In this article, we are going to discuss top tech stocks to buy today according to Brad Gerstner’s Altimeter Capital Management. If you want to skip our detailed analysis of Gerstner’s history, investment philosophy, and hedge fund performance, you can go directly to Top 5 Tech Stocks to Buy Today According to Brad Gerstner’s Altimeter Capital Management.
The Boston-based fund Altimeter Capital Management was established in 2008 by Brad Gerstner. He is known to follow the idea of essentialism and started Altimeter with the vision to invest both in the private and public sectors in the field of technology. When most firms were committed to either be hedge funds or capital venture firms, Gerstner started Altimeter Capital Management to be both.
A Harvard Business School graduate, Gerstner was a partner at the multi-billion dollar hedge fund, PAR Capital. The next step in his career led to the launch of Altimeter Capital Management and he now manages $13.3 billion in 13F securities, as of the second quarter of 2021.
As of the end of the second quarter of 2021, Gerstner’s portfolio has notable names like Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Shopify Inc. (NYSE:SHOP).
Brad Gerstner owns 3.7 million shares in Facebook, Inc. (NASDAQ:FB) which makes up 9.81% of his portfolio. Facebook, Inc. (NASDAQ:FB) is up about 29.44% year-to-date. The company saw an increase in hedge fund sentiment. Insider Monkey’s data shows that the number of hedge funds having stakes in the company was 266 in the second quarter of 2021, compared to 257 in the first quarter.
Another well-known name in Altimeter’s portfolio is Microsoft Corporation (NASDAQ:MSFT). Altimeter owns 1.8 million shares in the company, worth $477.6 million. Microsoft Corporation (NASDAQ:MSFT) has been doing phenomenally well as it is up by 40% over the last 12 months. The company recently increased its quarterly dividend by 10.7% to $0.62 per share.
Brad Gerstner of Altimeter Capital
Why should we pay attention to Brad Gerstner’s technology stock picks? 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 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.
With this context in mind, here is our list of the top tech stocks according to Brad Gerstner. The ranking was done according to Altimeter Capital Management’s investment portfolio as of the second quarter of 2021.
Top Tech Stocks to Buy Today According to Brad Gerstner’s Altimeter Capital Management
10. Alibaba Group Holding Limited (NYSE:BABA)
Gerstner’s Stake Value: $261.3 million
Percentage of Brad Gerstner’s 13F Portfolio: 1.96%
Number of Hedge Fund Holders: 146
Alibaba Group Holding Limited (NYSE:BABA) is a tech company known for retail, e-commerce, and technology. The company was launched in 1999 and came tenth on the list of Gerstner’s in 13F portfolio. It has a market cap of $407.124 billion.
Altimeter Capital Management owns 1.15 million shares of Alibaba Group Holding Limited (NYSE:BABA), worth $261.3 million. The fund added the company to its portfolio in the second quarter of 2017. The hedge fund sentiment towards Alibaba Group Holding Limited (NYSE:BABA) increased as 146 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in the company in the second quarter of 2021, as compared to 135 in the first quarter.
Semper Vic Partners LP talked about Alibaba Group Holding Limited (NYSE:BABA) in its second-quarter 2021 investor letter. Here is what the fund said:
“It is hard to believe that it was over eight months ago that I wrote about our new investment which we had initiated late last year, Alibaba. As I mentioned at the time, I had long admired access Alibaba provides Western investors across a host of consumer products companies to Chinese commerce and economy.
Alibaba has long provided exposure to China’s foremost commerce hubs, especially through the form of Taobao and Tmall (especially its Luxury Pavilion collections). With roughly one billion Chinese average annual consumers and roughly 260 million additional consumers outside of China, it is hard to imagine shopping in China without involvement in one manner or another with Alibaba…” (Click here to read the full text)
9. Shopify Inc. (NYSE:SHOP)
Gerstner’s Stake Value: $292.2 million
Percentage of Brad Gerstner’s 13F Portfolio: 2.19%
Number of Hedge Fund Holders: 85
Shopify Inc. (NYSE:SHOP) is a Canadian tech company that was founded in 2004.
In the second quarter of 2021, Shopify Inc. (NYSE:SHOP) reported an EPS of $2.24, beating the estimates by $1.28. The company had revenue of $1.12 billion, an increase of 56.71% YoY which beat estimates by $69.15 million.
Polen Capital is an investment management firm, and it mentioned Shopify Inc. (NYSE:SHOP) in its second-quarter investor letter. Here is what the firm said:
“Shopify, a Canadian software company, enables merchants and entrepreneurs to run their operations efficiently. We like the focus Shopify brings to merchants. Its products allow merchants to set up an online store, manage inventory, interact with customers, accept payments, and monitor the flow of goods through various distribution channels in one centralized dashboard. Though it offers missioncritical capabilities, Shopify subtly operates in the background while allowing merchants to interact with customers.
As the world increasingly sees direct-to-consumer interactions take flight, both nascent and established brands are adopting Shopify. Today, nearly two million businesses utilize Shopify to sell more than $150 billion in merchandise across the platform. We think these numbers can grow significantly from here. Further, newer product categories like lending and fulfillment (along with a litany of other future merchant pain points we think Shopify can help solve) coupled with higher attach rates for payments could drive higher monetization of a growing user base in the coming five years. We believe Shopify can grow its earnings power at a 30% rate for the coming five years.”
8. Uipath Inc. (NYSE:PATH)
Gerstner’s Stake Value: $296.8 million
Percentage of Brad Gerstner’s 13F Portfolio: 2.23%
Number of Hedge Fund Holders: 46
Uipath Inc. (NYSE:PATH) is an automation company that was launched in 2005. The company has a market capitalization of $27.402 billion.
In the second quarter of 2021, Uipath Inc. (NYSE:PATH) declared an EPS of $0.01, which beat the estimate by $0.07. The company generated revenue of $195.5 million, up 40% YoY.
On September 17, 2021, Barclays upgraded Uipath Inc. (NYSE:PATH) from Equal Weight to Overweight.
When ClearBridge Investments published its second-quarter 2021investor letter, it mentioned Uipath Inc. (NYSE:PATH). Here is what it said:
“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing, and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”
7. Zoom Video Communications, Inc. (NASDAQ:ZM)
Gerstner’s Stake Value: $348.3 million
Percentage of Brad Gerstner’s 13F Portfolio: 2.62%
Number of Hedge Fund Holders: 59
Zoom Video Communications Inc. (NASDAQ:ZM) is a communication technology company founded in 2011. The company has a market capitalization of $82.673 billion.
On August 30, 2021, Zoom Video Communications, Inc. (NASDAQ:ZM) released its second-quarter result of 2021, which declared an EPS of $1.36, compared to the EPS estimate of $1.16. The report showed a revenue of $1.02 billion, up 54% YoY, beating analysts’ expectations by $31.23 million.
Gerstner has 900,000 shares worth $348.3 million in Zoom Video Communications, Inc. (NASDAQ:ZM). The company saw an increase in hedge fund sentiment. The number of hedge funds having stakes in the company increased to 59 in the second quarter of 2021, compared to 54 in the first quarter.
Just like Facebook, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Shopify Inc. (NYSE:SHOP), Zoom Video Communications, Inc. (NASDAQ:ZM) is one of the top tech stocks to buy according to Brad Gerstner.
Zoom Video Communications, Inc. (NASDAQ:ZM) was mentioned in the first-quarter 2021 investor letter of Artisan Partners, an investment management firm. Here is what it said:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
6. Microsoft Corporation (NASDAQ:MSFT)
Gerstner’s Stake Value: $477.6 million
Percentage of Brad Gerstner’s 13F Portfolio: 3.59%
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) is a multinational technology corporation and was launched in 1975.
Altimeter has 1.8 million shares in Microsoft Corporation (NASDAQ:MSFT) worth $477.6 million. In the second quarter of 2021, the number of hedge funds having stakes in the company went down to 238, compared to 251 in the previous quarter.
For its second-quarter 2021 investor letter, Baron Opportunity Fund mentioned Microsoft Corporation (NASDAQ:MSFT). Here is what the fund said:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”
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Disclosure: None. Top Tech Stocks to Buy Today According to Brad Gerstner’s Altimeter Capital Management is originally published on Insider Monkey.
