In this article, we discuss the 5 tech stocks to buy before the market rally begins. If you want to read about some more tech stocks to buy before the market rally begins, go directly to 10 Tech Stocks to Buy Before Market Rally Begins.
5. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 66
Airbnb, Inc. (NASDAQ:ABNB) operates an online travel platform. In early August, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.56, beating analyst expectations by $0.13. The revenue over the period was $2.1 billion, up more than 56% compared to the revenue over the same period last year. The company revealed that the nights and experiences booked on the platform in the second quarter of 2022 were more than 103 million, up over 25% year-on-year.
On August 3, Needham analyst Bernie McTernan maintained a Buy rating on Airbnb, Inc. (NASDAQ:ABNB) stock and lowered the price target to $150 from $220, noting that the profitability of the firm was beating expectations and allowing for continued investment.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Airbnb, Inc. (NASDAQ:ABNB), with 3.3 million shares worth more than $575 million.
In its Q3 2021 investor letter, Tollymore Investment Partners, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund 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, Inc. (NASDAQ:ABNB) broke the link between staying in residential property and owning it. Airbnb, Inc. (NASDAQ:ABNB) 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.”
4. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) provides equipment, services, and software for the semiconductor industry. The company is well-positioned to gain in the second half of 2022 as the US lawmakers just approved the CHIPS Act, a legislation designed to pour hundreds of billions into the chip industry in the US to make it more competitive with China. Applied Materials, as one of the biggest such firms in the country, can thus expect a windfall of government investment in the coming months.
On July 18, Deutsche Bank analyst Sidney Ho maintained a Buy rating on Applied Materials, Inc. (NASDAQ:AMAT) stock and lowered the price target to $110 from $135, noting that wafer fab equipment demand might weaken in 2023.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in Applied Materials, Inc. (NASDAQ:AMAT), with 4.2 million shares worth more than $560 million.
3. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 76
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. Intel is planning a massive investment in Europe to set up chipmaking plants across the region. It is already close to a $5 billion deal with Italian authorities in this regard. This will help the firm increase footprint in Europe, one of the biggest chip markets in the world. Bank of America claims that the firm is also expected to be “the biggest beneficiary” of the CHIPS Act recently passed that will see a massive influx of government spending in the semiconductor sector.
On August 1, Northland analyst Gus Richard maintained an Outperform rating on Intel Corporation (NASDAQ:INTC) stock with a price target of $55, noting that the firm had a manufacturing capability that had strategic value for the US.
At the end of the first quarter of 2022, 76 hedge funds in the database of Insider Monkey held stakes worth $3.1 billion in Intel Corporation (NASDAQ:INTC), compared to 72 in the previous quarter worth $5.5 billion.
Baron Funds, an asset management firm, mentioned Intel Corporation (NASDAQ:INTC) in its first-quarter 2022 investor letter. Here is what they said:
“Intel Corporation (NASDAQ:INTC) capital spending process is guided by a process they appropriately named “copy exactly.” This means that they attempt to “copy exactly” what they have already built and attempt to improve tried and true processes iteratively.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a diversified technology company. On August 10, news agency Reuters reported that Google Fiber, the internet services platform of the tech giant Google, was planning to expand into five new states across the United States, the biggest expansion push in several years. These new states include Arizona, Colorado, Idaho, Nebraska, and Nevada. The firm has made the choice to expand in these new territories based on data about speed lags in these regions.
On August 3, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and raised the price target to $186 from $183, noting the resilience of the core cloud and search business of the firm despite misses on earnings.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.3 million shares worth more than $6.6 billion.
In its Q2 2022 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOG) grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 200
Meta Platforms, Inc. (NASDAQ:META) is a tech firm that owns and runs social media platforms. The company has transitioned from a focus on social media towards the metaverse in recent months, and Mark Zuckerberg, the founder of the firm, claims that it is now in a competition with Apple, the largest tech-giant, for relevance in the space. As part of an investment push into the metaverse, the company is considering its first ever bonds sale and a new capital spending structure. Ad-revenues are also slowly recovering after being hammered in the first half of 2022.
On July 28, MKM Partners analyst Rohit Kulkarni maintained a Buy rating on Meta Platforms, Inc. (NASDAQ:META) stock and lowered the price target to $240 from $295, noting that there was an ad environment slowdown from economic pressures for the firm.
At the end of the first quarter of 2022, 224 hedge funds in the database of Insider Monkey held stakes worth $19 billion in Meta Platforms, Inc. (NASDAQ:META), compared to 248 in the preceding quarter worth $31 billion.
In its Q4 2021 investor letter, Boyar Value Group, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:META) was one of them. Here is what the fund said:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms, Inc. (NASDAQ:META) (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
You can also take a peek at 10 Russell 2000 Basic Materials Dividend Stocks to Buy and 10 Utilities Stocks with Over 3% Dividend Yield.
