In this article, we will take a look at the 10 tech stocks to buy according to billionaire Philippe Laffont.
Billionaire investor and hedge fund manager Philippe Laffont is the founder and chief executive officer of the New York-based investment management firm, Coatue Management. After graduating in 1991 from Massachusetts Institute of Technology with a degree in Computer Science, Philippe Laffont served as an analyst at McKinsey & Company till 1994. Later, Laffont joined Tiger Management, an investment management fund, under the tutelage of the legendary Julian Robertson, where he worked as a research analyst. In 1999, Philippe Laffont founded Coatue Management, his own hedge fund.
Some of the top stocks present in the investment portfolio of Coatue Management by the end of the second quarter of 2021 include DoorDash, Inc. (NYSE:DASH), Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB) and Shopify, Inc. (NYSE:SHOP), among others discussed in detail below.
Philippe Laffont of Coatue Management
Our Methodology
With this background in mind, let us now look towards the 10 tech stocks to buy according to billionaire Philippe Laffont. We made use of Coatue Management’s 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Philippe Laffont’s 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 SPY. Our stock picks outperformed the market by 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.
10 Tech Stocks To Buy According to Billionaire Philippe Laffont
10. Uber Technologies, Inc. (NYSE:UBER)
Coatue Management’s Stake Value: $669 million
Percentage of Coatue Management’s 13F Portfolio: 2.62%
Number of Hedge Fund Holders: 135
Uber Technologies, Inc. (NYSE:UBER), more commonly referred to as simply Uber, is a technology company that provides transportation, food delivery, package delivery and courier services. The company has a market capitalization of $88.70 billion, and is ranked tenth on the list of the 10 tech stocks to buy according to billionaire Philippe Laffont.
Philippe Laffont currently holds over 13.34 million shares of Uber Technologies, Inc. (NYSE:UBER), worth over $669 million, and representing 2.62% of his hedge fund’s total investment portfolio. By the end of the second quarter of 2021, 135 hedge funds out of the 873 tracked by Insider Monkey held stakes in Uber Technologies, Inc. (NYSE:UBER), worth $10.4 billion, up from 130 hedge funds in the preceding quarter that had a total stake value of approximately $1.05 billion.
Just like DoorDash, Inc. (NYSE:DASH), Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB) and Shopify, Inc. (NYSE:SHOP), Uber Technologies, Inc. (NYSE:UBER) is a notable stock in Philippe Laffont’s portfolio.
In its Q2 2021 investor letter, ClearBridge Investments mentioned Uber Technologies, Inc. (NYSE:UBER). Here is what the fund said:
“The pandemic has also brought attention to the question of gig worker employment status for companies, including ClearBridge holdings Uber and Lyft. In the U.K., Uber proactively classified its drivers as “workers” ahead of final rulings from the British court system. The worker status in the U.K. is a designation between self-employed and employed status that entitles drivers to minimum wage, holiday pay and in some cases a pension.
ClearBridge has engaged with Uber on labor issues since its IPO, and we have given feedback over that time to the CEO, CFO, Chief Legal Officer and Investor Relations on labor relations as well as strategy and communications. Uber’s agreement on this designation is ahead of other competitors in the market and the legal mandate represents a step forward in the company’s thinking about labor. The agreement represents a short-term hit to earnings, yet in some ways it places Uber ahead of the market in its ability to balance labor and shareholder interests. Workers benefit from improved conditions, with new contributions amounting to roughly 3% of a driver’s earnings, while Uber establishes more certainty on costs and visibility into its regulatory environment and operation conditions in the future.”
9. Sea Limited (NYSE:SE)
Coatue Management’s Stake Value: $711.4 million
Percentage of Coatue Management’s 13F Portfolio: 2.78%
Number of Hedge Fund Holders: 104
Sea Limited (NYSE:SE) is a leading global consumer tech company based in Singapore that operates in the digital entertainment, e-commerce, and financial services industries. Ranked ninth on the list of the 10 tech stocks to buy according to billionaire Philippe Laffont, Sea Limited (NYSE:SE) has a market capitalization of $197.17 billion.
On October 15, Citi analyst Alicia Yap raised the price target on Sea Limited (NYSE:SE) to $424 from $335, and kept a Buy rating on the shares of the company.
According to the last 13F Filings, Coatue Management holds over 1.8 million shares of Sea Limited (NYSE:SE), amounting to more than $711.4 million in worth, and representing 2.78% of the fund’s portfolio value. At the end of the second quarter of 2021, 104 hedge funds in the database of Insider Monkey held stakes worth $12.2 billion in Sea Limited (NYSE:SE), up from 98 the preceding quarter worth $10.4 billion.
Much like DoorDash, Inc. (NYSE:DASH), Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB) and Shopify, Inc. (NYSE:SHOP), Sea Limited (NYSE:SE) is a notable stock in Coatue Management’s investment portfolio.
Tao Value mentioned Sea Limited (NYSE:SE) in its Q2 2021 investor letter. Here is what the firm has to say:
“Sea continued to execute above expectation. The gaming business continued strong momentum, recording bookings of $1.1 billion, growing 117% y-o-y. The major franchise Free Fire showed no sign of slowing down in established ASEAN & LatAm market and received positive reception from new markets like US. On e-commerce side, Shopee demonstrated early success in expanding to Brazil, by adopting a low-price category & gamification strategy. For 2021, Shopee is now top downloaded e-commerce app in Brazil, almost 2x of the second-place local leader Mercado Libre (MELI). I also see the most promising development is in its FinTech business – SeaMoney, which more than doubled its revenue in Q1 2021 from the previous quarter! With online lending products rolling out, SeaMoney is poised to grow rapidly, becoming the 3rd growth curve for Sea.”
8. Twilio Inc. (NYSE:TWLO)
Coatue Management’s Stake Value: $713.8 million
Percentage of Coatue Management’s 13F Portfolio: 2.79%
Number of Hedge Fund Holders: 98
Twilio Inc. (NYSE:TWLO), incorporated in 2008, is a California-based cloud communications platform as a service company that allows software developers to make communications functions. The company ranks eighth on our list of the 10 tech stocks to buy according to billionaire Philippe Laffont.
Philippe Laffont currently holds 858,827 shares in Twilio Inc. (NYSE:TWLO) worth over $338.5 million, representing 9.24% of his fund’s portfolio. As of the second quarter of 2021, 98 hedge funds in Insider Monkey’s database of 873 funds held stakes in Twilio Inc. (NYSE:TWLO) compared to 99 funds in the first quarter.
On September 30, Piper Sandler analyst Brent Bracelin reiterated an Overweight rating on Twilio Inc. (NYSE:TWLO) with a $550 price target, noting that the risk/reward for the company has turned compelling.
Lakehouse Capital, in its second-quarter 2021 investor letter, mentioned Twilio Inc. (NYSE:TWLO). Here is what the fund said:
“The Fund held 20 positions as of the end of June and exited four during the year (including) Twilio. The companies we exited were sold almost entirely on the basis of their valuations getting stretched well past their norms and to levels where the return profile no longer offered the asymmetric upside that led us to invest in the first place. We dislike selling on valuation as great growth companies are hard to find and letting winners run is an important facet of a winning growth strategy, however, we’re not gluttons for punishment either and in each of those cases we redeployed capital towards other high-quality growth companies with less demanding valuations.”
7. Nuance Communications, Inc. (NASDAQ:NUAN)
Coatue Management’s Stake Value: $732.3 million
Percentage of Coatue Management’s 13F Portfolio: 2.86%
Number of Hedge Fund Holders: 72
Nuance Communications, Inc. (NASDAQ:NUAN) is a global software technology company that sells voice recognition and artificial intelligence technologies. The Massachusetts-based company ranks seventh on our list of the 10 tech stocks to buy according to billionaire Philippe Laffont.
For the second quarter of 2021, Coatue Management held over 13.4 million shares of Nuance Communications, Inc. (NASDAQ:NUAN). These shares amounted to $732.3 million in total worth and represented 2.86% of the investment fund’s portfolio. Overall, 72 funds were bullish on Nuance Communications, Inc. (NASDAQ:NUAN) by the end of the June quarter, with stakes worth over $5.57 billion.
For the fiscal third quarter of 2021, Nuance Communications, Inc. (NASDAQ:NUAN) reported an EPS of $0.16, falling short of the estimates by $0.01.
Besides DoorDash, Inc. (NYSE:DASH), Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB) and Shopify, Inc. (NYSE:SHOP), Nuance Communications, Inc. (NASDAQ:NUAN) is one of the top stocks in Philippe Laffont’s 13F portfolio.
6. UiPath Inc. (NYSE:PATH)
Coatue Management’s Stake Value: $769.8 million
Percentage of Coatue Management’s 13F Portfolio: 3.01%
Number of Hedge Fund Holders: 46
Global software and robotics company UiPath Inc. (NYSE:PATH) comes in at sixth on the list of the 10 tech stocks to buy according to billionaire Philippe Laffont. The New York-based company creates software to provide business and cognitive processes in finance, operations, customer service, and other industries.
Based on Philippe Laffont’s SEC 13F filings, his hedge fund owns 11.3 million shares of UiPath Inc. (NYSE:PATH) worth $769.8 million as of the end of the second quarter. This represents 3.01% of the total holdings of Coatue Management.
On September 17, Barclays analyst Raimo Lenschow upgraded UiPath Inc. (NYSE:PATH) to Overweight from Equal-Weight and increased his price target for the stock to $71 from $70.
In the Q2 2021 investor letter of ClearBridge Investments, the fund mentioned UiPath Inc. (NYSE:PATH), and discussed its stance on the firm. Here is what the fund 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.”
5. Facebook, Inc. (NASDAQ:FB)
Coatue Management’s Stake Value: $994 million
Percentage of Coatue Management’s 13F Portfolio: 3.89%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is a multinational social networking services company based in Menlo Park, California. The tech titan has a market capitalization of $945.47 billion and is ranked fifth on the list of the 10 tech stocks to buy according to billionaire Philippe Laffont.
Philippe Laffont’s Coatue Management currently holds over 2.85 million shares of Facebook, Inc. (NASDAQ:FB). These shares amount to $994 million and accounts for 3.89% of the fund’s portfolio value. At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ:FB), compared to 257 in the previous quarter’s worth $40 billion.
According to its earnings report for the second quarter of 2021, Facebook, Inc. (NASDAQ:FB) had an EPS of $3.61, beating the estimated EPS by $0.58. Facebook, Inc. (NASDAQ:FB) also reported revenues amounting to $29.08 billion, surpassing market predictions by $1.19 billion.
On September 30, RBC Capital analyst Brad Erickson initiated coverage of Facebook, Inc. (NASDAQ:FB) with an Outperform rating alongside a $425 price target on the company’s shares.
4. Snowflake, Inc. (NYSE:SNOW)
Coatue Management’s Stake Value: $1.05 billion
Percentage of Coatue Management’s 13F Portfolio: 4.14%
Number of Hedge Fund Holders: 70
Snowflake Inc. (NYSE:SNOW) is a cloud-based data storage and analytics services company headquartered in Montana. The company has a market capitalization of $101.67 billion, and is ranked fourth on our list of the 10 tech stocks to buy according to billionaire Philippe Laffont.
At the end of the second quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth $12.5 billion in Snowflake Inc. (NYSE:SNOW). This is compared to 71 hedge funds in the preceding quarter with stake worth $12.96 billion. According to the last 13F Filings, Philippe Laffont owns over 4.37 million shares of Snowflake, Inc. (NYSE:SNOW), worth more than 1.05 billion, representing 4.14% of his investment firms investment portfolio.
On September 30, BTIG analyst Gray Powell upgraded Snowflake Inc. (NYSE:SNOW) to a Buy rating from Neutral, with a $353 price target.
RiverPark Large Growth Fund, in their Q1 2021 investor letter, mentioned their new position in Snowflake Inc. (NYSE:SNOW). Here is what the fund said:
“We also established a position in Snowflake during the quarter. 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. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and 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.”
3. PayPal Holdings Inc. (NASDAQ:PYPL)
Coatue Management’s Stake Value: $1.08 billion
Percentage of Coatue Management’s 13F Portfolio: 4.25%
Number of Hedge Fund Holders:
Multinational financial services company PayPal Holdings Inc. (NASDAQ:PYPL) ranks third on our list of the 10 tech stocks to buy according to billionaire Philippe Laffont. The company engages in the provision of online payment systems in a number of countries across the globe. The PYPL stock’s revenue is expected to grow by 20% annually in the next 5 years.
Philippe Laffont’s Coatue Management currently holds over 3.7 million shares of PayPal Holdings Inc. (NASDAQ:PYPL). These shares amount to more than $1.08 billion and account for 4.25% of the fund’s investment portfolio. At the end of the second quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $16.3 billion in PayPal Holdings, Inc. (NASDAQ:PYPL). The number of hedge funds with stakes in the company remained unchanged for the first and second quarter.
On September 9, DA Davidson analyst Christopher Brendler maintained his Buy rating on PayPal Holdings Inc. (NASDAQ:PYPL), alongside a $325 price target on the company’s shares.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Coatue Management’s Stake Value: $1.49 billion
Percentage of Coatue Management’s 13F Portfolio: 5.85%
Number of Hedge Fund Holders: 271
There were 271 hedge funds in the database of Insider Monkey that held stakes in Amazon.com, Inc. (NASDAQ:AMZN) worth $60.49 billion in the second quarter of 2021, compared to 243 funds in the first quarter with total stakes amounting to approximately $50.4 billion. Coatue Management, by the end of the second quarter, held 434,399 shares of Amazon.com, Inc. (NASDAQ:AMZN) worth more than $1.49 billion and representing 5.85% of Laffont’s 13F portfolio value.
On September 30, RBC Capital analyst Brad Erickson initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with an Outperform rating and $4,150 price target.
In the Q2 2021 investor letter of L1 Capital, the fund announced Amazon.com, Inc. (NASDAQ:AMZN) as one of its leading contributors. Here is what the fund said:
“Amazon flipped from being the largest detractor from portfolio performance in the March 2021 quarter, to one of the leading contributors in the June 2021 quarter. We took advantage of negative near-term sentiment in the March 2021 quarter to add to our Amazon investment. We continue to view Amazon as one of the best positioned businesses globally, with its share price still not reflecting fair value.”
1. DoorDash, Inc. (NYSE:DASH)
Coatue Management’s Stake Value: $1.7 billion
Percentage of Coatue Management’s 13F Portfolio: 6.74%
Number of Hedge Fund Holders: 45
DoorDash, Inc. (NYSE:DASH) is an online food ordering and food delivery company based in San Francisco, U.S, and is considered the largest food delivery company in the United States. Ranked first on the list of the 10 tech stocks to buy according to billionaire Phillipe Laffont, DoorDash, Inc. (NYSE:DASH) has a market capitalization of $72.78 billion.
Philippe Laffont’s Coatue Management currently owns 9.65 million shares in DoorDash, Inc. (NYSE:DASH), amounting to $1.7 billion in worth and accounting for 6.47% of the fund’s portfolio. In Q2 2021, 45 hedge funds held stakes in DoorDash, Inc. (NYSE:DASH), compared with 38 in the previous quarter.
On October 13, BofA analyst Michael McGovern maintained his Buy rating on DoorDash, Inc. (NYSE:DASH), alongside a $255 price target on the company’s shares.
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Disclosure. None. 10 Tech Stocks to Buy According to Billionaire Philippe Laffont is originally published on Insider Monkey.
