We recently compiled a list of the 10 Best Tech Stocks to Buy According to Brad Gerstner. In this article, we are going to take a look at where Coupang, Inc. (NYSE:CPNG) stands against the other tech stocks.
Gerstner is Bullish on Tech in 2024
On December 1, 2023, Brad Gerstner, the CEO of Altimeter Capital, appeared in an interview on CNBC where he explained that tech stocks are expected to outperform non-tech stocks in 2024. Over the past 10 years, tech earnings have compounded at almost 16% and non-tech earnings have compounded at 6%. 2023 was a rebound year for the tech industry after a downturn in 2022 due to rising interest rates. Big Tech companies and their operational efficiencies have poised them for strong growth. While inflation and interest rates will determine what goes down, companies that have invested in augmented intelligence will experience secular growth. Gerstner thinks that the spread between 16% and 6% will be a recurring trend in 2024.
Gerstner Thinks Now is the Right Time to Invest in Tech
On June 11, Brad Gerstner made another appearance on CNBC and addressed the speculation surrounding the software industry. Gerstner suggested that despite headwinds, the software industry is still valuable as companies and startups are still making deals. Gerstner believes there are three main reasons for the downward trajectory of the software industry. He thinks that CEOs and CTOs are cautious when it comes to making investments in software. Executives want a clearer picture of the AI boom before making risky investments. Moreover, interest rates are higher than expectations, due to delayed rate cuts and compressing multiples. Lastly, general uncertainty about the future has been detrimental to the growth of the software industry. Gerstner pointed out that since the software industry is trading at 20% below its ten-year average, this may be the best time to allocate stakes in software companies. You can also take a look at the best Robinhood stocks under $20.
Gerstner thinks data and databases are extremely vital to AI applications. He thinks that companies using data to power AI are far ahead of companies simply automating services. Big Tech companies have data at the forefront of all their artificial intelligence applications. You can also read our piece on the stocks hedge funds are crazy about right now.
Brad Gerstner is bullish on tech, and particularly software and AI. In Q1 2024, he initiated 6 new positions and also raised his stakes in 2 stocks, ending the quarter with a portfolio of $6.5 billion in 13F securities. With that, let’s discuss his top tech stock picks.
Our Methodology
We scanned Altimeter Capital’s Q1 portfolio and picked growth stocks from the fund’s top 13F holdings. Additionally, we’ve also added overall hedge fund sentiment, as of Q1 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Note: All pricing data is as of June 28.
A woman holding a laptop, wearing a graphic t-shirt, casually checking her e-commerce order.
Coupang, Inc. (NYSE:CPNG)
Altimeter Capital’s Stake Value: $70,570,173
Number of Hedge Fund Holders: 66
Coupang, Inc. (NYSE:CPNG) is Brad Gerstner’s 10th largest holding. Coupang, Inc. (NYSE:CPNG) is an e-commerce company based in South Korea and Washington. The company has more than 100 unique fulfillment centers that have millions of products. Coupang’s AI enables fast deliveries, volume order production, and system coordination. Its automated guided vehicles (AGVs) can bring hundreds of items to workstations within 2 minutes or less, reducing employee workload by 65%. The company is also home to a rapidly growing fleet of electric vehicle Coupang Cars, accounting for 50% of the company’s fleet in Jeju, South Korea.
While software companies are experiencing decelerating growth rates, Gerstner holds a positive outlook on the industry and expects companies with data at the forefront of software and AI to stand out. In the words of Brad Gerstner, “Smart money, I think, is to buy into software.” Aligning with his views, Coupang, Inc. (NYSE:CPNG) is making conscious use of AI to advance its operations and deliver enhanced customer experiences.
At the close of Q1 2024, 66 hedge funds were bullish on Coupang, Inc. (NYSE:CPNG), with total stakes amounting to $3.09 billion. Wall Street analysts hold a consensus buy opinion on CPNG. Shares have gained 34.08% year-to-date. Based on price targets from 18 analysts, the Street’s median price target of $27.69 implies an upside of 31% from current levels.
Overall CPNG ranks 10th on our list of the best tech stocks to buy according to Brad Gerstner. You can visit 10 Best Tech Stocks to Buy According to Brad Gerstner to see the other tech stocks that are on hedge funds’ radar. While we acknowledge the potential of CPNG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CPNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.