In this article, we discuss the 10 best tech stocks to buy according to billionaire Ken Griffin.
Ken Griffin was always destined to become a man with a lot of money on Wall Street. Now worth around $25 billion according to Forbes, Griffin was trading stocks and making money as a teenager studying at Harvard University, and even convinced the college administration to let him install a satellite dish on his dormitory’s roof so he could receive real-time stock quotes. After working with Glenwood Capital Investment’s Frank Meyer for a year after his graduation, Ken Griffin set up a $4.6 million hedge fund named Citadel Investment Group in 1990, which posted returns of 43% and 40% in the next two years. Come 2022, Griffin’s hedge fund manages more than $484 billion as of the end of March, and is one of the most widely-watched funds on Wall Street. In the pandemic-ravaged year of 2020, Citadel posted returns of 24% and earned more than $1.8 billion, making it the 4th highest earner of the year. Ken Griffin also founded Citadel Markets in 2002, which is the largest market maker on the New York Stock Exchange, and one of the largest in the world. It manages and processes one out of every five stock trades in the United States.
Inflation: A Rollback Of Globalization and Shortage Of Workers
Talking to Bloomberg in May, Griffin noted that every economic cycle ends with a recession, and the inevitable coming of one was not a question of “if” but “when.” To that end, the Citadel boss noted that he doesn’t see recession as likely during the next four quarters. Griffin pointed out that China’s zero-tolerance policy towards Covid-19 has drastic impacts on supply chain, and is very “pro-inflationary.” This creates further impetus for the Fed to introduce more aggressive policy decisions which could lead to a recession.
Ken Griffin of Citadel Investment Group
He talked about how the war in Ukraine has created global upheaval in the energy markets, and that Russia’s increasingly aggressive war tactics in Ukraine could eventually lead towards a tipping point for recession. Asked about the future prospects of the S&P500 and when to expect a bottom, Griffin said that he expects positive growth over the next two quarters, and dismissed the notion that all was “gloom and doom,” noting that there were 11 million open jobs with a 3.6% unemployment rate in the United States.
The billionaire said that the world economy was undergoing a rollback of globalization, which had brought immense benefits to the world’s economies, especially the United States. Countries around the globe are now moving towards “in-sourcing,” which Griffin sees as one of the two most important factors leading towards inflation, along with a shortage of workers in the US market. Ken Griffin also talked about how the market was rotating from growth stocks, which offer more potential in the future, to value stocks, which offer a more stable and consistent outlook in the present.
In the first quarter of 2022, Citadel Investment Group initiated positions in 1,689 stocks, increased stakes in 5,558 equities, reduced holdings in 6,042 and completely exited 1,962 stocks. The top 10 holdings of the fund represented 31.76% of its total portfolio. In this article, we’ll focus on the best tech stock to buy according to billionaire Ken Griffin, which includes stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Tesla, Inc. (NASDAQ:TSLA), along with others discussed below.
Our Methodology
Best Tech Stocks to Buy According to Billionaire Ken Griffin
10. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Citadel Investment Group’s Stake Value: $254.91 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 83
Advanced Micro Devices, Inc. (NASDAQ:AMD) starts off our list of billionaire Ken Griffin’s favorite tech stocks. The California-based firm provides graphic cards, microprocessors, and motherboard chipsets that are used in PCs, smartphones, workstations, and data center servers around the world.
Ken Griffin’s stake in Advanced Micro Devices, Inc. during the first quarter consisted of 2.33 million shares valued at $254.9 million, representing 0.05% of his total portfolio. This was a 3% reduction over the previous quarter. In total, 83 hedge funds were long on the company shares at the close of the first quarter, up from 69 hedge funds a quarter ago. Fisher Asset Management increased his position in Advanced Micro Devices, Inc. by 23% in the first quarter, becoming its biggest shareholder with a $2.66 billion stake.
On June 22, Morgan Stanley analyst Joseph Moore resumed coverage of Advanced Micro Devices, Inc. with an ‘Overweight’ rating and a $103 price target. He sees the firm as well-positioned to post share gains over the next two years, and notes that it will continue to increase its share in the cloud services market as supply constraints ease.
In the first quarter, Advanced Micro Devices, Inc. posted earnings per share of $1.13, surpassing Street estimates by $0.20. Revenue of $5.89 billion was also above estimates by $358.26 million.
Investment firm Carillon Tower Advisers talked about Advanced Micro Devices, Inc. in its Q4 2021 investor letter. Here’s what the fund said:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
Along with Amazon.com, Inc., Alphabet Inc., and Tesla, Inc., Advanced Micro Devices, Inc.) is one of the most prominent stocks in Ken Griffin’s 2022 portfolio.
9. Broadcom Inc. (NASDAQ:AVGO)
Citadel Investment Group’s Stake Value: $301.52 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 71
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor manufacturer based in California, which operates through its segments: Semiconductor Solutions and Infrastructure Software. Ken Griffin increased his stake in the firm by 213% in the first quarter, standing at roughly 479,000 shares worth $301.5 million. In comparison, the billionaire owned 153,000 shares of Broadcom Inc. a quarter ago.
On May 27, Mizuho analyst Vijay Rakesh reiterated a ‘Buy’ rating on Broadcom Inc. shares and raised the price target to $725 from $700. He holds that the company’s planned acquisition of VMware (NYSE:VMW), a US-based cloud computing company, potentially unlocks 45% upside. Financial Times recently reported that the deal is set to undergo a lengthy antitrust investigation in the EU over concerns it could possibly harm competition across the global tech industry.
Investors were seen piling into Broadcom Inc.. At the end of the first quarter, 71 hedge funds owned positions in the firm, as compared to 62 hedge funds a quarter earlier. Its largest Q1 shareholder was Fisher Asset Management with a position worth nearly $895 million.
Broadcom Inc. announced its Q1 earnings on May 26, and disclosed earnings per share of $9.07, beating estimates by $0.35. Quarterly revenue was recorded at $8.1 billion, exceeding market forecasts by $194.74 million and representing a 22.6% jump from the year-ago quarter.
8. Uber Technologies, Inc. (NYSE:UBER)
Citadel Investment Group’s Stake Value: $338.03 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 144
Uber Technologies, Inc. (NYSE:UBER) is up next on the list of top tech stocks to buy according to Ken Griffin. The billionaire owned 9.47 million shares of the firm at the end of the first quarter, priced at around $338 million. This was a decrease of 37% over the previous quarter, where he owned roughly 14.91 million shares of Uber Technologies, Inc..
The popular ride-hailing firm has seen diminishing investor confidence as of late. At the close of Q1 2022, 144 hedge funds owned positions in Uber Technologies, Inc., as compared to 153 hedge funds a quarter earlier.
On June 9, Goldman Sachs analyst Eric Sheridan reduced the firm’s price target on Uber Technologies, Inc. to $45 from $55, and maintained a ‘Buy’ rating on the shares. The analyst has updated his model to reflect a greater probability of a weaker macro environment, and is taking a more conservative view on the ride-sharing and food delivery sectors. Uber Technologies, Inc. recently announced that its popular ride-sharing feature called UberPool would be relaunching under the name UberX Share. This service was cancelled amid the Covid pandemic, and will now be available in a number of major US cities.
ClearBridge Investments, an investment management firm, mentioned Uber Technologies, Inc. in its Q3 2021 investor letter. Here’s what it said:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber Technologies, Inc. will also be a key player in the transition from internal combustion engines to EVs.”
7. Visa Inc. (NYSE:V)
Citadel Investment Group’s Stake Value: $348.52 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is a digital payments company headquartered in California. Ken Griffin owned 1.57 million shares of the company at the end of March, worth $348.5 million. This was an increase in stake of 4% over the previous quarter, and amounted to a 0.07% slice of his overall portfolio.
Baird analyst David Koning on June 22 named Visa Inc. as his “bullish Fresh Pick”, and kept an ‘Outperform’ rating on the shares with a $290 price target. He noted that the firm would likely remain quite resilient in a recession-scenario given growing purchase volume. Koning is bullish on Visa stock as cross-border transactions and inflation provide ongoing growth drivers.
Investors were seen buying Visa Inc. stock. At the end of March, 159 hedge funds were long on the company shares, as compared to 142 hedge funds a quarter earlier. The combined value of Q1 hedge fund holdings stood at more than $28 billion. The largest shareholder of Visa Inc. during the first quarter was TCI Fund Management with a $4.41 billion stake.
In the first quarter of 2022, Visa Inc. reported earnings per share of $1.79, exceeding estimates by $0.14. $7.19 billion in revenue for the quarter registered year-on-year growth of 25.5% and also beat market forecasts by $365.4 million.
Here is what Polen Capital, an investment firm, had to say about Visa Inc. in its Q1 2022 investor letter:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
6. Tesla, Inc. (NASDAQ:TSLA)
Citadel Investment Group’s Stake Value: $370.64 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 80
Tesla, Inc. is an EV manufacturer based in the United States. The company stock represented 0.07% of Ken Griffin’s Q1 portfolio, with roughly 344,000 shares valued at $370.6 million. This showed an increase of 20% over the previous quarter where Griffin owned 289,000 Tesla shares.
On June 24, Credit Suisse analyst Dan Levy maintained an ‘Outperform’ rating on Tesla, Inc. shares and lowered the price target to $1,000 from $1,125. Despite forecasting lower than expected Q2 deliveries, the analyst retains a bullish outlook on Tesla and sees its long-term fundamentals remaining intact. He also notes that widening supply chain issues could extend Tesla’s lead over other firms in the EV space.
Out of all the hedge funds tracked by Insider Monkey, 80 reported ownership of stakes in Tesla, Inc. at the close of the first quarter with a combined value of $11.28 billion. This is down from 91 hedge funds a quarter ago. Its largest Q1 shareholder was Cathie Wood’s ARK Investment Management, a long-time investor, with a $1.71 billion stake.
Grantham Mayo Van Otterloo & Co. LLC, an investment management firm, mentioned Tesla, Inc. in its Q1 2022 investor letter. Here’s what the fund said:
“To put the demand growth for clean energy materials into perspective, let’s look at Tesla (NASDAQ:TSLA). At its Battery Day last year, Tesla projected three terawatt hours of lithium-ion battery capacity needed in 2030 for the EVs and storage they expect to produce. To reach this target, Tesla alone would gobble up approximately 75% of the world’s current nickel production and four times the world’s current lithium production. These numbers are astounding enough, but when one considers that EVs currently represent just 15% of global nickel demand and about 45% of lithium demand and that Tesla will likely be producing only a small proportion of the world’s EVs in 2030, the implications are staggering. Clean energy materials companies will make a lot more money in the decades to come than they ever have both because they will be selling a lot more metric tons of material and because there are certain to be shortages where supply can’t keep up with the rapidly growing demand.”
Just like Amazon.com, Inc. and Alphabet Inc., Tesla, Inc. is one of the best tech stocks to buy according to billionaire Ken Griffin.
5. Alphabet Inc. (NASDAQ:GOOG)
Citadel Investment Group’s Stake Value: $371.33 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 160
Up next is Alphabet Inc., which represents 0.07% of Ken Griffin’s Q1 portfolio with nearly 134,000 shares priced at $371.3 million. In total, 160 hedge funds from Insider Monkey’s Q1 database were long on GOOG shares, in contrast to 158 hedge funds a quarter ago.
On June 1, Morgan Stanley analyst Brian Nowak reiterated an ‘Overweight’ rating on Alphabet Inc. shares, and lowered the price target to $3,000 from $3,270 owing to a more conservative online advertising and e-commerce view amid “rising macro and micro uncertainty.” Morgan Stanley now pegs the probability of recession at 35%, as opposed to 5% at the start of the year. As of June 27, shares of Alphabet Inc. are down 18.29% in the year to date.
For the quarter ending March, Alphabet Inc. posted EPS which fell below estimates by $0.94. However, quarterly revenue of $68 billion was above analysts’ predictions by $121.3 million and showed year-on-year growth of 22.95%.
Here is what Farrer Wealth Advisors had to say about Alphabet Inc. in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
4. T-Mobile US, Inc. (NYSE:TMUS)
Citadel Investment Group’s Stake Value: $404.27 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.08%
Number of Hedge Fund Holders: 91
T-Mobile US, Inc. (NYSE:TMUS) offers mobile and data connectivity services in the United States. It was given a ‘Buy’ rating by Tigress Financial analyst Ivan Feinseth on June 24, with an increased price target of $195 from $185. The analyst sees the firm’s growth momentum continuing to accelerate amid ongoing demand for high-speed network connectivity. If subscriber growth remains strong, Feinseth thinks T-Mobile could potentially begin its $60 billion share repurchase program later this year. On June 21, the company announced the expansion of its wireless service agreement with Dish Network (NASDAQ:DISH) which was initially made in 2020 and offers Dish network’s brands with access to T-Mobile’s 5G network. As of June 27, T-Mobile US, Inc. stock has gained 19.79% in the year so far.
Ken Griffin’s Citadel Investment Group, according to regulatory filings for the first quarter, owned 3.14 million shares of T-Mobile US, Inc. at a value of $404 million, up 89% over the previous quarter where the fund owned 1.67 million TMUS shares. The larger hedge fund industry was also eager on T-Mobile US, Inc. in the first quarter, where 91 hedge funds owned positions in the firm, as compared to 86 hedge funds in the previous quarter.
For the first quarter of 2022, T-Mobile US, Inc. posted earnings per share of $1.41, outperforming estimates by $1.05. However, revenue of $20.12 billion for the quarter fell below expectations by $16.9 million.
ClearBridge Investments, an investment management firm, talked about T-Mobile US, Inc. in its Q4 2021 investor letter. Here is what the fund said:
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
3. Accenture Plc (NYSE:ACN)
Citadel Investment Group’s Stake Value: $465.44 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 63
Accenture Plc (NYSE:ACN) is a global giant in the field of information technology consulting and services. It serves clients in more than 120 countries around the globe, in sectors such as insurance, finance, healthcare, media, energy, travel, automobile manufacturing and retail. Three quarters of all Fortune Global 500 companies count among the clients of Accenture Plc.
RBC Capital analyst Daniel Perlin on June 24 reiterated an ‘Outperform’ rating on Accenture Plc shares and revised the price target to $357 from $435. The company posted a strong quarter which saw double-digit growth across all services, according to the analyst, who sees the firm’s bookings growth remaining solid, with 10% year-on-year growth in new bookings. As of June 27, Accenture Plc pays a dividend yield of 1.31% to shareholders.
As of the end of the first quarter of 2022, 63 hedge funds were long Accenture Plc with combined stakes worth $3.95 billion. This shows a positive trend from the previous quarter where 50 hedge funds were stakeholders in the company. With a $770 million position, Ako Capital was the leading shareholder of Accenture Plc in the first quarter of 2022.
Here is what Polen Capital, an asset management firm, had to say about the prospects and market position of Accenture plc (NYSE:ACN) in its Q1 2022 investor letter:
“Accenture’s business is firing on all cylinders and continue to enjoy an acceleration in their respective fundamentals because of the increase in digitization around the world. Nearly every company today is searching for ways to become more digital, and Accenture is positioned to provide many of the solutions these companies seek. This inflection in fundamentals was not lost on the market, and each business’s stock performed exceptionally well in 2021. In fact, they represented two of the three top absolute performers for the Global Growth Portfolio last year. As a result, its stock is currently more fully priced. As such, we lowered Accenture to an average weight. We maintain high conviction in the business and plan to own it for many years, but recognize the increase in their prices.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Citadel Investment Group’s Stake Value: $574.11 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 271
With 271 long hedge fund bets, Amazon.com, Inc. is the most popular stock to hold according to the Q1 database of Insider Monkey which tracks a total of 912 hedge funds. Ken Griffin’s stake in the company was worth $574 million in the first quarter of 2022, representing 0.11% of his overall portfolio.
On June 16, Amazon.com, Inc. announced that its annual Prime Day would be held on July 12 and subsequently kicked off promotions for the day. Prime Day is one of the largest online sales in the US, and offers Amazon Prime members with access to exclusive mega sales and discounts. Jefferies analyst Brent Thill estimates that Prime Day will contribute a 6% and 4% boost to Q3 GMV (gross merchandise volume) and sales growth, respectively. He also sees the mega sale helping drive Amazon Prime adoption, especially in international markets. The analyst gave Amazon.com, Inc. an unchanged ‘Buy’ rating on June 27, along with a $163 price target.
In Q1 2022, Amazon.com, Inc.’s (NASDAQ:AMZN) revenue stood at $116.44 billion, below market estimates by $622.9 million. EPS also came in below estimates by $0.80.
Investment firm Weitz Investment Management talked about several stocks in its Q1 2022 investor letter, and Amazon.com, Inc. was one of them. The fund said:
“Amazon.com’s (NASDAQ:AMZN) stock was down modestly in the quarter, but opportunistic purchases helped the position contribute positively to the Fund. Our index short positions against ETFs tracking market indexes provided helpful ballast during the first quarter drawdown but were otherwise detractors for the fiscal year. During the quarter, we covered roughly 20% of our S&P 500 short and 50% of our Nasdaq 100 short at progressively lower prices. Among our long equities, we added materially to high-conviction holdings Amazon.com.”
1. AT&T Inc. (NYSE:T)
Citadel Investment Group’s Stake Value: $577.86 million
Percentage Of Citadel Investment Group’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 74
AT&T Inc. is Ken Griffin’s favorite tech stock to buy, according to his portfolio for the first quarter of 2022. The billionaire’s position in the communication services firm consisted of 24.45 million shares worth nearly $578 million. This was a reduction of 45% in stake over the previous quarter, where Citadel Investment Group owned nearly 58 million shares of the firm. Overall, hedge fund sentiment around AT&T Inc. was positive at the end of the first quarter, where 74 hedge funds reported bullish bets on the company, as compared to 70 hedge funds a quarter earlier.
On June 16, Tigress Financial analyst Ivan Feinseth lowered the firm’s price target on AT&T Inc. to $28 from $31 and maintained a ‘Buy’ rating on the company shares. The analyst attributed the price target drop to the firm’s Warner Media spin-off as it pivots back to its communication focus. He believes the firm’s “resilient” business model and subscriber growth will lead towards long-term shareholder value creation and increasing cash flow. Since the start of the year, AT&T Inc. has gained 8.91% as of June 27.
In the first quarter of 2022, AT&T Inc. pulled in a revenue of $38.1 billion, missing estimates by $129.8 million. However, EPS of $0.77 was recorded above analysts’ expectations by $0.02.
Here is what asset management firm Weitz Investment Management had to say about AT&T Inc. in its Q4 2021 investor letter:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T Inc. to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
You can also take a look at Billionaire Lee Ainslie’s Top 10 Stock Picks and 15 Fastest Growing Franchises.
