Top 5 Technology Stocks to Buy in 2023 According to Ray Dalio

In this article, we discuss the top 5 Technology stocks to buy in 2023 according to Ray Dalio. If you want to read our detailed analysis of Dalio’s investment philosophy and portfolio construction, go directly to the Top 10 Technology Stocks to Buy in 2023 According to Ray Dalio.

5. Block, Inc. (NYSE:SQ)

Value of Bridgewater Associates’ 13F Position: $54.74 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.29%
Number of Hedge Fund Shareholders: 70

Block, Inc. (NYSE:SQ) provides credit card payment processing solutions. Its commerce ecosystem includes software and hardware for point-of-sale operations, assisting merchants with payment and point-of-sale solutions.

Bridgewater Associates elevated its position in Block, Inc. (NYSE:SQ) by 80% in Q4 2022, holding 871,118 shares worth over $54.74 million. The stock accounts for 0.29% of the fund’s total 13F portfolio. Block, Inc. (NYSE:SQ) has featured on Bridgewater Associates’ portfolio since the first quarter of 2022.

Baird expected Block, Inc. (NYSE:SQ) to have a slow Q1 but improve later in the year. They predicted slightly higher earnings per share in Q1, but March and April results would be more important to investors. Baird was positive about CashApp’s growth but concerned about a possible decline in the Seller business. On April 13, Baird maintained an ‘Outperform’ rating and a price target of $92 for Square shares.

As of the fourth quarter of 2022, 70 hedge funds in Insider Monkey’s database held stakes in Block, Inc. (NYSE:SQ). Catherine D. Wood’s ARK Investment Management is the most notable shareholder in Block, Inc. (NYSE:SQ), with 9 million shares valued at $565.77 million.

4. Meta Platforms, Inc. (NASDAQ:META)

Value of Bridgewater Associates’ 13F Position: $64.52 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.35%
Number of Hedge Fund Shareholders: 194

Meta Platforms, Inc. (NASDAQ:META) is a social networking company that creates apps for people to connect via mobile devices, personal computers, and other devices. Its products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. Meta Platforms, Inc. (NASDAQ:META)’s primary source of revenue is advertising.

According to the 13F filings for the fourth quarter of 2022, Bridgewater Associates held 536,148 shares of Meta Platforms, Inc. (NASDAQ:META), amounting to more than $64.52 million in worth and representing 0.35% of the fund’s portfolio value.

BofA analyst Justin Post increased his price target on Meta Platforms to $250 from $230 on April 18 while maintaining a ‘Buy’ rating ahead of the company’s Q1 results. Mixed ad checks suggest Q1 spending slowdown vs. Q4, but February was better than January. Sensor Tower data showed steady daily active use trends and healthy time spent trends for Instagram. Analyst reported these findings to investors.

In the fourth quarter of 2022, 194 hedge funds had stakes worth $15.58 billion in Meta Platforms, Inc. (NASDAQ:META). In addition, Boykin Curry’s Eagle Capital Management held 9.12 million shares of Meta Platforms, Inc. (NASDAQ:META) shares, valued at $1.10 billion, making it the company’s most significant stakeholder.

In its Q4 2022 investor letter, Renaissance Investment Management stated the following about Meta Platforms, Inc. (NASDAQ:META):

“Lastly, Meta Platforms, Inc. (NASDAQ:META) declined for the quarter after reporting disappointing earnings and guidance. The company’s plan to accelerate operating expenses and capital investments despite a slowdown in the digital advertising market was not well received by investors. However, the stock pared losses in the second half of the quarter after management reversed course and announced a reduction in operating expenses for 2023 along with substantial headcount reductions.”

3. Alphabet Inc. (NASDAQ:GOOG)

Value of Bridgewater Associates’ 13F Position: $65.62 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.35%
Number of Hedge Fund Shareholders: 152

Alphabet Inc. (NASDAQ:GOOG) is a global technology company that owns Google and provides products like Google Maps, Search, YouTube, and Gmail, as well as hardware like Pixel phones and smartwatches. In addition, advertising services are offered through Google Network properties like AdSense, Google Ad Manager, and AdMob. Alphabet invests in infrastructure, data, machine learning, analytics, and AI.

On April 6, UBS analyst Lloyd Walmsley reiterated a ‘Buy’ rating on Alphabet Inc. (NASDAQ:GOOG) shares and raised the price target from $120 to $123. Walmsley expected the company to beat 1Q23 estimates, with Google Website revenues surpassing Street expectations and improved gross margins in Q1.

In the fourth quarter, Ray Dalio cut his stake in Alphabet Inc. (NASDAQ:GOOG) by 721,956 shares, reducing his total stake size by 50%. He first invested in Alphabet Inc. (NASDAQ:GOOG) in the third quarter of 2015. The stock has struggled in the past twelve months, dropping more than 19%. However, Dalio still holds 743,738 shares of the company, worth more than $65.62 million.

Hedge funds are loading up on Alphabet Inc. (NASDAQ:GOOG), as Insider Monkey’s data shows that 152 hedge funds held a stake in the company as of the end of the fourth quarter of 2022, compared to 156 funds at the end of the previous quarter. Chris Hohn’s TCI Fund Management is the leading shareholder of Alphabet Inc. (NASDAQ:GOOG) with 54.54 million shares.

Diamond Hill Capital made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2022 investor letter:

“Other bottom contributors included media and technology giant Alphabet Inc. (NASDAQ:GOOG), apparel and footwear company V.F. Corporation and utility operator Dominion Energy. We believe Alphabet’s shares underperformed on concerns of a weakening macroeconomic environment. The company also reported weaker-than-expected earnings and revenue for Q3 2022. Longer-term, we expect Alphabet’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth. As such, we used the share price weakness this quarter to add to our position.”

2. Veeva Systems Inc. (NYSE:VEEV)

Value of Bridgewater Associates’ 13F Position: $77.69 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.42%
Number of Hedge Fund Shareholders: 43

Veeva Systems Inc. (NYSE:VEEV) offers cloud-based software solutions to the healthcare industry, including customer relationship management, data management, and content management. They also provide consulting, training, and support services with 650 commercial and 860 R&D customers in FY2022. Serving various sectors, they are based in Pleasanton, California.

Truist analyst initiated coverage of Veeva Systems Inc. (NYSE:VEEV) on March 17 and downgraded it from ‘Buy’ to ‘Hold’ with a $195 price target (previously $205). Despite projecting mid-teens revenue growth and EBITDA margins of 34%-36%, Truist believed the shares were fairly valued.

In the fourth quarter, Bridgewater Associates sold 89,915 shares of Veeva Systems Inc. (NYSE:VEEV) stock, reducing its remaining stake by about 16%. At of the end of the quarter, the hedge fund still held 481,385 shares of Veeva, worth about $77.69 million.

At the end of Q4 2022, 43 hedge funds owned a stake in Veeva Systems Inc. (NYSE:VEEV), up from 42 in the preceding quarter. Greg Poole’s Echo Street Capital Management held a significant stake in Veeva Systems Inc. (NYSE:VEEV) at the end of the fourth quarter of 2022.

In its Q3 2022 investor letter, TimesSquare Capital Management made the following observation regarding Veeva Systems Inc. (NYSE:VEEV):

“Veeva Systems Inc. (NYSE:VEEV) supplies cloud solutions to the global life sciences industry. The company reported an inline fiscal second quarter but lowered fiscal year guidance. We decided to liquidate the position, which had a -17% return for the time it was held in the quarter. Veeva’s reduced outlook came from a combination of foreign currency translations, with the remaining tied to anticipated macroeconomic headwinds.”

1. Baidu, Inc. (NASDAQ:BIDU)

Value of Bridgewater Associates’ 13F Position: $80.35 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.43%
Number of Hedge Fund Shareholders: 40

Baidu, Inc. (NASDAQ:BIDU) is a Chinese multinational tech company that offers internet search services through Baidu Core and iQIYI segments. In addition, Baidu provides various mobile apps, including Baidu App, Baidu Search, Baidu Feed, Baidu Health, Haokan, and more. Baidu, Inc. (NASDAQ:BIDU) also offers online marketing, cloud services, self-driving services, and iQIYI online entertainment. Baidu has a strategic partnership with Zhejiang Geely Holding Group.

Bridgewater Associates holds 702,473 shares in Baidu, Inc. (NASDAQ:BIDU), worth over $80.35 million. This represents 0.43% of their portfolio. The hedge fund’s stake in Baidu, Inc. (NASDAQ:BIDU) stock decreased by 24% in the fourth quarter of 2022. Baidu, Inc. (NASDAQ:BIDU) has featured on Bridgewater Associates’ portfolio since the second quarter of 2018.

On April 17, Citi’s Alicia Yap lowered Baidu, Inc. (NASDAQ:BIDU)’s price target to $186 but maintained a ‘Buy’ rating. She expected Q1 results to meet expectations but lowered Q2 and fiscal 2023 assumptions due to slower macro improvements affecting advertising spend and cloud projects rollout.

At the end of the fourth quarter of 2022, 40 hedge funds in the database of Insider Monkey held stakes worth $1.74 billion in Baidu, Inc. (NASDAQ:BIDU), down from 43 the preceding quarter worth $1.46 billion. Ariel Investments is the company’s largest shareholder, with shares worth $326.31 million.

Horos Asset Management stated in its Q4 2022 investor letter about Baidu, Inc. (NASDAQ:BIDU):

“As I mentioned at the beginning of this quarterly letter, we took advantage of the meltdown in technology platforms to initiate new positions in companies in which we had already been shareholders in the past and whose valuation did not, until now, provide a sufficiently high margin of safety. Such is the case of PayPal and Baidu, Inc. (NASDAQ:BIDU).…” (Click here to read the full text)

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