In this article, we will take a look at Ken Fisher’s top 15 growth stock picks. If you want to see more stocks in this selection, go to Ken Fisher’s Top 5 Growth Stock Picks.
The founder of Fisher Asset Management, Ken Fisher, believes that the market circumstances in 2023 will be similar to those in 1967. In an article posted in New York Post, Mr. Fisher highlighted that in 1966, inflation was also at a high level, along with concerns related to a possible recession. Furthermore, the US Federal Reserve was increasing the benchmark interest rates to combat the raging inflation while the war in Vietnam was escalating. In 1966, the S&P 500 Index experienced a decline of 22%. Similar to the market conditions in 2022, the downfall in 1966 started in January, and the market bottomed out in October. The market staged a comeback in the fourth quarter of 1966 and recorded a gain of 6% for the three-month period, followed by a YoY rise of 24% in 1967. The comeback is again similar to the 7.2% gain experienced by the S&P 500 Index since October 1 this year.
In one of his talks with Fox Business, Mr. Fisher said that the YoY growth in loans had touched 11.5%, indicating that the US economy is unlikely to enter a recession now. However, Mr. Fisher underscored the significance of stock compound growth in bearish markets and emphasized how long-term investment in portfolios might contribute to high returns for investors during an economic downturn. Some of the popular companies included in Ken Fisher’s Q3 portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL).
Our Methodology
We have selected the top 15 growth stocks from the Q3 2022 portfolio of Fisher Asset Management. These stocks are actively gaining market share in their respective industries and have multiple growth catalysts to offer. Analysts expect these stocks to offer strong long-term returns to investors.
Ken Fisher’s Top 15 Growth Stock Picks
15. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 142
Fisher Asset Management’s Holdings: $510,429,000
Percentage of Fisher Asset Management’s Portfolio: 0.38%
Uber Technologies, Inc. (NYSE:UBER) is a San Francisco, California-based company that provides ride-hailing and food delivery services.
The company holds a 72% share in the US ride-hailing industry. Eric Sheridan at Goldman Sachs believes that in the current macroeconomic situation, Uber Technologies, Inc. (NYSE:UBER) is more focused on generating better bottom-line numbers and would be more controlled in making investments. The analyst added that themes like ordering food online for delivery and pickup have become more normalized after the COVID-19 pandemic and Uber Technologies, Inc. (NYSE:UBER) is a key player that can leverage this theme to support its growth momentum.
RiverPark Funds shared its outlook on Uber Technologies, Inc. (NYSE:UBER) in its Q3 2022 investor letter. Here’s what the firm said:
“Uber was our top contributor for the quarter on better-than-expected 2Q results, and 3Q EBITDA guidance that was well ahead of Street estimates. The company reported 33% Gross Bookings growth from both the continued recovery of Mobility Gross Bookings, up 55% year over year, and the continuation of Delivery Gross Bookings growth, up 7% year over year. Overall, revenue grew 105% year over year to $8 billion, generating $364 million of adjusted EBITDA, up $873 million year over year. Management guided to 25%-30% gross bookings growth and adjusted EBITDA of $440-$470 million for 3Q. Significantly, FCF was positive at $382 million, up $780 million year over year, and remains on track to be positive for the year allowing the company to self-fund future growth.
UBER remains the undisputed global leader in ride sharing, with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the expectation of substantial margin expansion and free cash flow generation to come. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 120 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage (the company had $1.8 billion in Freight revenue for 2Q22), and worker staffing for shift work. Given its $10 billion of cash and investments against $9 billion of debt, the company today has an enterprise value of $57 billion indicating that UBER trades at only 1.5x next year’s estimated revenue.”
14. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 74
Fisher Asset Management’s Holdings: $672,960,000
Percentage of Fisher Asset Management’s Portfolio: 0.5%
Broadcom Inc. (NASDAQ:AVGO) is a San Jose, California-based company that designs, develops, and manufactures a wide variety of semiconductor and infrastructure software solutions.
On December 14, Ross Seymore at Deutsche Bank increased the target price for Broadcom Inc. (NASDAQ:AVGO) stock from $575 to $590 and reiterated a Buy rating. The analyst highlighted that investors would be looking for a bottom in terms of fundamentals and share price in the semiconductor sector in 2023. Experts believe Broadcom Inc. (NASDAQ:AVGO) delivered stellar Q4 2022 results that outperformed consensus estimates. The company also provided stronger-than-expected guidance for 2023. Broadcom Inc.’s (NASDAQ:AVGO) end markets performed well overall, and its strong cash flows enabled a sizable 12% increase in dividends. The stock offers a dividend yield of 3.33% as of December 30.
ClearBridge Investments discussed its stance on Broadcom Inc. (NASDAQ:AVGO) in its Q4 2021 investor letter. Here’s what the firm said:
“However, ClearBridge portfolio companies are responding by supporting their workforces and showing resilience in adapting and thriving. Semiconductor companies ClearBridge owns and engages with have been successful in advancing vaccinations in their global supply chains. In Malaysia, for example, Broadcom has taken part in PIKAS, a public-private partnership vaccination program focusing on the workforce in critical manufacturing sectors. By the summer of 2021 Broadcom was able to get over 90% of workers in its Penang factory at least one dose of vaccine, and roughly 73% fully vaccinated. Companies in the program also pay the administration cost for vaccinations including cases where the employee is no longer employed by the company before full immunization of the employee.”
13. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 63
Fisher Asset Management’s Holdings: $830,364,000
Percentage of Fisher Asset Management’s Portfolio: 0.62%
Lam Research Corporation (NASDAQ:LRCX) is a Fremont, California-based provider of equipment required for wafer fabrication in the semiconductor industry founded in 1980.
On December 12, Sidney Ho at Deutsche Bank upgraded Lam Research Corporation’s (NASDAQ:LRCX) stock from a Hold to a Buy rating and also increased the target price by 30% from $400 to $520. The analyst highlighted that amongst the large-cap semiconductor equipment manufacturer, Lam Research Corporation (NASDAQ:LRCX) has the greatest memory exposure. The stock suffered in 2022 due to spending cuts by memory suppliers and export restrictions in China. However, the analyst anticipates a rebound in fortunes in 2024 as the spending on the memory industry is unsustainably low for 2023.
Here’s what Vulcan Value Partners said about Lam Research Corporation (NASDAQ:LRCX) in its Q1 2022 investor letter:
“Lam Research Corp. designs and manufactures equipment used in the fabrication of semiconductors. Recent supply chain issues have negatively impacted the industry and has resulted in chip shortages. The industry is performing well, exceeding our expectations, and Lam Research’s fundamentals remain strong. The long-term secular drivers of demand and growth in the industry continue to be very powerful. Lam Research is experiencing increasing returns on capital, higher margins, and more stable results.”
12. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 89
Fisher Asset Management’s Holdings: $ 1,228,825,000
Percentage of Fisher Asset Management’s Portfolio: 0.94%
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a Santa Clara, California-based company known for manufacturing leading processors, graphic processing units (GPUs), and other applications, tools, and software.
Advanced Micro Devices, Inc. (NASDAQ:AMD) stock was selected as the ‘Top pick’ in the semiconductor space by Joseph Moore at Morgan Stanley on December 15. The analyst has assigned Advanced Micro Devices, Inc. (NASDAQ:AMD) a Buy rating along with a target price of $77. Experts anticipate Advanced Micro Devices, Inc. (NASDAQ:AMD) to experience growth and gain market share in the cloud computing and server business in the coming quarters.
Here’s what L1 Capital International said about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q3 2022 investor letter:
“The share price of Advanced Micro Devices, Inc. (NASDAQ:AMD) was weak during the quarter and weakened further in early October when the pre-announced revenue was significantly below prior guidance, reflecting an acute slowdown in the PC market. Data centre related revenue grew strongly, albeit below our expectations, while gaming and embedded revenue was in line with our base case.
Geopolitical risks have increased for the semiconductor sector, with the U.S. Government announcing restrictions on the sale of certain technologies to China. Despite near term headwinds, AMD is well positioned for the medium term, with a technology lead over Intel in servers for data centres and rapidly gaining share in the PC/notebook sectors. Its gaming and embedded applications continue to grow strongly. AMD is a very capital light business, with manufacturing outsourced. After expending nearly $5b on research and development, AMD generates around $5b of free cashflow. With a net cash balance sheet, we expect management will accelerate buyback activity at a share price well below fair value.
The share price of our more cyclical businesses, in particularly the building products companies which have exposure to the U.S. residential, repair and renovation and infrastructure sectors, were broadly flat for the quarter. Rapidly escalating mortgage rates and rapidly reducing affordability will have a pronounced negative effect on near term new residential construction activity. We believe these cyclical pressures are well understood and are more than reflected in current share prices. Overall, we strongly believe share prices are overly reflecting near-term challenges and our portfolio of companies are now meaningfully undervalued.”
11. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 93
Fisher Asset Management’s Holdings: $1,415,171,000
Percentage of Fisher Asset Management’s Portfolio: 1.06%
Adobe Inc. (NASDAQ:ADBE) is a San Jose, California-based software company known for providing creative, document, and marketing management solutions.
On December 16, J. Parker Lane at Stifel increased the price target on Adobe Inc. (NASDAQ:ADBE) from $375 to $400 and kept a Buy rating on the stock. Lane shared that the company finished FY22 on a high as it reported a “record net new Digital Media quarter.” Furthermore, the management maintained the bullish guidance outlined during the analyst day in October. The analyst thinks the investors’ focus is likely to remain on the company’s $20 billion acquisition of Figma, announced in September 2022, and its impact on the product roadmap for Adobe Inc. (NASDAQ:ADBE).
Here’s what Aristotle Capital Management, LLC, said about Adobe Inc. (NASDAQ:ADBE) in its Q3 2022 investor letter:
“Adobe Inc. (NASDAQ:ADBE), the content creation and publishing software provider, was the largest detractor for the quarter. So far in 2022, Adobe has achieved record revenues with strength in all its businesses, as the acceleration toward digital has continued to drive content creation across industries. During the quarter, however, the company’s shares declined after announcing its plans to acquire Figma, a web‐first collaborative interface design platform, for $20 billion. What at first glance may seem like a steep price, Figma’s web‐based, multi‐player platform could accelerate the delivery of Adobe’s Creative Cloud technologies on the web, increasing Adobe’s reach and total addressable market. Management expects the deal to close in 2023 and the transaction to be accretive by the end of the third year of integration. As is the case with any significant acquisition, we will take our time to understand this deal’s rationale and follow management’s ability to take Figma to “new heights.” This has been the case with previous acquisitions, including Marketo and Magento (although each at a much smaller purchase price). In general, we admire management teams that are able to recognize the evolving needs of their clients and are unafraid of “competing with themselves” by developing new offerings. We will continue to study this acquisition and better understand the desire of content creators to collaborate over the web.”
10. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
Fisher Asset Management’s Holdings: $ 1,469,685,000
Percentage of Fisher Asset Management’s Portfolio: 1.1%
NVIDIA Corporation (NASDAQ:NVDA) is a Santa Clara-California-based company founded in 1993 that invented the graphic processing unit (GPU). The company is a key player in the field of artificial intelligence (AI).
Rajvindra Gill at Needham raised the target price for NVIDIA Corporation (NASDAQ:NVDA) by 15% from $200 to $230 and maintained a Buy rating on the stock on December 19. The analyst highlighted NVIDIA Corporation (NASDAQ:NVDA) stock as his top pick for 2023 and added it to the Conviction list for the investment firm. Gill also added that the data center segment could face volatility in 2023, but NVIDIA Corporation’s (NASDAQ:NVDA) customers are shifting towards the H100 architecture.
Here’s what Baron Funds said about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2022 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a fabless semiconductor company and a leader in gaming and accelerated computing. NVIDIA is powering the growth of AI from the data center to the edge. Shares detracted due to inventory right sizing in NVIDIA’s gaming segment coupled with the broader market sell-off in growth stocks. Given NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, we believe the company can sustain its growth trajectory. See further discussion of NVIDIA in the top net purchases section below.
During the third quarter, we took advantage of its stock sell-off to add to NVIDIA Corporation, a fabless semiconductor mega cap that is a global leader in gaming cards and accelerated computing hardware and software. The sell-off was driven by a near-term inventory correction in gaming as a result of a COVID-related pull forward in demand as well as the shift in the Ethereum cryptocurrency from proof-of-work to proof-of-stake. Additionally, investors are concerned over the potential slowdown in data center revenues as a result of a weaker macroeconomic environment as well as the recently announced limitations on semiconductor shipments to China. Despite the near-term uncertainty, we believe that NVIDIA’s end-to-end AI platform and its leading market share in gaming, data centers, and autonomous machines, along with the size of these markets, would enable the company to benefit from durable growth for years to come and therefore view the stock price where we added shares as a compelling value for long-term investors. With demand for computing power doubling every one to two years, and Moore’s Law slowing down, there is more need for computing than ever. At the same time, “near free” supply growth (that was possible thanks to Moore’s Law) has slowed dramatically. NVIDIA’s accelerated architecture, with parallel computing at scale, answers that need.”
9. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 126
Fisher Asset Management’s Holdings: $1,520,711,000
Percentage of Fisher Asset Management’s Portfolio: 1.13%
PayPal Holdings, Inc. (NASDAQ:PYPL) is a San Jose, California-based operator of digital wallets and money management tools through its online payment system that operates in over 200 countries and supports 25 currencies.
Ramsey El-Assal at Barclays increased the target price for PayPal Holdings, Inc. (NASDAQ:PYPL) from $100 to $108 and reiterated an Overweight rating on December 12. Experts believe that PayPal Holdings, Inc. (NASDAQ:PYPL) could experience better top-line and bottom-line margins due to more partnerships and less investment in venture capital. The fintech companies are now expected to generate higher returns due to rising benchmark interest rates. This is expected to make the companies focus on their core competencies and not compete against their industry peers at all levels.
Here’s what Wedgewood Partners said about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2022 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) contributed positively to performance as the Company reported accelerating revenue growth and more concrete measures to drive long-term profitability. Revenue growth accelerated throughout the quarter as the Company is taking share in e-commerce while lapping the headwinds of the eBay rolling off. While eBay’s revenues represented higher-margin revenues, the Company should be able to drive better transaction margins as total payment volume growth reaccelerates. Part and parcel of this growth comes from PayPal’s investments to drive higher penetration into its 429 million active accounts. PayPal’s active accounts have grown by +50% since the onset of the pandemic so it makes sense for management to focus on driving higher transactions per account, thus better to monetize this historical windfall of users. The Company also authorized a $15 billion share repurchase program, which represents over 10% of shares outstanding. This is a good use of capital relative to the Company’s historically depressed multiples.”
8. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 115
Fisher Asset Management’s Holdings: $1,574,217,000
Percentage of Fisher Asset Management’s Portfolio: 1.18%
Netflix, Inc. (NASDAQ:NFLX) is a Los Gatos, California-based digital streaming service provider with a presence in 190 countries and a subscriber count of 223.09 million as of 2022.
Jason Helfstein at Oppenheimer gave Netflix, Inc. (NASDAQ:NFLX) stock a target price of $365, along with an Outperform rating on December 20. The analyst believes that the stock price performance of Netflix, Inc. (NASDAQ:NFLX) will be driven by the increasing number of subscribers. The subscriber count can be gauged by the viewership numbers shared by the digital streaming company from time to time. The analyst is confident that Netflix, Inc.’s (NASDAQ:NFLX) new ad-based streaming service will not miss ad revenue targets in the short term.
Here’s what Artisan Partners said about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2022 investor letter:
“Netflix, Inc. (NASDAQ:NFLX) and Vertex Pharmaceuticals were two of our top contributors. Shares of Netflix got some relief after being under pressure in the first half of 2022. Media and entertainment stocks in general have been out of favor as investors grapple with the long-term economics of streaming services and slowing subscriber growth—what should be viewed as a normal feature of a maturing market. Our view is streaming is a scale and intellectual property business that will result in a few large winners, and we believe Netflix will be among this group. We initiated our position in Netflix in Q1 after shares fell by more than half due to concerns about subscriber growth and increasing competition from streaming upstarts. The stock then suffered a second down leg in April after the company reported subscriber losses for the first time in its history. Then in July, the company reported its second consecutive quarter of subscriber losses, but the nearly 1 million subscribers lost were much lower than the 2 million that management had forecast, and shares rallied on the news. For patient investors, there is reason for optimism that subscriber growth will turn around. The company has plans to crack down on password sharing and is launching a lower cost advertising supported tier. Our investment case is focused on an undemanding valuation, massive scale, a continued shift in time and attention from linear TV to streaming, and a financial condition which gives management the flexibility to operate unconstrained during a transition period for the business. We also believe Netflix can leverage its massive global scale of 200+ million subscribers into positive free cash flow though steady pricing increases and content spending controls.”
7. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 177
Fisher Asset Management’s Holdings: $1,604,616,000
Percentage of Fisher Asset Management’s Portfolio: 1.2%
Meta Platforms, Inc. (NASDAQ:META) is a Menlo Park, California-based technology conglomerate that owns leading social media and instant messaging platforms like Facebook, Instagram, and WhatsApp.
Doug Anmuth at JPMorgan upgraded Meta Platforms, Inc. (NASDAQ:META) stock from a Neutral to an Overweight rating and increased the price target on the stock from $115 to $150 on December 16. The analyst highlighted that the stock price of Meta Platforms, Inc. (NASDAQ:META) lost 65% of its value YTD due to the amendments in the privacy policies by Apple, increased competition from TikTok, and other similar issues. However, the analyst anticipates the adverse impact of these developments to ease in the following year. Meta Platforms, Inc. (NASDAQ:META) has also shown signs of improved control over costs, which is expected to give a boost to the company’s margins.
ClearBridge Investments discussed its outlook on Meta Platforms, Inc. (NASDAQ:META) in its Q3 2022 investor letter. Here’s what the firm said:
“Meta Platforms, Inc. (NASDAQ:META), one of two overweights among the mega cap stocks, underperformed in the third quarter (-15.9%) and is the Strategy’s largest detractor year to date. Meta has also trailed mega cap advertising peer Alphabet, which we don’t own, as revenue growth has slowed due to tough comparables to a strong e-commerce environment in early 2021, negative impacts from Apple’s privacy changes and rising expenses.
While we have trimmed our position close to 20%, we remain invested as we do not think the stocks’ valuation at about 13x consensus 2023 earnings appropriately reflects its long-term earnings and free cash flow generation potential. Despite current revenue headwinds, we believe Meta is well-positioned to navigate industrywide changes to advertising targeting and its transition to the Reels short-form video format will monetize in the coming years, helping to re-accelerate revenue growth.
We also welcome Meta’s implementation of cost-cutting measures, which should help uncover the company’s high underlying profitability. Lastly, we see Meta’s investments in augmented reality as a call option for long-duration investors.”
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 87
Fisher Asset Management’s Holdings: $ 1,722,650,000
Percentage of Fisher Asset Management’s Portfolio: 1.29%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Hsinchu, Taiwan-based operator of semiconductor foundry.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is working on expanding its footprint in the European market by establishing a foundry in Dresden, Germany. The company is in the process of establishing a foundry in the US state of Arizona that will begin commercial production in 2024. The famous electric vehicle (EV) manufacturer Tesla, Inc. (NASDAQ:TSLA) has already placed an order with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which will be produced at the company’s new facility.
RiverPark Funds discussed its stance on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2022 investor letter. Here’s what the firm said:
“Taiwan Semiconductor detracted from performance despite a business performance that saw revenue accelerate to over +30% growth. The Company is one of the few fabs in the world that is capable of manufacturing leading-edge integrated circuits (IC). The Company’s leading-edge capacity is being absorbed by high-performance computing applications, particularly by Apple, which has become an integrated circuit powerhouse over the past decade.
The Company’s aggressive investment in leading-edge equipment, tight development with fabless IC designers, and embrace of open development libraries should continue to foster a superior competitive position and attractive long-term growth.”
In addition to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Ken Fisher also has a stake in Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) as of Q3 2022.
Click to continue reading and see Ken Fisher’s Top 5 Growth Stock Picks.
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Disclosure: None. Ken Fisher’s Top 15 Growth Stock Picks is originally published on Insider Monkey.
