Below are the 5 best tech stocks to buy now according to billionaire Laffont. For Phillipe Laffont’s portfolio adjustments and investment strategy please see 10 Best Tech Stocks To Buy Now According To Billionaire Laffont.
5. Zoom Video Communications, Inc. (NASDAQ: ZM)
The pandemic darling Zoom Video Communications, Inc. (NASDAQ: ZM) has been a member of Phillipe Laffont’s portfolio since the second quarter of 2019. Shares of Zoom Video grew 112% in the last twelve months. Coatue Management held 2.5 million shares of the video calling company at the end of the fourth quarter.
Baron Opportunity Fund, which returned 23.02% (institutional shares) in Q4, highlighted a few stocks including Zoom Video in the fourth quarter investor letter. Here’s what Baron Opportunity Fund stated:
“Zoom Video Communications, Inc. is a cloud-based software company providing a video-first platform for communication. Shares of Zoom declined during the fourth quarter on profit taking following the strong run in the stock because of accelerated pandemic-driven Zoom adoption, revenue growth, and free cash flow generation. We retain conviction as Zoom remains a leading player in disrupting the $100 billion unified communications market with its scalable, globally distributed, cloud-based, video-first offering, while its well-known brand (Zoom is now a verb!) should enable it to grow profitably as it takes market share.”
4. Uber Technologies, Inc. (NYSE: UBER)
Billionaire Phillipe Laffont’s strategy of adding to his existing Uber Technologies position appears to be working. This is because shares of the ride-sharing company rose almost 5% in 2021, extending the six months gains to 60%. Uber was representing 4.04% of Coatue Management’s 13F portfolio at the end of the fourth quarter, up 78% from the previous quarter.
RiverPark Advisors stated in the fourth quarter investor letter that Uber’s businesses will grow in the years ahead. Here is what RiverPark Advisors said:
“UBER was also a strong contributor, as shares rallied following the approval of California’s Proposition 22 by voters, allowing the company’s California-based drivers to remain independent contractors (rather than become more expensive employees). We believe this news is not just about the 10%-15% of Uber’s revenue tied to California, but the influence this will have on other states reassessing driver pay. UBER also reported strong third quarter results with Delivery Gross Bookings growing 135% year-over-year which nearly fully offset a reduction in Mobility Gross Bookings, which were down 50% year over year. Total Gross Bookings for the quarter were down only 10% year over year as compared with down 35% last quarter.
Despite the COVID disruption, UBER remains the undisputed global leader in ride sharing (44% of the Company’s third quarter revenue), with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery (46% of revenue), where it is number one or two in the more than 25 countries in which it operates. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 100 million users (by comparison, Amazon Prime has 130+ million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage and worker staffing for shift work. At its current $96 billion market capitalization, UBER trades at only 6x next year’s revenue from its two core businesses. Additionally, the company has substantial, seemingly unrecognized, value in its several nascent development businesses and another $12 billion in equity stakes in synergistic businesses around the world.”
3. Tesla, Inc. (NASDAQ: TSLA)
The world’s largest electric vehicle manufacturer Tesla Motors Inc (NASDAQ: TSLA) is the third biggest stock holding of Coatue Management. Despite a 30% stake sale in the fourth quarter, tiger cub’s hedge fund held 2.1 million shares of Tesla at the end of the fourth quarter. Shares of Tesla are struggling in 2021 following a massive growth in 2020.
In the fourth quarter investor letter, Baron Opportunity Fund presented a bullish outlook for Tesla. Here’s what Baron Opportunity Fund stated:
“Tesla, Inc. designs, manufactures and sells fully electric vehicles, solar products, and energy storage solutions. The stock increased on strong financial results, including profitability that exceeded market forecasts and strong growth across different geographies and vehicle programs. Indeed, in the third quarter, Tesla delivered almost 140,000 total vehicles – with strong unit level economics of 27.7% GAAP automotive gross profit margins – and another quarter of GAAP profitability and strong free cash flow (almost $1.4 billion). Recently, Tesla announced a record of over 180,000 total vehicle deliveries for the fourth quarter, effectively hitting its goal of 500,000 deliveries for the calendar year, a projection given before the COVID pandemic. In addition, we believe newly released full selfdriving functionality should yield further improvements in unit economics and open exciting new growth opportunities. Lastly, Tesla joined the S&P 500 Index, a meaningful milestone that significantly expands the potential shareholder base.”
2. PayPal Holdings, Inc. (NYSE: PYPL)
The payment technology giant Paypal Holdings Inc. (NYSE: PYPL) extended the bull-run into 2021 on the back of user and revenue growth. The company’s strategy of introducing crypto services added to its fundamentals and financial forecast. It is ranked second in the list of 10 best tech stocks to buy now according to billionaire Laffont.
In the Q4 investor letter, Polen Capital Management forecasted double-digit growth for PayPal in the years ahead. Here is what Polen Capital Management stated:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
1. The Walt Disney Company (NYSE: DIS)
Shares of Walt Disney (NYSE: DIS) grew close to 4.5% this year, extending the six months gains to 53%. Coatue Management increased its stake in the world’s largest entertainment giant by 17% to 7.49% of the overall portfolio. Economic reopening and easing social distancing policies is the catalyst for Walt Disney’s share price.
Semper Augustus Investments Group, an investment management firm, highlighted a few stocks including Disney in the fourth-quarter investor letter. Here is what Semper Augustus said:
“With few exceptions, portfolio activity added tremendous earning power. Sales were generally undertaken at high prices where price gains had outstripped fundamentals and thus as earnings yields diminished. Buys added wholesale earnings power. When numerous holdings plunged in price in March and later, we both added to and initiated positions at high single-digit expected earnings yields.
Portfolio activity in Disney provides an example of the opportunity the year brought. Disney was originally purchased in 2018 prior to the closing of their merger with Twenty-First Century Fox (21st Century Fox). Disney’s shares were weak during the prior four years, largely due to the well-known fact that cord cutting was harming Disney’s valuable ESPN franchise. Hard to believe in my household but some people evidently don’t enjoy watching televised sports, and as the highest priced platform in the traditional cable or satellite bundle, a loss of subscribers comes with a loss of revenue. Further, the merger-arbitrage community had bid up the price of Fox and down the price of Disney shares. At $100 per share, Disney traded for roughly 15 times then its earning power.”
You can also take a peek at Billionaire Ken Griffin’s Top 10 Stock Picks and Billionaire Nicholas Pritzker’s Tao Capital’s Best Stock Ideas.
