In this article, we discuss the top 10 large-cap stock picks of Goldman Sachs. If you want to see more stocks in this selection, check out Goldman Sachs Stock Portfolio: Top 5 Large-Cap Stock Picks.
Goldman Sachs is an American multinational investment bank and financial services company. The firm operates through Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management divisions. Goldman Sachs invests in municipal bonds, exchange traded funds, emerging markets, fixed income assets, workplace retirement solutions, buy-write strategies, and alternative assets.
Goldman Sachs has an equity portfolio worth more than $442.5 billion as of the end of the second quarter of 2022. The firm prioritizes investments in the finance, consumer discretionary, communications, healthcare, and information technology sectors. During Q2 2022, the Goldman Sachs stock portfolio featured 450 new purchases and additional purchases in 2602 stocks, whereas it sold out of 555 equities and trimmed holdings in 2565 stocks.
Some of the most notable large-cap stocks in the Goldman Sachs stock portfolio are Alibaba Group Holding Limited (NYSE:BABA), Block, Inc. (NYSE:SQ), and S&P Global Inc. (NYSE:SPGI).
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Our Methodology
We used Goldman Sachs’ stock portfolio for the second quarter of 2022 for this analysis. The stocks have been ranked according to the number of hedge fund holders. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022.
Goldman Sachs Stock Portfolio: Top Large-Cap Stock Picks
10. Akamai Technologies, Inc. (NASDAQ:AKAM)
Number of Hedge Fund Holders: 27
Akamai Technologies, Inc. (NASDAQ:AKAM) is a Massachusetts-based provider of cloud services for securing, delivering, and optimizing content and business applications online. In Q2 2022, the Goldman Sachs stock portfolio had nearly 31.5 million shares of Akamai Technologies, Inc. (NASDAQ:AKAM), worth $3.4 billion and representing 0.77% of the total holdings.
On October 3, investment advisory Truist noted that Akamai Technologies, Inc. (NASDAQ:AKAM) may be worth over $150 per share in a potential acquisition bid from an unidentified private equity firm. This valuation is based on a sum-of-the-parts approach.
Morgan Stanley analyst Keith Weiss on October 20 maintained an Equal Weight rating on Akamai Technologies, Inc. (NASDAQ:AKAM) but lowered the firm’s price target on the shares to $98 from $102. The analyst and the rest of the firm’s North American Software team are trimming estimates for the infrastructure software group “again” on the back of a weaker environment that will persist through 2023, though they acknowledge that soft investor expectations will “create some tactical opportunities” into the Q3 earnings reporting season.
According to Insider Monkey’s data, 27 hedge funds were bullish on Akamai Technologies, Inc. (NASDAQ:AKAM) at the end of June 2022, compared to 28 funds in the prior quarter. Anand Parekh’s Alyeska Investment Group is a prominent stakeholder of the company, with 971,237 shares worth $88.70 million.
In addition to Alibaba Group Holding Limited (NYSE:BABA), Block, Inc. (NYSE:SQ), and S&P Global Inc. (NYSE:SPGI), Akamai Technologies, Inc. (NASDAQ:AKAM) is one of the premier large-cap picks from the Goldman Sachs stock portfolio.
Here is what Nelson Capital Management has to say about Akamai Technologies, Inc. (NASDAQ:AKAM) in its Q2 2021 investor letter:
“In the technology sector, we sold our position in Akamai (tkr: AKAM). Akamai has benefitted from higher internet traffic during the pandemic, but we expect the company to face difficult comparable earnings results in 2021 and growth expectations going forward remain low.”
9. NRG Energy, Inc. (NYSE:NRG)
Number of Hedge Fund Holders: 29
NRG Energy, Inc. (NYSE:NRG) is a Texas-based energy company that engages in electricity generation, power transmission, and distribution. The Goldman Sachs stock portfolio held 28.2 million shares of NRG Energy, Inc. (NYSE:NRG) in the second quarter of 2022, worth over $3 billion and representing 0.68% of the total 13F securities.
On October 21, NRG Energy, Inc. (NYSE:NRG) declared a $0.35 per share quarterly dividend, in line with previous. The dividend is payable on November 15, to shareholders of the company as of November 1. The dividend yield on November 3 came in at 3.23%.
Among the hedge funds tracked by Insider Monkey, NRG Energy, Inc. (NYSE:NRG) was part of 29 public stock portfolios at the end of Q2 2022, compared to 31 in the earlier quarter. Richard S. Pzena’s Pzena Investment Management is the largest position holder in the company, with 16.5 million shares worth $631 million.
8. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 39
ON Semiconductor Corporation (NASDAQ:ON) is an Arizona-based company that provides intelligent sensing and power solutions worldwide. The company promotes the electrification of the automotive industry and sustainable energy for solar strings, industrial power, and storage systems. Securities filings for Q2 2022 reveal that the Goldman Sachs stock portfolio featured nearly 20.4 million ON Semiconductor Corporation (NASDAQ:ON) shares, worth $2.3 billion and representing 0.53% of the total holdings.
On October 31, ON Semiconductor Corporation (NASDAQ:ON) reported its Q3 results, posting a Q3 non-GAAP EPS of $1.45 and a revenue of $2.2 billion, topping Wall Street estimates by $0.14 and $80 million, respectively. The revenue climbed nearly 26% year-over-year in Q3 2022.
Susquehanna analyst Christopher Rolland on November 1 maintained a Positive rating on ON Semiconductor Corporation (NASDAQ:ON) but lowered the price target on the shares to $80 from $82. The analyst noted that ON Semiconductor Corporation (NASDAQ:ON) posted better than forecasted results, but slightly mixed Q4 guidance as Consumer/Compute/Industrial weighed. He also said that gross margins and a larger 2023 capex were disappointing.
According to Insider Monkey’s data, 39 hedge funds were long ON Semiconductor Corporation (NASDAQ:ON) at the end of June 2022, compared to 48 funds in the last quarter. Jeffrey Smith’s Starboard Value LP is the largest position holder in the company, with 5.6 million shares worth $282.6 million.
Here is what Artisan Partners specifically said about ON Semiconductor Corporation (NASDAQ:ON) in its Q2 2022 investor letter:
“ON Semiconductor Corporation (NASDAQ:ON) is a global market leader in power management and image sensors. The company reported 49% gross margins in 1Q22 which met the new management team’s 48%-50% long-term target after revising it higher just one quarter ago. We believe ON has a clear path to >50% gross margins, and its financial results reflect the ongoing structural improvements in both manufacturing and products, cost initiatives, product mix and rising prices. Growing demand for chips in electric vehicles, renewable energy infrastructure, advanced driver assistance (multiple cameras), factory automation and machine vision should drive sustainable high single-digit top-line growth. With shares trading at an attractive discount to our PMV estimate, we continued to move this holding up the Crop of the portfolio.”
7. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 40
SolarEdge Technologies, Inc. (NASDAQ:SEDG) is an Israel-based company that designs, develops, and commercializes direct current optimized inverter systems for solar photovoltaic installations worldwide. The company operates through five segments – Solar, Energy Storage, e-Mobility, Critical Power, and Automation Machines. In Q2 2022, the Goldman Sachs stock portfolio featured 16.5 million shares of SolarEdge Technologies, Inc. (NASDAQ:SEDG), worth approximately $2 billion and representing 0.44% of the total holdings.
On October 25, B. Riley analyst Christopher Souther maintained a Buy recommendation on SolarEdge Technologies, Inc. (NASDAQ:SEDG) but trimmed the price target on the shares to $377 from $385. The analyst lowered gross margin estimates for Q4 and early 2023 to factor in expectations that the forex headwinds will take another two quarters or more to stabilize.
According to Insider Monkey’s Q2 data, 40 hedge funds were long SolarEdge Technologies, Inc. (NASDAQ:SEDG), compared to 47 funds in the prior quarter. Ian Simm’s Impax Asset Management is the biggest position holder in the company, with 580,909 shares worth $158.20 million.
Here is what ClearBridge International Growth EAFE Portfolio has to say about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q2 2022 investor letter:
“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”
6. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is one of the top large-cap picks from the Goldman Sachs stock portfolio. The investment firm owned 23.7 million Ford Motor Company (NYSE:F) shares in the second quarter of 2022, worth $2.16 billion and representing 0.48% of the total 13F securities.
On October 26, Ford Motor Company (NYSE:F) declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on December 1, to shareholders of the company as of November 15. The dividend yield on November 3 came in at 4.59%. The company is gradually resuming the share repurchase authorization, and the board approved up to 35 million common shares for buybacks.
On October 27, following what he calls a “mostly in-line” quarter from Ford Motor Company (NYSE:F) and fiscal year guidance for $11.5 billion in adjusted EBIT that was about $1 billion ahead of his estimate, Morgan Stanley analyst Adam Jonas said that he views Ford Motor Company (NYSE:F)’s decision to shut down its Argo robotaxi business as “a positive that investors will appreciate over time.” He has an Overweight rating and a $14 price target on Ford Motor Company (NYSE:F) shares.
According to Insider Monkey’s data, 46 hedge funds were long Ford Motor Company (NYSE:F) at the end of the second quarter of 2022, with combined stakes worth roughly $609 million. D E Shaw is a prominent position holder in the company, with more than 23 million shares valued at $257.6 million.
Like Alibaba Group Holding Limited (NYSE:BABA), Block, Inc. (NYSE:SQ), and S&P Global Inc. (NYSE:SPGI), Ford Motor Company (NYSE:F) is one of the prominent large-cap plays in the Goldman Sachs stock portfolio.
Here is what Leaven Partners has to say about Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), have recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6% from 7.2% in early August and slashing full-year profit growth to 4.5%.”
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Disclosure: None. Goldman Sachs Stock Portfolio: Top 10 Large-Cap Stock Picks is originally published on Insider Monkey.
