In this article, we will discuss billionaire Ray Dalio’s top 10 technology stock picks. If you want to explore similar stocks, you can also take a look at Billionaire Ray Dalio’s Top 5 Technology Stock Picks.
Ray Dalio is an American billionaire investor, former hedge fund manager, and philanthropist. He is the founder of Bridgewater Associates, a Connecticut-based hedge fund with over $126 billion in assets under management. Bridgewater Associates is made up of three hedge funds: The flagship Pure Alpha fund, the All Weather fund, and the Pure Alpha Major Markets fund. According to an article by The New York Times, Ray Dalio is stepping down from his role as hedge fund manager of Bridgewater Associates after 47 years. Ray Dalio is being succeeded by co-CEOs of Bridgewater Associates Nir Bar Dea and Mark Bertolini and will continue to serve as the Chief Investment Officer of Bridgewater Associates. According to the article, Bridgewater Associates’ flagship fund, Pure Alpha, is up 35% year to date and is outperforming all major market indices.
Ray Dalio’s Macro Analysis
On October 12, Ray Dalio appeared in an interview on Bloomberg where he discussed the current macroeconomic trends. According to Mr. Dalio, we will not be having a “sustainable interest rate that is going to be a real adequate interest rate”, and so he is steering clear of debt instruments. Mr. Dalio said that according to his analysis and estimates, the interest rate that will equalize the inflation rate sits between 4% and 5% and that brings the “real bond yield” to “four and a half percent” and “the economy cannot take an interest rate much higher than that before it is going to be negative”.
Bridgewater Associates’ Stock Portfolio
In the third quarter of 2022, Bridgewater Associates increased its exposure to 300 previously held positions, reduced its stakes in 498 securities, initiated 61 new positions, and exited 180 positions. As of September 30, Bridgewater Associates has a portfolio value of $19.75 billion. This article will look at some of Ray Dalio’s top technology stock picks, which include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG).
Our Methodology
To determine Ray Dalio’s top technology stock picks, we scoured Bridgewater Associates’ 13F portfolio which was updated at the close of the third quarter of 2022. We picked tech stocks that ranked among the fund’s top 13F holdings and arranged them according to Bridgewater Associates’ stake value in them, from least to most.
Billionaire Ray Dalio’s Top 10 Technology Stock Picks
10. Accenture Plc (NYSE:ACN)
Bridgewater Associates’ Stake Value: 29,284,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.14%
Accenture Plc (NYSE:ACN) is a professional services company that provides strategy, consulting, technology, and operations services. It has been in business since 1989 and is headquartered in Dublin, Ireland. On September 22, Accenture Plc (NYSE:ACN) posted earnings for the fourth quarter of fiscal 2022. The company generated a revenue of $15.42 billion and beat revenue estimates by $18.32 million. Accenture Plc (NASDAQ:ACN) reported an EPS of $2.60 and outperformed Wall Street consensus by $0.03.
Shortly after the company’s earnings release, Citi analyst Ashwin Shirvaikar revised his price target on Accenture Plc (NYSE:ACN) to $305 from $315 and reiterated a Buy rating on the shares. On October 14, JPMorgan analyst Tien-tsin Huang updated his price target on Accenture Plc (NYSE:ACN) to $306 from $329 and maintained an Overweight rating on the shares.
As of November 14, Accenture Plc (NYSE:ACN) is offering a forward dividend yield of 1.54% and has free cash flows of $8.82 billion. At the close of Q3 2022, Bridgewater Associates held a position worth $29.28 million in Accenture Plc (NYSE:ACN). The stock is one of Ray Dalio’s top technology stock picks.
Here is what Distillate Capital Partners LLC had to say about Accenture plc (NYSE:ACN) in its third-quarter 2022 investor letter:
“The largest new purchases includes Accenture plc (NYSE:ACN). Accenture modestly lagged the market last quarter and became similarly attractive enough to warrant ownership. Similar to our prior presentations, one way to visualize the current portfolio and note recent changes versus the benchmark is to look at scatter plot of all of Distillate’s FSV holdings versus those in the benchmark with valuation on the vertical axis and free cash cow stability on the horizontal axis.”
In addition to Accenture Plc (NYSE:ACN), other large-cap tech companies that Bridgewater Associates is heavily invested in include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG).
9. Micron Technology, Inc. (NASDAQ:MU)
Bridgewater Associates’ Stake Value: $28,866,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.14%
Micron Technology, Inc. (NASDAQ:MU) is a leading provider of semiconductor solutions. The company has a strong market position and is well-positioned to continue to grow and gain market share. As of November 14, Micron Technology, Inc. (NASDAQ:MU) is trading at a PE multiple of 8x and is offering a forward dividend yield of 0.76%. Micron Technology, Inc. (NASDAQ:MU) has free cash flows of $3.1 billion. As of September 30, Bridgewater Associates has stakes worth $28.8 million in Micron Technology, Inc. (NASDAQ:MU).
On September 29, Micron Technology, Inc. (NASDAQ:MU) announced earnings for the fiscal fourth quarter of 2022. Micron Technology, Inc. (NASDAQ:MU) generated revenue of $6.64 billion and reported earnings per share of $1.45, outperforming estimates by $0.08. On November 10, Micron Technology, Inc. (NASDAQ:MU) announced the commercial availability of DDR5 memory which is compatible with the new AMD EPYC 9004 Series processors.
On October 13, Loop Capital analyst Charles Park took coverage of Micron Technology, Inc. (NASDAQ:MU) with a Buy rating and a $70 price target.
Here is what Claret Asset Management had to say about Micron Technology, Inc. (NASDAQ:MU) in its third-quarter 2022 investor letter:
“Inflation is still higher than interest rates… not an incentive to save for most people. Either inflation must come down or interest rates have to go up further. Or both. And probably both. Now that they are taking the punch bowl away and the party is over, what happens next? For whatever reason, the stock market seems to always precede the economic reality: Micron reached a high of $98.45 on January 5th, 2022 and is trading at $50.00 today.”
8. Apple Inc. (NASDAQ:AAPL)
Bridgewater Associates’ Stake Value: $38,227,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.19%
Apple Inc. (NASDAQ:AAPL) is one of the most innovative companies in the world and has a history of creating revolutionary products that have changed the way we live. The iPhone, iPad, and iMac are just a few examples of its game-changing products. The company has a strong balance sheet with over $111.4 billion in free cash flows and is well-positioned to continue its incredible run of success in the years to come.
On November 14, JPMorgan analyst Samik Chatterjee maintained an Overweight rating and his $200 price target on Apple Inc. (NASDAQ:AAPL).
On October 27, Apple Inc. (NASDAQ:AAPL) reported strong earnings for the fiscal fourth quarter of 2022. The company reported an EPS of $1.29 and beat estimates by $0.02. The company generated a revenue of $90.15 billion and outperformed Wall Street expectations by $1.37 billion. As of September 30, Bridgewater Associates has a position worth $38.2 million in Apple Inc. (NASDAQ:AAPL), and the stock is ranked among Ray Dalio’s top tech stock picks.
Here is what Wedgewood Partners had to say about Apple Inc. (NASDAQ:AAPL) in its third-quarter 2022 investor letter:
“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
7. Cisco Systems, Inc. (NASDAQ:CSCO)
Bridgewater Associates’ Stake Value: $39,491,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.19%
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading provider of networking equipment and software. The company has a strong market position and a diversified product portfolio. Cisco Systems, Inc. (NASDAQ:CSCO) is well-positioned to benefit from the continued growth of the Internet and the rise of cloud computing. Cisco Systems, Inc. (NASDAQ:CSCO) is a cash-rich company with a strong balance sheet and low debt levels. The company has free cash flows of $12.74 billion and a debt-to-equity ratio of 0.23.
This November, Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and his $56 price target on Cisco Systems, Inc. (NASDAQ:CSCO) and added the stock to Evercore ISI’s “Tactical Outperform” list. As of September 30, Bridgewater Associates has a stake of $39.4 million in Cisco Systems, Inc. (NASDAQ:CSCO) and the investment accounts for 0.19% of the fund’s 13F portfolio.
On October 12, Cisco Systems, Inc. (NASDAQ:CSCO) announced a strategic collaboration with Microsoft Corporation (NASDAQ:MSFT) to offer Microsoft Teams compatibility for Cisco Room and Desk devices, starting from the first half of 2023.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Bridgewater Associates’ Stake Value: $45,791,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.23%
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company that offers a broad range of innovative products, including microprocessors, GPUs, and server accelerators among other hardware products. The company has a strong history of technology leadership and is committed to delivering the best possible computing experience to its customers. The company’s products are used in a wide range of applications, including gaming, computing, and virtual reality.
On November 14, Baird analyst Tristan Gerra upgraded Advanced Micro Devices, Inc. (NASDAQ:AMD) to Outperform from Neutral and raised his price target on the shares to $100 from $65. This November, UBS analyst Timothy Arcuri raised his price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) and upgraded the stock to Buy from Neutral.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a strong competitor in the market for high-performance GPUs, and its products are used by some of the world’s largest tech companies. The company has a strong R&D team and a commitment to innovation, which gives it a competitive advantage in the semiconductor market. The company has free cash flows of $3.40 billion and is ranked among Ray Dalio’s top tech stock picks. As of September 30, Bridgewater Associates holds a position worth $45.7 million in Advanced Micro Devices, Inc. (NASDAQ:AMD).
Here is what Baron Funds had to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 2022 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
Some of Ray Dalio’s top technology stock picks include big tech names such as Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG).
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Disclosure: None. Billionaire Ray Dalio’s Top 10 Technology Stock Picks is originally published on Insider Monkey.
