Goldman Sachs Tech Stocks: Top 5 Stock Picks

In this article, we discuss the top 5 tech stock picks of Goldman Sachs. If you want to read our detailed discussion about the tech industry, head directly to Goldman Sachs Tech Stocks: Top 12 Stock Picks.

5. Alphabet Inc. (NASDAQ:GOOG)

Goldman Sachs’ Stake Value: $4,231,186,797

Number of Hedge Fund Holders: 155

Alphabet Inc. (NASDAQ:GOOG) is one of the top Goldman Sachs tech stocks. On July 25, the company announced a Q2 GAAP EPS of $1.44, exceeding Street consensus by $0.10. The revenue increased 7% year-over-year to $74.6 billion, surpassing market expectations by $1.84 billion. As of Q1 2023, Goldman Sachs held a significant position in Alphabet Inc. (NASDAQ:GOOG), comprising 40.8 million shares worth $4.23 billion.

According to Insider Monkey’s first quarter database, 155 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG). In comparison, 152 funds were invested in the company during the preceding quarter. Harris Associates held the largest stake in the company, with approximately 37 million shares valued at $3.83 billion.  

Weitz Partners III Opportunity Fund said this about Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2023 investor letter:

“The year-to-date top contributors Microsoft Corp. (MSFT) and Google parent Alphabet Inc. (NASDAQ:GOOG) (also a top quarterly contributor) have generated an enormous volume of AI-centric headlines. Both are at the vanguard of introducing AI-powered technologies into consumer-facing products, most notably their respective search engine. We trimmed several of the year’s winners on strength, including Meta, Microsoft, Alphabet, CoStar Group, Inc. (CSGP), and CarMax.”

4. NVIDIA Corporation (NASDAQ:NVDA)

Goldman Sachs’ Stake Value: $4,284,591,989

Number of Hedge Fund Holders: 132

NVIDIA Corporation (NASDAQ:NVDA) is a market leader in the provision of graphics, commuting, semiconductors, and networking solutions. At the end of Q1 2023, Goldman Sachs held a position worth $4.28 billion in NVIDIA Corporation (NASDAQ:NVDA). It is one of the top Goldman Sachs tech stocks. 

On August 9, Citi analyst Atif Malik maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) with a price target of $560. Malik wrote in a research note to investors: 

“This falls in line with our expectations that NVIDIA will provide new versions of its AI accelerators with higher bandwidth and capacity given AMD’s strategy to offer more in-chip memory in its upcoming MI300 GPUs than the H100.”

According to Insider Monkey’s first quarter database, 132 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), as opposed to 106 hedge funds in the last quarter. Rajiv Jain’s GQG Partners is one of the leading shareholders in the company, with 8.2 million shares valued at $2.29 billion. 

Polen Focus Growth Strategy stated this about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

NVIDIA Corporation (NASDAQ:NVDA) was the largest relative headwind to the Portfolio as we do not own this “AI darling.” NVIDIA shares rose more than 50% in the second quarter alone, following a 90% increase in the share price in the first quarter of 2023. NVIDIA supplies GPUs (graphics processing units), the preferred (often necessary) semiconductors for machine learning and AI. On their recent earnings call, NVIDIA management announced that they expect a significant increase in demand for the GPUs for datacenter customers beginning this quarter and lasting at least through the end of this year. NVIDIA’s datacenter business, which was almost non-existent from a revenue perspective eight years ago, is now the company’s largest and fastest-growing business.

We find NVIDIA’s competitive advantages to be quite large around its technology, but even more importantly around its full-stack solutions, including highly integrated hardware, software, and networking equipment and a robust developer ecosystem. It would be difficult to disrupt these competitive advantages in our view. That said, with a greater than $1 trillion valuation on the back of what feels like peak-level AI exuberance since OpenAI’s breakthrough with ChatGPT, we believe virtually all the upside opportunities we can currently see for the company are already priced in…” (Click here to read the full text)

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

Goldman Sachs’ Stake Value: $4,907,650,282

Number of Hedge Fund Holders: 243

Amazon.com, Inc. (NASDAQ:AMZN) is yet another prominent Goldman Sachs tech stock. On August 3, Amazon.com, Inc. (NASDAQ:AMZN) announced a Q2 EPS of $0.65 and a revenue of $134.3 billion, beating Wall Street estimates by $0.31 and $2.96 billion, respectively. At the end of Q1 2023, Goldman Sachs held 47.5 million shares of Amazon.com, Inc. (NASDAQ:AMZN) worth $4.91 billion.

According to Insider Monkey’s first quarter database, a total of 243 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN). During the prior quarter, 240 hedge funds were invested in the company. Harris Associates held the largest stake in the company, with 22.8 million shares valued at $2.3 billion. 

Weitz Partners III Opportunity Fund had this to say about Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2023 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) was another top performer for the quarter and year-to-date, also with an AI role to play. AI systems require massive computational resources, meaning that as these technologies become more pervasive for businesses of all sizes, customers will increasingly lean on cloud computing platforms like Amazon Web Services to harness the benefits.”

2. Microsoft Corporation (NASDAQ:MSFT)

Goldman Sachs’ Stake Value: $12,016,868,237

Number of Hedge Fund Holders: 289

Microsoft Corporation (NASDAQ:MSFT) is yet another one of Goldman Sachs’ top tech stocks. On June 14, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, in line with previous. The dividend is payable on September 14, to shareholders of record as of August 17. At the conclusion of Q1 2023, Goldman Sachs owned 41.6 million shares of Microsoft Corporation (NASDAQ:MSFT) worth just over $12 billion.

According to Insider Monkey’s first quarter database, 289 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), up from 259 funds during the previous quarter. Bill & Melinda Gates Foundation Trust is the biggest shareholder in the company, with 39.2 million shares worth $11.3 billion. 

Third Point Management made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2023 investor letter:

“While our gross equity exposure is still modest (below 100% on the long side), we have increased our nets to 70% as of this writing and 77% on a beta adjusted basis. About 45% of that net long exposure is composed of direct and indirect AI beneficiaries trading at reasonable valuations. We have sized up our investments in certain cloud software businesses including Microsoft Corporation (NASDAQ:MSFT), a clear AI winner as a result of its rapidly growing Azure cloud business, upside from applying AI features to its core Office products, investment in Open AI, and ability to provide AI services to other companies (for example, Microsoft holds a stake in one of our portfolio companies, LSE, which it is also assisting in harnessing greater value in its data via AI).”

1. Apple Inc. (NASDAQ:AAPL)

Goldman Sachs’ Stake Value: $14,726,822,198

Number of Hedge Fund Holders: 131

Apple Inc. (NASDAQ:AAPL) is the largest tech position in the Goldman Sachs portfolio. Securities filings for Q1 2023 reveal that Goldman Sachs held 89.3 million shares of Apple Inc. (NASDAQ:AAPL), amounting to $14.72 billion and representing 3.14% of the total 13F portfolio. On August 3, Apple Inc. (NASDAQ:AAPL) announced a quarterly dividend per share of $0.24, which is payable on August 18 to shareholders of record as of August 14. 

According to Insider Monkey’s first quarter database, 131 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 135 funds during the last quarter. Warren Buffett’s Berkshire Hathaway is the largest stockholder in the company, with 915 million shares worth $151 billion. 

Choice Equities Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:

“Dramatic valuation differences across market cap sizes continue. This has been the case for some time now. Perhaps I have spent too much time discussing these dichotomies, as generally, I feel like if we pick the right stocks and manage market exposures thoughtfully, our equities- oriented portfolio will prosper across various market cycles. However, when markets become as lopsided as they have lately, I feel additional discussion on the market environment is worthwhile, if only to help highlight the opportunities that are available and the likely path forward. I expect future discussions to soon be focused again on our moderately concentrated portfolio. But for now, let’s take one last in-depth look at how far reaching these valuation dichotomies have again become.(Please note: charts that accompany the following can be found in the Appendix.)

Take Apple Inc. (NASDAQ:AAPL) for example. It is the largest stock by market cap, and fairly considered one of the best companies in the world. The company has been extraordinarily successful and improved standards of living everywhere in the process with their ubiquitous products. Along the way, shareholders have been richly rewarded, with shares increasing nearly fourteen-fold over the last ten years while generating an annualized total shareholder return of 31%, including dividends.

On the back of another big quarter for large cap tech, it is now the first stock to surpass the $3T market cap threshold. This makes its weighting in the ~$37T market cap of the S&P 500, ~8%. It also means this one stock’s market cap is larger than that of the entire ~$2.98T market cap of the Russell 2000 index, the first time in history a single stock has outweighed the Russell 2000 – aside from two brief days in September 2020 when Apple’s market cap then accomplished the same…” (Click here to read the full text)

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