We recently compiled a list of the Tiger Global’s 15 Long-Term Stock Picks. In this article, we are going to take a look at where CrowdStrike Holdings, Inc. (NASDAQ:CRWD) stands against the other stock picks.
Even as the venture capital efforts of Tiger Global Management come under increased scrutiny on the back of reportedly disappointing post-pandemic performance, the 13F portfolio of the fund seems to be performing exceedingly well to taper over these concerns. From the beginning of 2023 through to the end of the first quarter of 2024, the public long positions of the fund returned more than 80% to investors. These were dominated by prominent stakes in hyperscalers riding the AI boom. The rate of return posted by the fund was more than double the returns of the benchmark S&P 500 over the period. In contrast, a recent report by news publication Bloomberg reveals that the sixteenth private markets fund of Tiger Global, which set out with a target to raise more than $6 billion in funding back in 2022, closed with $2.2 billion in funding earlier this year. Tech news platform TechCrunch reports that the VC efforts of Tiger Global are suffering from a reputation of making bad bets during the pandemic.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Even though perfectly-timed bets on tech stocks are the claim to fame for Tiger Global in the past few years, a team from the fund recently noted in an investor letter that 30% of its exposure sits in businesses other than the AI-driven tech sector. Per the fund, these positions have roughly doubled over the last fifteen months with an 80% hit rate. Compared to these astute bets, the venture capital efforts of the company paint a grimmer picture. For example, a recent report by the California State Teachers’ Retirement System reveals that the paper losses on the fifteen private markets fund stood at more than 15% at the end of June 2024. This fund had raised more than $12.7 billion back in 2021 to invest in high growth areas. Data from PitchBook Benchmarks shows that the steep losses of this fund place it in the bottom 10% of all venture funds raised in 2021.
However, there is still time for some of these investments to bear fruit in the long term. The investment team at Tiger Global is certainly losing no sleep over these numbers. In a letter to investors, the fund has noted that the private holdings of the fund generated positive returns in the first quarter of 2024. This year, the VC arm of Tiger Global has invested in many prominent startups, including Waymo, OpenAI, Scale AI and Wiz. The Tiger Global team stressed in the letter that a meaningful portion of the private exposure of the public fund is concentrated in global market leaders who are performing well and awaiting attractive opportunities to go public. The team further added that it was also encouraged by the signs of life in the IPO market following relative dormancy over the last two years.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected stocks by combing through the 13F portfolio of Tiger Global Management at the end of the third quarter of 2024. Only the companies that have been in the 13F portfolio of the fund consistently for the past three years were selected. These stocks are also popular among other hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Security personnel at their consoles, monitoring a global network of threats in real-time.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Number of Hedge Fund Holders: 74
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) provides cloud-delivered protection across endpoints and cloud workloads, identity, and data. The company features on the list of long term stock picks of Tiger Global as it has consistently featured in the 13F portfolio of the fund since the second quarter of 2019. Tiger Global has steadily increased its stake in the company since then. Latest filings show that this stake comprised 900,000 shares at the end of the third quarter of 2024 worth over $252 million, representing 1.07% of the 13F portfolio.
There are several reasons why Tiger Global and Wall Street analysts like Adam Borg of Stifel, who recently raised the price target on the stock to $400 from $375 and kept a Buy rating on the shares, are bullish on CrowdStrike Holdings, Inc. (NASDAQ:CRWD). Some of these include premium growth metrics, high-value contracts, and strong client retention. CrowdStrike aims for $10 billion annual recurring revenue (ARR) by FY2031, tapping into a $250 billion AI-native cybersecurity market. In the third quarter of this year, this value surpassed $4 billion, growing 27% year-over-year with 115% net retention.
Overall CRWD ranks 7th on our list of Tiger Global Management’s long-term stock picks. While we acknowledge the potential of CRWD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRWD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.