In this article, we discuss the top 10 tech stock picks of Adam Parker’s Center Lake Capital. If you want to skip our detailed analysis of Adam Parker’s history, investment philosophy, and hedge fund performance, go directly to the Top 5 Tech Stock Picks of Adam Parker’s Center Lake Capital.
Adam Parker established Center Lake Capital in 2014 and has been the managing partner of the hedge fund since its inception. He oversees a portfolio worth $696.5 million in managed 13F securities, and assets under management valued at $646.1 million. At 35, Parker is one of the youngest hedge fund managers to hold such an impressive portfolio.
Before launching Center Lake Capital, Parker worked at PointState Capital as the managing director for four years. Starting out, he was handed securities worth $150 million to manage at PointState, which he executed brilliantly. Parker attended the University of Pennsylvania, where he received a Bachelor’s degree, specializing in Finance and Real Estate.
About 56.17% of Adam Parker’s 13F portfolio for the second quarter is concentrated on the information technology sector, with the biggest holding being Adobe Inc. (NASDAQ:ADBE), which comprises 10.94% of Parker’s 13F portfolio.
Some of the most popular tech stock picks of Adam Parker’s Center Lake Capital are Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). Hedge funds are very interested in these tech stocks as well.
Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Our Methodology
With this context in mind, here are some of the top stock picks of Adam Parker’s Center Lake Capital. We used Center Lake Capital’s 13F portfolio for the second quarter of 2021 to rank these stocks. The list was compiled according to the value of each holding in the investment portfolio.
The analyst ratings for each company are also discussed to provide readers with some more context about their investment decisions. The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Top Tech Stock Picks of Adam Parker’s Center Lake Capital
10. Cloudflare, Inc. (NYSE:NET)
Center Lake Capital’s Stake Value: $24,872,000
Percentage of Center Lake Capital’s 13F Portfolio: 3.57%
Number of Hedge Fund Holders: 43
Cloudflare, Inc. (NYSE:NET) is an American internet and cloud computing company, focused on web infrastructure and website security. Cloudflare, Inc. (NYSE:NET) allows protection of external, public-facing web properties, secures internal operations and private data, and also offers a server-less platform to customers so they can build scalable applications without deploying web infrastructure. Cloudflare, Inc. (NYSE:NET) is one of the top tech stock picks of Adam Parker’s Center Lake Capital.
Cloudflare, Inc. (NYSE:NET) is quite popular among hedge funds, with 43 funds long Cloudflare, Inc. (NYSE:NET) at the end of June. Center Lake Capital owns stakes worth $24.8 million in Cloudflare, Inc. (NYSE:NET), which represents 3.57% of Parker’s 13F portfolio.
Cowen analyst Shaul Eyal kept an Outperform rating on Cloudflare, Inc. (NYSE:NET), raising the price target from $135 to $200 on October 19. He is expecting solid results from the web security company, now that Cloudflare, Inc. (NYSE:NET) is prioritizing digital transformation, information asset protection, and compliance accelerating revenue growth.
Cloudflare, Inc. (NYSE:NET) is a top technology stock in Adam Parker’s 13F portfolio, just like Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Here is what Alger has to say about Cloudflare, Inc. in its Q2 2021 investor letter:
“Cloudflare provides a broad range of network services to businesses of all sizes across the world. Cloudflare’s intelligent global network spans more than 200 cities in over 100 countries. It offers network security, performance and reliability to a growing portion of global web traffic with over 17% of global internet requests going through Cloudflare. The company’s serverless network design allows this global network to be a key component layer as new developments for edge computing, 5G and the Internet of Things increase the importance of secure, reliable edge networks.
Cloudflare stock outperformed in the second quarter following a strong earnings report for the first three months of this year during which the company reaccelerated revenue growth. This revenue reacceleration was driven by momentum in Cloudflare’s large customer segment. Cloudflare added a record number of large customers who now account for more than half of Cloudflare’s total revenue. We think that Cloudflare is currently still in the early stages of market penetration, which means it has potential to maintain high levels of growth within its large customer segment as the company continues to innovate within its product offerings to better serve these large, complex customers. Cloudflare’s leadership in product innovation was further validated by the company’s second quarter announcement of a new partnership with NVIDIA Corporation to develop Al-based applications on Cloudflare’s edge network.”
9. Coupa Software Incorporated (NASDAQ:COUP)
Center Lake Capital’s Stake Value: $27,479,000
Percentage of Center Lake Capital’s 13F Portfolio: 3.95%
Number of Hedge Fund Holders: 54
Coupa Software Incorporated (NASDAQ:COUP) is a platform that is employed globally for Business Spend Management. Coupa Software Incorporated (NASDAQ:COUP) enables companies to manage their finances and budget properly, to control the resources spent within their organization. The company provides cloud architecture, executive dashboards, alerts, expense management, and real-time benchmarking in a single user interface. Coupa Software Incorporated (NASDAQ:COUP) is one of the top tech stocks in Adam Parker’s 13F portfolio.
Adam Parker’s Center Lake Capital owns 104,836 shares in Coupa Software Incorporated (NASDAQ:COUP), valued at $27.4 million, making up 3.95% of Parker’s 13F portfolio.
Out of the hedge funds tracked by Insider Monkey, 54 funds were bullish on Coupa Software Incorporated (NASDAQ:COUP) at the end of Q2, up from 50 in the first quarter.
UBS analyst Taylor McGinnis initiated coverage of Coupa Software Incorporated (NASDAQ:COUP) with a Neutral rating and a $230 price target on October 1. She stated that the company can sustain revenue growth of more than 30% over the medium-term, but she is not entirely convinced about the stock’s durability.
Coupa Software Incorporated (NASDAQ:COUP) is one of the top tech stocks selected by Adam Parker, just like Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Here is what ClearBridge Investments has to say about Coupa Software Incorporated (NASDAQ:COUP) in its Q2 2021 investor letter:
“Within IT, we added positions in Coupa Software, a leader in the fast growing Business Spend Management market with opportunity to double its total addressable market by harnessing B2B payments with its Coupa Pay product; and AppLovin, a leading mobile gaming advertising network in a unique position to utilize its ad expertise to grow its own mobile game business at low user acquisition costs.”
8. Everbridge, Inc. (NASDAQ:EVBG)
Center Lake Capital’s Stake Value: $31,312,000
Percentage of Center Lake Capital’s 13F Portfolio: 4.5%
Number of Hedge Fund Holders: 26
Everbridge Inc. (NASDAQ:EVBG) is the next top stock pick by Adam Parker’s Center Lake Capital. The company provides enterprise software that is meant to offer critical information during times of crisis to enable public safety and business continuity. Founded in 2002, Everbridge Inc. (NASDAQ:EVBG) has headquarters in Pasadena, California, Burlington, and Massachusetts.
Adam Parker’s Center Lake Capital owns about 230,100 shares in Everbridge Inc. (NASDAQ:EVBG), amounting to $31.3 million, and making up 4.5% of Parker’s 13F portfolio.
At the end of the second quarter of 2021, 26 hedge funds in Insider Monkey’s database held stakes amounting to $1.2 billion in Everbridge Inc. (NASDAQ:EVBG), up from 49 in the previous quarter with stakes worth over $1.08 billion.
Baron Discovery Fund mentioned Everbridge Inc. (NASDAQ:EVBG) in their Q1 2021 investor letter. Here is what the fund said:
“Everbridge, Inc. provides a cloud-based software solution to companies for critical event management (“CEM”) as well as general population alerts for public authorities. Shares declined during the first quarter as part of the broader market rotation from high-valuation software stocks coupled with continued pandemic-related pressure on Everbridge’s organic growth rates. We retain conviction given the company’s significant lead over its competition and the early stage of CEM adoption, with just 2% of Everbridge’s 5,000-plus population alert customers having adopted CEM thus far.”
7. DocuSign, Inc. (NASDAQ:DOCU)
Center Lake Capital’s Stake Value: $41,936,000
Percentage of Center Lake Capital’s 13F Portfolio: 6.02%
Number of Hedge Fund Holders: 58
DocuSign, Inc. (NASDAQ:DOCU) is a California-based business software company that enables organizations to manage electronic signatures on documents. DocuSign, Inc. (NASDAQ:DOCU) has millions of users worldwide, spread across 180 countries. DocuSign, Inc. (NASDAQ:DOCU) is traded as a NASDAQ 100 Component, and is one of the top tech stock picks by Adam Parker.
Center Lake Capital owns stakes worth $41.9 million in DocuSign, Inc. (NASDAQ:DOCU), representing 6.02% of Parker’s 13F portfolio at the end of June.
Aubrey Capital Management is the leading stakeholder in DocuSign, Inc. (NASDAQ:DOCU) as of the end of Q2, with 34,600 shares valued at $9.67 billion. Overall, 58 hedge funds were long DocuSign, Inc. (NASDAQ:DOCU) at the end of June.
Here is what Carillon Tower Advisers has to say about DocuSign, Inc. (NASDAQ:DOCU) in its Q2 2021 investor letter:
“DocuSign provides electronic signature solutions. The firm reported an excellent quarter and investors have appreciated the strong growth combined with the excellent margins the company has posted. DocuSign has a long runway of growth ahead and we believe that it remains in a favorable position to continue gaining market share from traditional manual and paper-based signature solutions.”
6. Elastic N.V. (NYSE:ESTC)
Center Lake Capital’s Stake Value: $41,957,000
Percentage of Center Lake Capital’s 13F Portfolio: 6.03%
Number of Hedge Fund Holders: 55
Elastic NV (NYSE:ESTC) is a company engaged in self-managed and SaaS solutions for search, logging, analytics, and security purposes. The Elasticsearch tech is used by leading companies including eBay Inc. (NASDAQ:EBAY), Wikipedia, Yelp Inc. (NYSE:YELP), Uber Technologies, Inc. (NYSE:UBER), Lyft, Inc. (NASDAQ:LYFT), Tinder, and Netflix, Inc. (NASDAQ: NFLX). Founded in 2012, Elastic NV (NYSE:ESTC) was first established in Amsterdam and later incorporated in California, and is one of the top tech stock picks of Adam Parker’s Center Lake Capital.
Center Lake Capital owns about 287,850 shares in Elastic NV (NYSE:ESTC), amounting to $41.95 million, and making up 6.03% of Parker’s 13F portfolio.
At the end of the second quarter of 2021, 55 hedge funds in Insider Monkey’s database held stakes amounting to $3.06 billion in Elastic NV (NYSE:ESTC), up from 52 in the previous quarter with stakes worth over $1.88 billion.
Greenhaven Road Capital, in their Q2 2021 investor letter, mentioned Elastic NV (NYSE:ESTC) and shared their insights about the company. Here is what they said:
“Our top five holdings represent more than half of our total long exposure and therefore five greatly influence overall returns. Elastic Software (ESTC) – Management continues to innovate and execute, rolling out new products and converting existing users from free to paid versions. They made adjustments to their licensing agreements, making it more difficult for Amazon to rip them off, and provided forward guidance that convinced investors that the growth train will continue to run for at least a few more years.”
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Disclosure: None. Top 10 Tech Stock Picks of Adam Parker’s Center Lake Capital is originally published on Insider Monkey.
