In this article, we discuss the 10 tech stocks to buy according to former VP Al Gore.
Former Vice President of the US Al Gore’s Generation Investment Management invests heavily in tech companies, especially those that incorporate the problem of climate in their operations and long-term strategy. Al Gore is currently serving as the chairman of Generation Investment Management, which he founded in 2004 along with David Blood.
Following his strategy of sustainable investing, Al Gore started ‘Just Climate’, a fund that would launch certain projects to decarbonize the economy. The fund is backed by some prominent investors, such as Goldman Sachs, Harvard Management Co., and Microsoft’s Climate Innovation Fund.
As of Q3, Generation Investment Management’s 13F portfolio holds a value of over $24 billion. In this article, we will focus on the tech stocks in Al Gore’s portfolio. Some of them are Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT).
Our Methodology:
In this article, we will discuss technology stocks in Al Gore’s 13F portfolio as of Q3. For this list, we took data from Generation Investment Management’s Q3 portfolio. The stocks are ranked according to their position in the portfolio.
Tech Stocks to Buy According to Former VP Al Gore
10. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 43
Generation Investment Management’s Stake Value: $291,967,000
Synopsys, Inc. (NASDAQ:SNPS) is an American technology company that specializes in chip design, software security, and IP integration. On December 2, the stock jumped 6.6%, as the company reported solid earnings in fiscal Q4. Synopsys, Inc. (NASDAQ:SNPS) experienced an 11.7% year-over-year growth in its revenue, while the company beat EPS estimates by $0.03 at $1.82.
As of Q3 2021, 43 hedge funds in Insider Monkey’s database reported owning stakes in Synopsys, Inc. (NASDAQ:SNPS), up from 41 in the previous quarter. The total value of these stakes is over $2.34 billion. Among these hedge funds, Alkeon Capital Management was the company’s leading shareholder in Q3, holding a $1 billion worth of stake.
Generation Investment Management holds 975,141 shares in Synopsys, Inc. (NASDAQ:SNPS) in Q3, worth roughly $292 million. The company represented 1.21% of Al Gore’s portfolio. Recently, DA Davidson and Wells Fargo raised their price targets on Synopsys, Inc. (NASDAQ:SNPS) to $400 and $415, respectively.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT), Synopsys, Inc. (NASDAQ:SNPS) is also one of the notable tech stocks in Al Gore’s portfolio.
Harding Loevner mentioned Synopsys, Inc. (NASDAQ:SNPS) in its Q3 2021 investor letter. Here is what the firm has to say:
“To keep innovating, foundries like those operated by TSMC and Samsung rely on capital equipment made by ASML, a Dutch company that enjoys a near-monopoly in lithography, a specialized process that allows for an increase in the density of transistors and their connections on each silicon wafer. The chips, in addition to getting denser, are also getting architecturally more complex, which presents a challenge for both chip designer and fabricator alike. Computer-aided design (CAD) software from US-based Synopsys not only allows circuits to be modelled down to their most microscopic elements but also offers the capability to verify their functionality and ease of manufacturing and to optimize the performance all virtually before the design is completed.”
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Generation Investment Management’s Stake Value: $296,001,000
As Microsoft Corporation (NASDAQ:MSFT) showed growth in cloud computing, the company aims to explore data management in 2022 as it holds a 28% share of the global market. Recently, Morgan Stanley lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $364, with an Overweight rating on the shares, appreciating the contribution of data management in the company’s gross revenue.
Generation Investment Management started investing in Microsoft Corporation (NASDAQ:MSFT) during the second quarter of 2014. In Q3 2021, the company accounted for 1.23% of former VP Al Gore’s portfolio. Since the start of 2021, the stock is up 48.7%, while its 12-month returns stood at 45.4%, as of the close of December 20.
The number of hedge funds tracked by Insider Monkey having stakes in Microsoft Corporation (NASDAQ:MSFT) grew to 250 in Q3, from 238 in the preceding quarter. These stakes hold a consolidated value of $65.8 billion, up from $62.4 billion.
Baron Funds mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter. Here is what the asset management firm has to say:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue beating Street estimates by 4.5%, an acceleration in Commercial Cloud revenue to 31% constant-currency growth, a four-point improvement in Commercial Cloud gross margins (to 70% from 66%), and GAAP earnings up 42%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by TAM expansion across its disruptive cloud product portfolio, as more companies look to transform and digitize their businesses, as well as strong operating leverage as its cloud products gain scale.”
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 66
Generation Investment Management’s Stake Value: $660,262,000
Generation Investment Management increased its stake in Intel Corporation (NASDAQ:INTC) by 76% in Q3 2021. The company accounted for 2.74% of Al Gore’s portfolio. According to analysts, Intel Corporation (NASDAQ:INTC) is well-positioned to grow as annual semiconductor sales are expected to reach $600 billion in 2022.
At the end of Q3 2021, 66 hedge funds tracked by Insider Monkey reported owning stakes in Intel Corporation (NASDAQ:INTC), down from 78 in the previous quarter. These stakes are valued at over $6.4 billion. Ken Fisher’s Fisher Asset Management was the company’s largest shareholder in Q3, with a stake worth $1.7 billion.
Recently, JPMorgan set a $64 price target on Intel Corporation (NASDAQ:INTC), which represents a 23.8% upside. In its Q3 earnings, the company posted an EPS of $1.71, beating estimates by $0.60.
Andaz Private Investments mentioned Intel Corporation (NASDAQ:INTC) in its Q3 2021 investor letter. Here is what the firm has to say:
“Intel (INTC) is trading on a high single digit earnings multiple and is essentially: 1) an oligopolistic foundry set to benefit from large government incentives; and 2) a semiconductor business that is returning to competitiveness after years of being a laggard.”
7. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 115
Generation Investment Management’s Stake Value: $723,636,000
Alibaba Group Holding Limited (NYSE:BABA) saw a decline in the number of hedge funds having stakes in it. In Q3, 115 hedge funds tracked by Insider Monkey held stakes in the company, down significantly from 146 in the preceding quarter. These stakes hold a value of over $10.2 billion.
Generation Investment Management started building its position in Alibaba Group Holding Limited (NYSE:BABA) during the fourth quarter of 2020, with shares worth roughly $360 million. In Q3 2021, the hedge fund holds a stake worth $723.6 million in the company, which accounted for 3% of Al Gore’s portfolio. Recently, Morgan Stanley noted that Alibaba Group Holding Limited (NYSE:BABA) has the potential to drive average revenue per user due to the diversification in its supplies and products. The firm lifted its price target on the stock to $180, while maintaining an Overweight rating on the shares.
In fiscal Q2 2021, Alibaba Group Holding Limited (NYSE:BABA) experienced a 29% year-over-year growth in revenue at $31.1 billion. Moreover, the company’s annual active customers were recorded at 1.24 billion, presenting an increase of 62 million customers from the prior-year quarter.
Palm Capital mentioned Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Over the past few months, political and regulatory turmoil has caused sharp collapses in the share prices of certain Chinese companies and clients have been increasingly asking us why we don’t invest in the country.
When we’ve answered this question in the past, we’ve found it useful to use the example of Alibaba. On face value, Alibaba appears to be a phenomenal business. It is the world’s largest e-commerce company in the world’s fastest-growing major economy. The marketplaces it operates are the most highly visited in China pointing to seemingly unassailable network effect advantages. These are solidified by its substantial investments and partnerships in an unrivalled logistics network. The company also has a crucial early mover advantage in cloud computing giving it a scale advantage that may quickly take it out of reach of competitors. And relative to its growth, the share often appears to be cheap.
However, if you dig beneath the surface, the investment case becomes less clear.
Alibaba’s accounting is questionable and murky, and its disclosure is poor. The company’s corporate structure is an intricate web of over 1,200 separate entities. And a staggering 890 of these entities were formed or acquired in the three years ending 2020. A large portion of its revenue growth each year is from consolidation of acquisitions with little disclosure of just how much. Significant entities appear and disappear from the company’s disclosures from year to year with no explanation. And almost three-quarters of the company’s total retained earnings since its 2014 IPO is from asset write ups with little explanation to back these up.”
6. Nutanix, Inc. (NASDAQ:NTNX)
Number of Hedge Fund Holders: 28
Generation Investment Management’s Stake Value: $731,210,000
Nutanix, Inc. (NASDAQ:NTNX) is an American cloud computing company that also provides software services. In Q3, Generation Investment Management increased its stake in the company by 4% and now holds shares worth over $731.2 million. Nutanix, Inc. (NASDAQ:NTNX) accounted for 3.03% of former VP Al Gore’s portfolio.
Over the last two years, Nutanix, Inc. (NASDAQ:NTNX) has beaten EPS estimates 100% of the time. In fiscal Q1 2022, following its previous trend, the company beat EPS consensus by $0.12 at -$0.22. According to Susquehanna, Nutanix, Inc. (NASDAQ:NTNX) is expected to deliver $1 billion in annual recurring revenue in the coming years. The firm lifted its price target on the stock to $50, with a Positive rating on the shares.
At the end of Q3 2021, 28 hedge funds in Insider Monkey’s database reported owning stakes in Nutanix, Inc. (NASDAQ:NTNX), down from 29 in the previous quarter. The total value of these stakes is over $1.2 billion.
Like Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT), investors and analysts are also paying attention to Nutanix, Inc. (NASDAQ:NTNX) in 2021.
Andaz Private Investments mentioned Nutanix, Inc. (NASDAQ:NTNX) in its Q2 2021 investor letter. Here is what the firm has to say:
“We increased Nutanix (NTNX) from a c.11% weight to the maximum 15% weight purchasing at $27.46 and $26.72 on May 5 and 6 respectively… We invested into several tech situations which were discarded by the market in May on inflation concerns.”
5. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 73
Generation Investment Management’s Stake Value: $773,377,000
Palo Alto Networks, Inc. (NASDAQ:PANW), an American tech and cybersecurity company, saw growth in the number of hedge funds having stakes in it. In Q3, 73 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 69 in the previous quarter. These stakes hold a consolidated value of roughly $5.9 billion.
Recently, Mizuho listed Palo Alto Networks, Inc. (NASDAQ:PANW) as one of its top picks for 2022 due to the company’s growing role in digital transformation. The firm set a $625 price target on the stock while maintaining a Buy rating on the shares. After reporting solid fiscal Q1 results, Palo Alto Networks, Inc. (NASDAQ:PANW) lifted its guidance for the fiscal year 2022 due to the growth in security demand. The company now expects revenue in the range of $5.35 billion to $5.4 billion.
Generation Investment Management started investing in Palo Alto Networks, Inc. (NASDAQ:PANW) during the first quarter of 2020. In Q3, the hedge fund holds a stake worth $773.3 million in the company, which accounted for 3.23% of Al Gore’s portfolio. As of the close of December 20, Palo Alto Networks, Inc. (NASDAQ:PANW) is up 50.2% for 2021.
4. Gartner, Inc. (NYSE:IT)
Number of Hedge Fund Holders: 33
Generation Investment Management’s Stake Value: $856,927,000
Gartner, Inc. (NYSE:IT) is an American technology research organization. The company reported solid Q3 earnings, posting revenue of $1.2 billion, up 20.6% from the prior-year quarter. In the past two years, Gartner, Inc. (NYSE:IT) has beaten revenue estimates 100% of the time.
Generation Investment Management holds 2.8 million shares in Gartner, Inc. (NYSE:IT) in Q3, worth roughly $857 million. The company constituted 3.56% of Al Gore’s portfolio. Appreciating the company’s strong organic growth and Q3 earnings beat, both Baird and BMO Capital raised their price targets on Gartner, Inc. (NYSE:IT) to $375 and $339, respectively.
As of Q3 2021, 33 hedge funds in Insider Monkey’s database held stakes in Gartner, Inc. (NYSE:IT), down from 39 in the previous quarter. These stakes hold a value of over $2 billion. Apart from Generation Investments, Alkeon Capital Management was also one of the company’s most prominent shareholders in Q3, owning over 1.2 million shares.
Saturna Capital mentioned Gartner, Inc. (NYSE:IT) in its recently-published Q3 2021 investor letter. Here is what the firm has to say:
“Gartner has had a tremendous year, appreciating just shy of 90% through the first three quarters. Gartner provides IT research and advisory services, and the resumption of business activity has been a boon to its business. While the Delta variant continues to affect in-person events, investors are looking ahead to a resumption of its conference business as well.”
3. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 63
Generation Investment Management’s Stake Value: $1,041,232,000
Cisco Systems, Inc. (NASDAQ:CSCO) was the fifth-largest holding of Generation Investment Management in Q3, as the hedge fund holds shares worth over $1 billion in the company. Cisco Systems, Inc. (NASDAQ:CSCO) constituted 4.32% of Al Gore’s portfolio.
As per Insider Monkey’s data for Q3, 63 hedge funds were bullish on Cisco Systems, Inc. (NASDAQ:CSCO), up from 60 in the previous quarter. The stakes hold a consolidated value of roughly $4 billion.
In fiscal Q1 2022, Cisco Systems, Inc. (NASDAQ:CSCO) posted an EPS of $0.82, beating consensus by $0.02. The company earned $12.9 billion in revenues, up 8.1% from the same period last year. Moreover, Cisco Systems, Inc. (NASDAQ:CSCO)’ annualized recurring revenue for the quarter stood at $21.6 billion, presenting a 10% year-over-year growth.
ClearBridge Investments mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q1 2021 investor letter. Here is what the firm has to say:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 242
Generation Investment Management’s Stake Value: $1,357,750,000
In Q3, Amazon.com, Inc. (NASDAQ:AMZN) accounted for 5.64% of Al Gore’s portfolio, representing shares worth $1.35 billion. Recently, UBS initiated its coverage on Amazon.com, Inc. (NASDAQ:AMZN) with a Buy rating and a $4,700 price target, highlighting the company’s importance in the U.S. internet sector. Since the beginning of the year, the stocks is up 4.69%, as of the close of December 20.
Ken Fisher’s Fisher Asset Management was one of the company’s largest shareholders in Q3, owning a stake worth $6.3 billion. Overall, of the 867 hedge funds tracked by Insider Monkey, 242 hedge funds held stakes in Amazon.com, Inc. (NASDAQ:AMZN) in Q3, down from 271 in the previous quarter. These stakes are valued at over $42.5 billion.
Davis Funds mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:
“E-commerce, online search and advertising, social media and software are another component of the portfolio that have proven, attractive businesses. The online portion of the Fund is currently dominated by such market leaders as Amazon.com. We are attracted to these names based on the size and rapid expansion of their market opportunities globally, their ability to generate and grow new revenue sources through constant innovation, ample operating leverage as they continue to scale and capable, focused, highly competitive leadership teams. If purchased at sensible prices, these types of businesses in our experience can contribute meaningfully to long-term results.”
1. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 156
Generation Investment Management’s Stake Value: $1,407,974,000
Alphabet Inc. (NASDAQ:GOOG) was the second-largest holding of Generation Investment Management in Q3 and represented 5.85% of the hedge fund’s 13F portfolio. The fund made its first investment in the company during the fourth quarter of 2018.
At the end of Q3 2021, 156 hedge funds tracked by Insider Monkey reported owning stakes in Alphabet Inc. (NASDAQ:GOOG), up from 155 in the previous quarter. The total value of these stakes is roughly $35 billion, compared with $33.7 billion in Q2.
Since the beginning of 2021, Alphabet Inc. (NASDAQ:GOOG) delivered a 64.1% return to shareholders, while the stock surged 63.05% in the past year, as of the close of December 20. Recently, Tigress Financial lifted its price target on Alphabet Inc. (NASDAQ:GOOG) to $3,540, with a Strong Buy rating on the shares, appreciating the company’s increased focus on artificial intelligence.
Saturna Capital mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter. Here is what the firm has to say:
“Alphabet was a new addition to the Fund this year, as we believed it important to have exposure to the top online media and advertising company in the world. Some have raised concerns surrounding Alphabet’s exposure to political interference, but we take comfort from the belief that were the company to be broken up, it would quite likely be worth even more than as a single entity.”
You can also take a look at 10 Best Tech Stocks To Buy Now According To Billionaire Laffont and 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin
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Disclosure. None. 10 Tech Stocks to Buy According to Former VP Al Gore is originally published on Insider Monkey.
