In this article, we are going to discuss the 10 best tech stocks to buy now according to billionaire Steve Cohen. If you wish to skip our detailed analysis of Cohen’s hedge fund history and investment strategy, go directly to 5 Best Tech Stocks To Buy Now According To Billionaire Steve Cohen.
Founded by Steven A. Cohen, Point72 Asset Management is a global asset management company that makes investments across a range of asset classes and investment strategies. Point72 primarily makes significant quantitative and macro investments and discretionary long/short equity bets. The company has a main office in Stamford, Connecticut, and has linked offices in New York, London, Hong Kong, Tokyo, and Singapore. Top-down analysis is employed by Point72 Asset Management to carry out the capital allocation process and design policies and strategies. Additionally, the firm conducts multiple studies of the market condition in order to control the amount of risk in both individual portfolios and the firm as a whole. Point72 Asset Management has consistently produced great results for its stockholders, concluding 2021 with a 9.2% gain. In 2020, Cohen’s hedge fund added 16% to its value, maintaining its sound financial position.
Point72 Investors’ Portfolio
Point72 has 19 clients and $138.459 billion in discretionary assets under management according to Form ADV from 2022-08-03. Their most recent 13F filing showed managed 13F securities worth $23.7 billion, with the healthcare sector accounting for around 21.93% of the portfolio. The fund has a top 10 holdings concentration of 10.92%. During the second quarter of 2022, Point72 Asset Management executed a portfolio rebalance, with the investment hedge fund selling out 374 positions, reducing 292 investments and adding 614 new assets, and boosting exposure to 356 existing investments.
Our Methodology
We selected the top 10 tech holdings for Steve Cohen’s Point72 Asset Management for the second quarter of 2022. We’ve provided hedge fund sentiment using Insider Monkey’s database of almost 900 hedge funds to assist our readers in gauging each stock’s appeal to professional hedge funds.
10. Microsoft Corporation (NASDAQ:MSFT)
Point72 Asset Management’s Stake Value: $99.152 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.41%
Number of Hedge Fund Holders: 258
Hedge funds have been bullish on Microsoft Corporation (NASDAQ:MSFT) stock for the past few quarters, with 258 hedge funds holding a stake in MSFT as compared to 259 in the previous quarter. Fisher Asset Management is leading the table for Q2, holding 28.694 million MSFT shares worth roughly $7.36 billion. Microsoft 365 is the backbone of American businesses, ensuring the successful performance of crucial daily tasks and making Microsoft one of the most essential companies on earth. Google, which is Microsoft’s main rival in the market for productivity software, has a share of only around 10% as opposed to Microsoft Corporation (NASDAQ:MSFT)’s 90% share.
Microsoft’s CFO Amy Hood just recently sold 75,351 shares of common stock on September 2 for a total transaction value of $19.55 million, according to a regulatory filing. The stock, however, has not witnessed much movement and has lost only 3.07% since the news broke.
09. Bill.com Holdings, Inc. (NYSE:BILL)
Point72 Asset Management’s Stake Value: $138.947 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 46
Bill.com Holdings, Inc. (NYSE:BILL) has lost almost 50% of its value in the past year and is struggling to report positive free cash flows. Hedge funds are losing interest in the stock as the number of hedge funds holding BILL shares has fallen in the past four quarters, from 66 in Q3, 2021 to 46 in Q2 of 2022.
On August 19, Bill.com Holdings, Inc. (NYSE:BILL) price target was raised by Wells Fargo analyst Jeff Cantwell from $200 to $230 while maintaining an Overweight rating for the stock. The analyst informs investors in a research note that the company’s Q4 results are demonstrating great operating momentum and exceeding investor expectations. Bill.com’s FY23 revenue projection, which indicates expected growth of 49% to 52%, was above the buy-side’s expectation, according to Cantwell.
08. Amazon.com, Inc. (NASDAQ:AMZN)
Point72 Asset Management’s Stake Value: $139.432 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.58%
Number of Hedge Fund Holders: 252
During Q2, Steve Cohen’s Point72 upped its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 1401%, holding 1.312 million shares valued at $139.432 million. Amazon shares are down by roughly 47% from their highs last year and are back down to levels previously achieved in 2018. However, AMZN still has strong growth potential. It has five amazing businesses under one roof: AWS, Marketplace, Prime, Advertising, and Logistics. Given its focus on relentless innovation, and the tiny seeds it has recently planted, more dreamy businesses may soon follow.
Here is what Baron Funds specifically said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from an overcapacity of resources coming out of COVID. We expect Amazon to grow into its retail capacity in the quarters to come, which would enable it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth.
According to the U.S. Census Bureau, domestic e-commerce was only 14.3% of retail as of the first quarter of 2022. Internationally, the opportunity is even earlier as Amazon has still less than 2% market share of international retail spending. Its advertising share is roughly 3% and growing, underpinned by its structural closed loop, which enables accurate targeting and measurement.
Lastly, Amazon Web Services or AWS, remains the leading cloud provider, while cloud computing still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”
07. Aptiv PLC (NYSE:APTV)
Point72 Asset Management’s Stake Value: $143.953 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.6%
Number of Hedge Fund Holders: 43
Founded in 1994 and situated in Dublin, Ireland, Aptiv PLC (NYSE:APTV) is an automotive technology supplier with a $27.5 billion market capitalization. Aptiv PLC (NYSE:APTV) had a -45.82% return since the beginning of the year, while its 12-month returns are down by 40.28%. The stock closed at $88.82 per share on September 06, 2022. A total of 43 hedge funds are holding a stake in APTV during Q2 as compared to 48 in the previous quarter. Point72 upped its stake in APTV by 210% during Q2 as compared to the previous quarter.
In its Q1 2022 investor letter, ClearBridge Investments mentioned Aptiv PLC (NYSE:APTV) and explained its insights for the company. Here is what the fund said:
“The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv (NYSE:APTV), which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.”
06. Uber Technologies, Inc. (NYSE:UBER)
Point72 Asset Management’s Stake Value: $149.026 million
Percentage of Point72 Asset Management’s 13F Portfolio: 0.62%
Number of Hedge Fund Holders: 129
The ride-hailing business Uber Technologies, Inc. (NYSE:UBER) is based in San Francisco, California, and it also offers food and other delivery services. By 2040, the business wants to run an emission-free, all-electric platform. Point72 Asset Management, led by Steve Cohen, started holding 2.5 million shares of Uber Technologies, Inc. (NYSE:UBER) back in Q2 2019. As of Q2 2022, the hedge fund’s stake in the firm had grown to 7.2 million shares.
Since announcing strong earnings for Q2, Uber Technologies, Inc. (NYSE:UBER) stock has rallied this summer. On August 23, with a $37 price target, Wolfe Research analyst Deepak Mathivanan maintained an Outperform rating on Uber. Given its “significant runway” for profitability and free cash flow growth in the second half of the year and 2023, Uber Technologies, according to the analyst, is still one of the best mobility ideas for the second half of 2022. He still believes that Uber shares “offer an odd opportunity for investors searching for asymmetric themes (margin increase, cost savings, etc.) beyond macro sensitivity.” According to Mathivanan, the shares are currently priced at a “compelling valuation” for a potential 20% increase in sales and an expansion of the profit margin over the following three to five years.
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Disclosure: None. 10 Best Tech Stocks to Buy Now According to Billionaire Steve Cohen is originally published on Insider Monkey.
