAQ:TMUS) to $201 from $187 and kept an Outperform rating on the shares. The analyst said that the company reported strong Q3 results highlighted by market-leading phone adds, attractive churn upside, upside margins, and raised 2022 guidance. 

According to Insider Monkey’s data, 96 hedge funds were long T-Mobile US, Inc. (NASDAQ:TMUS) at the end of Q2 2022, compared to 91 funds in the earlier quarter. Andreas Halvorsen’s Viking Global is the largest position holder in the company, with 9.17 million shares worth $1.23 billion. 

In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc. (NASDAQ:TMUS):

“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”

1. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 116

Salesforce, Inc. (NYSE:CRM), an American provider of customer relationship management technology, is one of the top large-cap picks from the George Soros stock portfolio. The hedge fund strengthened its hold on Salesforce, Inc. (NYSE:CRM) by 139% in Q2 2022, with 627,509 shares worth $103.5 million, representing 1.84% of the total 13F portfolio. Salesforce, Inc. (NYSE:CRM) stock climbed on October 18 as activist Jeff Smith’s Starboard Value took up a “significant” stake in the company.

Piper Sandler analyst Brent Bracelin on October 20 maintained an Overweight rating on Salesforce, Inc. (NYSE:CRM) but lowered the firm’s price target on the shares to $175 from $200. “Software valuations might be nearing a bottom, but fundamentals are not,” the analyst wrote in a research note. He sees multiple factors that could further challenge billings, revenue, and free cash growth estimates into 2023, and he “proactively” trimmed growth assumptions and targets across software “to better reflect these elevated near-term risks.”

According to Insider Monkey’s Q2 data, 116 hedge funds were bullish on Salesforce, Inc. (NYSE:CRM), compared to 114 funds in the prior quarter. Harris Associates is a significant stakeholder of the company, with more than 5 million shares valued at $829 million.

Here is what Cooper Investors Global Equities Fund has to say about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:

“It seems unfashionable to discuss technology stocks given the current market mood, but we are observing positive signs from US software companies in terms of their journey along the ‘HubrisHumility’ cycle. We have trimmed and concentrated our software exposure significantly over the last 18 months down to two cloud-native SAAS players, Workday and Salesforce. We met with both businesses during our trip and came away encouraged from language indicating increased focus on profitability and cost control.

We see significant optionality in these businesses to grow at the same time as expanding margins and free cash flow. The discussions increased our conviction that returns on capital are now becoming a priority for CEOs and CFOs in this sector who are talking for the first time about cost discipline, reduced capex, more measured hiring practices, a reduction in the level of stock-based compensation and scaled back M&A ambitions. Salesforce in a recent earnings update announced its first ever buyback for US$10bn…” (Click here to see the full text)

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