In this article, we take a look at five tech stocks that are trending today. If you want to take a look at some more stocks that are making headlines on Friday and the latest market situation, go to 10 Tech Stocks Making Headlines on Friday.
5. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has fallen 6.44% as of 12:29 PM ET after Brad Reback at Stifel lowered the price target on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) from $250 to $205, reflecting a decrease of 18%. Even though the analyst believes that CrowdStrike Holdings, Inc. (NASDAQ:CRWD) reported “solid” Q1 results, he expects the stock’s high valuation to decline. Reback shared that his price target is reflective of “recent multiple compression.”
Baron Funds shared its insights on CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q1 2022 investor letter. Here’s what was said about the company:
“CrowdStrike, Inc. provides cloud-delivered, next generation security solutions via its Falcon platform consisting of end-point protection, advanced persistent threat, security information, event management, and cloud workload protection. Shares rose 11% in the first quarter, on the back of impressive quarterly results with net new annual recurring revenue (ARR) accelerating for the second straight quarter to 52% year-over-year and the company’s favorable unit economics driving 30% free cash flow margins. Moreover, key new disclosures highlight how non-end-point products are seeing momentum with cloud product-generated ARR surpassing $100 million, representing 8% of net new ARR in the quarter. With more workloads migrating to or starting in the cloud, we believe CrowdStrike is well positioned to compound at high growth rates for years given its unique product platform and attractive go-to-market business model.”
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) was held by 80 hedge funds out of the 912 funds being tracked by Insider Monkey as of Q1 2022.
4. Okta, Inc. (NASDAQ:OKTA) has gained 7.69% as of 12:30 PM ET after the San Francisco, California-based identity and access management company increased its guidance for Q2 2022 and the rest of the year. The analysts appreciated the Q1 results and highlighted that Okta, Inc. (NASDAQ:OKTA) has recovered from the data breach that took earlier this year. Following the results, Rudy Kessinger at DA Davidson increased the price target on Okta, Inc. (NASDAQ:OKTA) from $125 to $140 and maintained a Buy rating on the stock. The analyst highlighted that the data breach had a short-term financial impact on Okta, Inc. (NASDAQ:OKTA).
Okta, Inc. (NASDAQ:OKTA) was discussed in the Q2 2021 investor letter of Lakehouse Capital. Here’s what the investment management firm said:
“The Fund held 20 positions as of the end of June and exited four during the year (including) Okta. 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.”
Okta, Inc. (NASDAQ:OKTA) was held by 46 hedge funds as of Q1 2022.
3. Snowflake Inc. (NYSE:SNOW) has gained 0.05% as of 10:01 AM ET after Simon Leopold at Raymond James initiated coverage on the Bozeman, Montana-based data warehousing company. The analyst gave Snowflake Inc. (NYSE:SNOW) stock an Outperform rating with a price target of $184. In a research note issued to investors earlier today, the analyst highlighted that the company’s cloud-based data warehousing business could compete against cloud-agnostic and public cloud operators because of its uniqueness and differentiation. Leopold expects Snowflake Inc. (NYSE:SNOW) to gain share in the massive market and ever-increasing total addressable market (TAM). The analyst expects the top line to grow by 50% annually for the next three years.
In its Q1 2022 investor letter, Snowflake Inc. (NYSE:SNOW) was mentioned by Baron Funds. Here’s what the asset management firm said:
“Snowflake grew revenues…106% (to $1.2 billion — while new bookings in the fourth quarter alone were $1.2 billion in contract value) with 12% margins. The stock was down 32% in the first quarter. We believe that these companies, along with many others that we own, are the long-term beneficiaries of digital transformation, a multi-decade paradigm shift sweeping global economies today. Frank Slootman, Snowflake’s CEO, explained it this way in his most recent earnings call with investors:
“Snowflake’s growth is driven by digital transformation and long-term secular trends in data science and analytics, enabled by cloud-scale computing and Snowflake’s cloud-native architecture. Snowflake is a single data operations platform that addresses a broad spectrum of workload types and incredible performance economy and governance. As a platform, Snowflake enables the data cloud, a world without silos and the promise of unfettered data science.”
In plain English it means that we want to make better decisions and we have all this data available to us. Snowflake will enable businesses to utilize all their data to improve their decision-making.
Snowflake Inc. provides a data platform for large-scale data analytics. Shares fell 32% during the first quarter despite reporting strong results, finishing 2021 with 106% year-over-year revenue growth, while booking $1.2 billion of new business in the fourth quarter alone. Shares declined due to the rotation out of fast-growing long-duration stocks as well as concerns over the company’s newly introduced infrastructure improvements, which make customers more efficient in using the Snowflake platform (lowering cost on a per usage basis). While some investors viewed that negatively due to the near-term impact on usage-based revenues, we see this as a positive development, since putting customers first tends to create a lot of value over the long term. We believe that by reducing costs to customers, they will migrate more workloads to Snowflake, making the company better positioned to capture a bigger portion of its large market opportunity and extending its technology leadership over competitors. We remain excited about Snowflake’s best-in-class growth at scale with favorable unit economics, addressing one of the largest opportunities in technology.”
Overall, 81 hedge funds held a stake in Snowflake Inc. (NYSE:SNOW) as of Q1 2022.
2. Meta Platforms, Inc. (NASDAQ:FB) has slumped 3.54% as of 12:31 PM ET following Sheryl Sandberg’s decision to step down as the company’s Chief Operating Officer (COO). She has been associated with Meta Platforms, Inc. (NASDAQ:FB) for the past 14 years and will leave the day-to-day operations in the fall of this year. Sandberg will be replaced by Chief Growth Officer (CGO), Javier Olivan. Mr. Olivan will take over a wide range of responsibilities at a time when the core ad business is under pressure due to broad macroeconomic uncertainty and privacy changes by Apple Inc. (NASDAQ:AAPL).
Here’s what Giverny Capital said about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:
“If there is any good news, I don’t believe this group suffered material impairments to their long-term earnings trajectory. Rather, relatively small earnings misses or reductions to short-term guidance led to large stock declines. I added to several of these positions during the quarter.
However, our holding Meta Platforms, the detested social media business formerly known as Facebook, deserves some attention. It suffered an earnings miss in the fourth quarter of 2021 and provided sobering future guidance. While this qualifies as disappointing news, I think the market reaction was more of a primal scream than a considered response.
As a person who manages other people’s money for a living, I can tell you with confidence that clients don’t like Meta. A few of you won’t own it, restricting me from buying it for you. Others defer to me,
grudgingly. There is no other security in our portfolio like this. When a company is so widely disliked, the main reason to hold it is because it is “working,” to use the horrible Wall Street parlance. In other words, your manager owns it because it keeps going up. Once it stops going up, professional money managers happily accept the chance to sell it. No more cranky calls from clients questioning their ethical compass.The rub, however, is that despite the bad earnings news the economics of Meta’s social media businesses remain exceptionally good. In 2021, for every dollar of revenue generated Meta spent 63 cents on expenses and reported 37 cents of pretax profit. That was considered disappointing, even though very few businesses generate 37% profit margins. On top of that, fully one-third of expenses, or 21 cents on the dollar of revenue, is spent on research & development, which is investment in future growth. In Meta’s case, this amounts to about $25 billion a year invested in various new projects, the most important of which is the metaverse. R&D is not completely discretionary as companies have to invest in innovation or stagnate. But management certainly has flexibility as to the pace of spending…” (Click here to see the full text)
Of the 912 hedge funds in Insider Monkey’s database, 200 funds held a stake in Meta Platforms, Inc. (NASDAQ:FB) as of Q1 2022.
1. Airbnb, Inc. (NASDAQ:ABNB) has slid 1.81% as of 12:33 AM ET after Naved Khan at Truist lowered the price target on Airbnb, Inc. (NASDAQ:ABNB) from $190 to $160 while maintaining a Hold rating on the stock. The analyst anticipates a strong recovery in travel demand in the short term but sees sensitivity to inflationary prices amongst travelers.
Tollymore Investment Partners shared its stance on Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2021 investor letter. Here’s what the firm said:
“Today disruptors are not typically seeking to replace incumbents entirely. Rather, they break the links in the customer journey, in doing so better aligning monetisation with value creation and minimising externalities. For example, Airbnb broke the link between staying in residential property and owning it. Airbnb is a specific example of a business model innovation which separated asset use from ownership. This is hardly a novel idea; it’s called renting. Rental models lend themselves to assets which are expensive and durable, and where usage is infrequent.”
Airbnb, Inc. (NASDAQ:ABNB) was held by 66 hedge funds as of Q1 2022.
You can also take a peek at the 10 Dividend Growth Stocks Popular on Robinhood and 10 Stocks to Buy According to Canyon Capital Advisors.
