In this article, we examined billionaire Chase Coleman’s performance and discussed why he is bullish on tech stocks. We also reviewed 10 tech stocks to buy according to billionaire Chase Coleman.
Chase Coleman, who has recorded market-beating returns for the past two decades with a compound annual net return of over 20%, lost billions of dollars due to the recent tech market selloff. Tiger Global Management is down by a whopping 23% in the first two months of 2022. In March, the prices of his stock holdings continued to decline due to rising inflation, uncertainty-related to interest rate hikes, and the impact of Russian aggression on investors’ sentiment. Consequently, the firm is likely to post a double-digit loss for the first quarter of 2022.
Despite substantial losses, Chase Coleman established a new fund with a limited amount of capital to buy the dip in tech stocks. The strategy reflects that the tiger cub is bullish over the fundamentals of tech stocks and he is seeing the dip as a buying opportunity.
Tiger Global’s Q4 filings show that the firm is optimistic over the fundamentals of tech stocks. Tiger Global bought 16 new stocks and added to its 26 existing positions during the December quarter, most of them belonging to information technology and communications, and consumer discretionary sectors. The tiger cub has also added several fintech companies to his portfolio over the past few quarters.
As of December, Microsoft Corporation (NASDAQ:MSFT), Sea Limited (NYSE:SE), and Snowflake Inc. (NYSE:SNOW) were the top 3 tech stock holdings of Tiger Global’s 13F portfolio. The tech-focused hedge fund bought additional shares of Sea Limited (NYSE:SE) and Snowflake Inc. (NYSE:SNOW) during the December quarter. However, it dumped 35% of its stake in Microsoft Corporation (NASDAQ:MSFT) to take advantage of the recent share price run.
Datadog, Inc. (NASDAQ:DDOG), DocuSign, Inc. (NASDAQ:DOCU), Zoom Video Communications, Inc. (NASDAQ:ZM), ServiceNow, Inc. (NYSE:NOW), and CrowdStrike Holdings, Inc. (NASDAQ:CRWD) were also on the list of 10 tech stocks to buy according to billionaire Chase Coleman.
Chase Coleman of Tiger Global Management
Our Methodology:
For this analysis, we made use of Tiger Global Management’s 13F filings as of December. The firm’s portfolio is composed of 169 stock holdings and is worth around $45 billion, down from $52 billion in the previous quarter.
10 Tech Stocks to Buy According Billionaire Chase Coleman
10. Datadog, Inc. (NASDAQ:DDOG)
Tiger Global Management’s Stake Value: $944 million
Percentage of Tiger Global Management’s Portfolio: 2.05%
Number of Hedge Fund Holders: 74
Chase Coleman has been steadily building a stake in Datadog, Inc. (NASDAQ:DDOG) since the second half of 2019. Besides the tech stocks selloff in 2022, the stake in Datadog, Inc. (NASDAQ:DDOG) contributed positively to Tiger Global’s returns over the past two years. Datadog, Inc. (NASDAQ:DDOG) is engaged in an observability service for cloud-scale applications and provides monitoring of databases, servers, and tools via a SaaS-based data analytics platform.
Datadog, Inc. (NASDAQ:DDOG) generated 84% year-over-year revenue growth in the fourth quarter while revenues grew 24% quarter over quarter.
In the fourth quarter investor letter, Artisan Partners, a high value-added investment management firm, mentioned a few stocks including Datadog, Inc. (NASDAQ:DDOG). Here is what Artisan Partners stated:
“Datadog, Inc. (NASDAQ:DDOG) is a leading provider of monitoring and analytics for cloud-based applications. The software has become central to how organizations deliver differentiated products and user experiences and optimize business processes—fueling the disruption taking place across nearly every industry. The success of this digital transformation trend is increasingly tied to quality and performance—in turn, driving strong secular demand for IT infrastructure and application monitoring platforms like Datadog, Inc. (NASDAQ:DDOG)’s. The company’s profit cycle was on clear display in its Q3 results, with 75% top line growth driven by new customer additions and existing customers adding additional services. Free cash flow margins expanded nicely as well. We believe Datadog, Inc. (NASDAQ:DDOG)’s low-touch, land-and-expand customer acquisition model combined with a steadily expanding product portfolio position it well for strong profit growth in the coming years, though we trimmed our position size during the quarter as shares approached our PMV estimate.”
9. DocuSign, Inc. (NASDAQ:DOCU)
Tiger Global Management’s Stake Value: $1 billion
Percentage of Tiger Global Management’s Portfolio: 2.29%
Number of Hedge Fund Holders: 49
Shares of DocuSign, Inc. (NASDAQ:DOCU) plunged around 40% year to date and the price is down around 70% from its 52-week high of $300. The substantial share price selloff could be an interesting opportunity for investors. DocuSign, Inc. (NASDAQ:DOCU) permits businesses to manage electronic agreements and eSignature. In addition to the broader tech market selloff, lower than expected guidance for 2023 negatively impacted investors’ sentiments. DocuSign, Inc. (NASDAQ:DOCU) now expects fiscal 2023 revenue in a range of $2.47 billion, down from analysts’ forecast for $2.61 billion.
In the fourth quarter investor letter, Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, mentioned a few stocks including DocuSign, Inc. (NASDAQ:DOCU). Here is what Longleaf Partners Fund stated about DocuSign, Inc. (NASDAQ:DOCU):
“When we step back and look at the stocks that we do not own, we feel better than ever because finally, too much ardor for these market favorites is making many of them fall harder. This began happening this year in the small-cap world, as first the SPAC market cooled off, then the IPO (initial public offering) market began cooling as well. We have now seen things changing for larger cap favorites like Docusign falling over 40% in a day after a quarter that wasn’t all that bad, because it must be truly GREAT when you are trading near 20x revenues. This has led to a narrowing of market leadership yet again, with five large tech stocks essentially drove the S&P 500.”
8. Zoom Video Communications, Inc. (NASDAQ:ZM)
Tiger Global Management’s Stake Value: $1.12 billion
Percentage of Tiger Global Management’s Portfolio: 2.45%
Number of Hedge Fund Holders: 40
Zoom Video Communications, Inc. (NASDAQ:ZM) is among the companies suffering from the back-to-work environment. Shares of Zoom Video Communications, Inc. (NASDAQ:ZM) fell sharply when compared to Tiger Global’s other top 10 tech stock holdings such as Microsoft Corporation (NASDAQ:MSFT), Sea Limited (NYSE:SE), and Snowflake Inc. (NYSE:SNOW). The stock price of Zoom Video Communications, Inc. (NASDAQ:ZM) lost close to 60% of its value in the last twelve months. Tiger Global Management lifted its stake in the company by 29% during the December quarter. The average median Wall Street analysts’ price target for Zoom Video Communications, Inc. (NASDAQ:ZM) is $166 while the low price target is $100.
Of the 924 hedge funds tracked by Insider Monkey, Zoom Video Communications, Inc. (NASDAQ:ZM) was in 40 portfolios as of December.
7. ServiceNow, Inc. (NYSE:NOW)
Tiger Global Management’s Stake Value: $1.4 billion
Percentage of Tiger Global Management’s Portfolio: 3.11%
Number of Hedge Fund Holders: 90
ServiceNow, Inc. (NYSE:NOW) is also on the list of 10 tech stocks to buy according to billionaire Chase Coleman. ServiceNow, Inc. (NYSE:NOW) is the long-running stock holding of Tiger Global Management and the firm left its stake unchanged in the company during the December quarter. ServiceNow, Inc. (NYSE:NOW) develops a cloud computing platform for enterprise operations. Shares of ServiceNow, Inc. (NYSE:NOW) declined in line with the broader market since the beginning of this year.
The number of long hedge fund positions declined in ServiceNow, Inc. (NYSE:NOW) in the past three quarters. Out of the 924 hedge funds tracked by Insider Monkey, ServiceNow, Inc. (NYSE:NOW) was in 90 portfolios.
6. CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Tiger Global Management’s Stake Value: $1.5 billion
Percentage of Tiger Global Management’s Portfolio: 3.35%
Number of Hedge Fund Holders: 75
Shares of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) remained in the green so far this year despite a significant broader tech stocks selloff. The cybersecurity technology company is a member of Chase Coleman’s portfolio since the second quarter of 2019. The stock price performance of CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is backed by its robust financial performance. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) generated 64% year-over-year revenue growth in the fourth quarter while free cash flow hit the $127 million level for the first time. Like Microsoft Corporation (NASDAQ:MSFT), Sea Limited (NYSE:SE), and Snowflake Inc. (NYSE:SNOW), CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is one of the top tech stocks to buy according to Chase Coleman.
In the fourth quarter investor letter, Carillon Tower Advisers, an investment management firm, expressed confidence in fundamentals for CrowdStrike Holdings, Inc. (NASDAQ:CRWD). Here is what Carillon Tower Advisers stated:
“CrowdStrike, a security software platform with leadership in protecting endpoints such as servers, computers, and other IT assets, delivered strong earnings results with exceptional recurring revenue and new customer growth. The firm’s shares were pressured in the quarter as valuation multiple compression punished high-growth stocks in a meaningful way. However, we don’t believe this to be company-specific and expect the firm to continue to execute well and exhibit positive fundamentals.”
5. Meta Platforms, Inc. (NASDAQ:FB)
Tiger Global Management’s Stake Value: $1.69 billion
Percentage of Tiger Global Management’s Portfolio: 3.69%
Number of Hedge Fund Holders: 229
Meta Platforms, Inc. (NASDAQ:FB) is one of the oldest members of billionaire Chase Coleman’s portfolio. Shares of the company are down significantly since the beginning of this year due to regulatory challenges. Besides that, the company appears in a strong position to back its share price.
In the fourth quarter investor letter, Polen Capital, an investment management firm, mentioned a few stocks including Meta Platforms. Here is what Polen Capital stated:
“We trimmed our position in Meta Platforms (formerly Facebook), balancing the short-term growth headwinds with the long-term opportunity and relocating the proceeds to Amazon. In our view, Meta’s core family of apps (Facebook, Instagram, and WhatsApp) remain strong and well-positioned for future growth from social media advertising and increasingly e-commerce within Meta’s respective apps. That said, we believe Meta’s heavy investment and major push in strategy, capital deployment, and innovation are likely to keep Meta’s earnings growth below what we would have otherwise expected in the medium term.”
4. Snowflake Inc. (NYSE:SNOW)
Tiger Global Management’s Stake Value: $2 billion
Percentage of Tiger Global Management’s Portfolio: 4.43%
Number of Hedge Fund Holders: 87
Chase Coleman of Tiger Global Management is significantly bullish over the long-term fundamentals of Snowflake Inc. (NYSE:SNOW), a high-growth cloud-based data management company whose stock has stumbled as rising inflation and higher interest rates drove investors toward more conservative investments.
Snowflake helps organizations simplify tasks with their cloud-based subscription services. The company’s stock price is down around 32% year to date. Of the 924 hedge funds tracked by Insider Monkey, Snowflake was in 87 portfolios as of December.
3. Nu Holdings Ltd. (NYSE:NU)
Tiger Global Management’s Stake Value: $2.4 billion
Percentage of Tiger Global Management’s Portfolio: 5.43%
Number of Hedge Fund Holders: 28
Billionaire Chase Coleman bought a huge $2.49 billion worth of stake in Nu Holdings Ltd. (NYSE:NU) during the fourth quarter of 2021. It is a fintech and technology company operating in Brazil, Mexico, and Colombia. As of December, Nu was the third-largest tech stock holding of the New York-based fund, accounting for 5.43% of the overall portfolio. Warren Buffett-backed Brazil-based financial services platform debuted on NASDAQ at the end of 2021. Since IPO its stock price has been making price swings in line with the broader market trends.
The company’s strategy of expanding its loan portfolio in high-yielding products is a key catalyst for a significant increase in profitability in the years ahead. The company’s continued expansion of its client base and introduction of new products will further bolster its financial numbers. UBS analyst Thiago Batista expects the company’s client base to reach 100M by 2026, with the majority based in Brazil.
2. Sea Limited (NYSE:SE)
Tiger Global Management’s Stake Value: $2.5 billion
Percentage of Tiger Global Management’s Portfolio: 5.45%
Number of Hedge Fund Holders: 111
Billionaire Chase Coleman lifted its stake in Sea Limited (NYSE:SE) by 10% during the December quarter. Shares of the company are down close to 45% in the last twelve months due to investors’ move towards values stocks. On a positive side, the company revenues are growing at a sharp pace. Sea generated nearly $10 billion in revenue last year, more than double the figure it reported for 2020.
Sea was in 111 hedge funds portfolios as of December, according to data tracked by Insider Monkey. Tiger Global Management LLC was the leading stakeholder in the company.
1. Microsoft Corporation (NASDAQ:MSFT)
Tiger Global Management’s Stake Value: $2.8 billion
Percentage of Tiger Global Management’s Portfolio: 6.21%
Number of Hedge Fund Holders: 266
Tiger Global Management sold 36% of its stake in Microsoft Corporation (NASDAQ:MSFT) during the December quarter. Despite that, Microsoft Corporation (NASDAQ:MSFT) was the largest tech stock holding of Chase Coleman’s portfolio. In addition to prospects for steady share price appreciation, Microsoft is a good stock hold for the long term due to a dividend factor.
Saturna Capital, an investment management firm, mentioned a few stocks including Microsoft. Here is what Saturna Capital stated:
“Only two companies remain from 2010’s top 10 list: Apple and Microsoft. Going back to 2000, only Microsoft remains. We expect that Microsoft will maintain its position as the dominant global provider of personal and business software, while growing its cloud business and potentially being a key provider of augmented and mixed hardware and software.
US Technology companies have been the equity market’s biggest winners in recent years. Because of the Amana Income Fund’s objective of current income, many of these zero- or low-dividend companies do not suit the Fund’s mandate. One that does — Microsoft, which returned 46.03% for 2021 — was the Fund’s second biggest contributor to returns during the year. While Technology no doubt underpins much of the current economy and its future potential, Tech stocks have also benefited from low inflation, globalization, and valuations that are near historic highs. With globalization backsliding and inflation worries escalating, we believe companies in other industries with strong financial positions, competitive advantages, strong management, attractive dividend yields, and reasonable valuations can offer investors diversification in the context of equity markets increasingly concentrated in a handful of very large Technology firms.”
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Disclosure: The article 10 Tech Stocks to Buy According Billionaire Chase Coleman is originally published on Insider Monkey.
