In this article, we discuss the top 5 stock picks of Chase Coleman’s Tiger Global Management. If you want our detailed analysis of these stocks, go directly to Top 10 Stock Picks of Chase Coleman’s Tiger Global Management.
5. Snowflake Inc. (NYSE:SNOW)
Tiger Global Management’s Stake Value: $2,039,502,000
Percentage of Tiger Global Management’s 13F Portfolio: 4.43%
Number of Hedge Fund Holders: 84
Snowflake Inc. (NYSE:SNOW) is based in Montana, operating as a cloud-based data warehousing company. Tiger Global Management elevated its position in Snowflake Inc. (NYSE:SNOW) by 17% in Q4 2021, holding more than 6 million shares worth over $2 billion. The stock accounts for 4.43% of the fund’s total 13F portfolio.
On February 15, Mizuho analyst Gregg Moskowitz lowered the price target on Snowflake Inc. (NYSE:SNOW) to $410 from $450 and kept a Buy rating on the shares. The analyst’s checks indicate that overall software demand has remained strong, with digital transformation and security projects “leading the way.” The reduced price target reflects the rising rate environment that has occurred over the past couple of months.
In the fourth quarter of 2021, 84 hedge funds held long positions in Snowflake Inc. (NYSE:SNOW), up from 73 funds in the preceding quarter. Brad Gerstner’s Altimeter Capital Management, the biggest Snowflake Inc. (NYSE:SNOW) stakeholder, owned more than 17 million shares of the company, worth $5.75 billion.
Here is what RiverPark Large Growth Fund has to say about Snowflake Inc. (NYSE:SNOW) in its Q3 2021 investor letter:
“Following torrid second quarter results, Snowflake, a position we initiated in March, was also a top contributor for 3Q. The company reported 103% year-over-year product revenue growth, 169% net revenue retention and a 74% non-GAAP gross margin, up 700 basis points year over year. Management also raised guidance to 92% product revenue growth for the full year.
Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a service.” The data warehousing market—created by the massive, growing amount of user, customer and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. Incremental warehouse data capacity and renewals are expected to be stored off-premises on cloud servers, with more than 75% of databases projected to move to the cloud by 2022, resulting in a nearly $100 billion market.
Snowflake provides complex data management and analytical tools for its customers, eliminates the need for users to manage infrastructure, is fully scalable for each customer, and can be run on any of the Amazon, Microsoft, or Google cloud platforms. The company also has a unique, customer-aligned billing model based on usage. With the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings, ServiceNow.”
4. Nu Holdings Ltd. (NYSE:NU)
Tiger Global Management’s Stake Value: $2,494,908,000
Percentage of Tiger Global Management’s 13F Portfolio: 5.43%
Number of Hedge Fund Holders: 28
Nu Holdings Ltd. (NYSE:NU) is an early stage technology company, providing a digital banking platform. Nu Holdings Ltd. (NYSE:NU) is a new arrival in Tiger Global Management’s fourth quarter portfolio, with the hedge fund buying almost 266 million shares of the company, valued at $2.4 billion. After Berkshire Hathaway and Tiger Global Management opened positions in Nu Holdings Ltd. (NYSE:NU) in Q4 2021, the stock jumped 17%.
On February 16, Bradesco BBI analyst Gustavo Schroden initiated coverage of Nu Holdings Ltd. (NYSE:NU) with an Underperform rating and a $5 price target. Despite Nu Holdings Ltd. (NYSE:NU)’s “merits, its current valuation leaves no room for error,” the analyst told investors in a research note. He also added that Nu Holdings Ltd. (NYSE:NU) will face short-term headwinds from Brazil’s “weak” economic conditions and challenges to monetize its sizable client base in the long-term.
In Q4 2021, 28 hedge funds were bullish on Nu Holdings Ltd. (NYSE:NU), with collective stakes amounting to $4.6 billion. Berkshire Hathaway held a significant position in Nu Holdings Ltd. (NYSE:NU), with over 107 million shares worth more than $1 billion.
3. Sea Limited (NYSE:SE)
Tiger Global Management’s Stake Value: $2,548,088,000
Percentage of Tiger Global Management’s 13F Portfolio: 5.54%
Number of Hedge Fund Holders: 108
Sea Limited (NYSE:SE) is a technology firm operating as a digital entertainment, e-commerce, and financial services provider. Increasing its stake in Sea Limited (NYSE:SE) by 10% in Q4 2021, Tiger Global Management held 11.3 million shares of the company, worth $2.5 billion.
Barclays analyst Jiong Shao lowered the price target on Sea Limited (NYSE:SE) on February 7 to $218 from $427 and kept an Overweight rating on the shares. The analyst believes Sea Limited (NYSE:SE)’s 2022 outlook may need to be reset, given how the post-COVID economic reopening is having a negative impact on the company’s gaming and e-commerce business as consumers spend less time online.
According to Insider Monkey’s Q4 database, ARK Investment Management held 654,834 shares of Sea Limited (NYSE:SE), worth $146.4 million. The Sea Limited (NYSE:SE) stock rebounded 15% as Cathie Wood purchased shares. Overall, 108 hedge funds were bullish on Sea Limited (NYSE:SE) in the fourth quarter of 2021.
Here is what ClearBridge Large Cap Growth Strategy has to say about Sea Limited (NYSE:SE) in its Q3 2021 investor letter:
“Over the last year, we have sought to improve the up capture of the portfolio by expanding exposure to the select bucket of companies growing revenues and earnings at meaningfully above-average rates and targeting large total addressable markets. Newer names in the select bucket like Sea Limited have been strong contributors to relative performance over this period. We believe that owning a broader group of IT and Internet companies with different drivers to the businesses helps manage some of the risk in this relatively more expensive subsector.”
2. Microsoft Corporation (NASDAQ:MSFT)
Tiger Global Management’s Stake Value: $2,852,745,000
Percentage of Tiger Global Management’s 13F Portfolio: 6.21%
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) has consistently featured on Tiger Global Management’s 13F portfolio since Q4 2016. In the fourth quarter of 2021, the hedge fund held 8.4 million shares of the company, worth $2.85 billion, representing 6.21% of the total 13F securities. Microsoft Corporation (NASDAQ:MSFT) is one of the largest American multinational technology companies.
On January 25, Microsoft Corporation (NASDAQ:MSFT) reported its earnings for the quarter ending December 2021. The company posted an EPS of $2.48, topping estimates by $0.16. Revenue over the period jumped 20.09% year-on-year to $51.73 billion, outperforming estimates by $938.45 million.
Morgan Stanley analyst Keith Weiss has extended his Microsoft Corporation (NASDAQ:MSFT) forecast to five years to highlight what he sees as a “durable EPS growth story”. He maintained an Overweight rating and a $372 price target on Microsoft Corporation (NASDAQ:MSFT) shares on February 8.
Elite hedge funds are increasingly bullish on Microsoft Corporation (NASDAQ:MSFT). In Q4 2021, 262 hedge funds held long positions in Microsoft Corporation (NASDAQ:MSFT), up from 250 funds in the quarter earlier. Fisher Asset Management owned a significant position in the company, with 26.8 million shares worth more than $9 billion.
Here is what Alger Spectra Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Class A shares of the Alger Spectra Fund underperformed the Russell 3000 Growth Index during the fourth quarter of 2021. Microsoft Corp. was among the top contributors to performance. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s CEO believes technology spending as a percent of GDP is likely to jump from about 5% today to 10% in a few years and that Microsoft will continue to take market share Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Microsoft Corporation (NASDAQ:MSFT) reported that Azure grew 50% in the past quarter. This high unit volume growth is a primary driver of the company’s higher share price, but strong operating execution has enabled margin expansion that has also helped to increase forward earnings estimates. We believe Microsoft’s subscription-based software offerings and cloud computing services have a durable growth profile because they enhance customers’ growth initiatives and help them to diminish costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
1. JD.com, Inc. (NASDAQ:JD)
Tiger Global Management’s Stake Value: $3,764,803,000
Percentage of Tiger Global Management’s 13F Portfolio: 8.19%
Number of Hedge Fund Holders: 67
JD.com, Inc. (NASDAQ:JD) is a Chinese e-commerce company that is the largest holding in Chase Coleman’s Q4 portfolio. JD.com, Inc. (NASDAQ:JD) has featured on Tiger Global Management’s 13F portfolio since Q4 2014, and in the fourth quarter of 2021, the hedge fund owned 53.7 million shares of the company, worth $3.76 billion. The stock accounts for 8.19% of the fund’s total securities.
Stifel analyst Scott Devitt lowered the price target on JD.com, Inc. (NASDAQ:JD) on January 26 to $95 from $110 and kept a Buy rating on the shares. He has lowered his calendar Q4 total revenue growth forecast to 21.6% from 26.2% year-over-year previously and said he does not expect significant growth acceleration in the first quarter of 2022 as macroeconomic uncertainty remains.
In Q4 2021, 67 hedge funds were bullish on JD.com, Inc. (NASDAQ:JD), with combined stakes amounting to $8.75 billion. Daniel Sundheim’s D1 Capital Partners owned a prominent stake in JD.com, Inc. (NASDAQ:JD), with 12.6 million shares worth $888.6 million.
Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:
“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
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