In this article, we discuss 5 tech stocks other than Palantir Technologies (PLTR) that hedge funds are selling. To take a look at some more tech stocks that hedge funds have been offloading in the past few months, go directly to Hedge Funds Are Selling Palantir Technologies (PLTR) and 9 Other Tech Stocks.
5. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders in Q4 2021: 80
Number of Hedge Fund Holders in Q3 2021: 96
Twilio Inc. (NYSE:TWLO) owns and runs a cloud communications platform. Despite hedge funds offloading the stock, it remains a top cloud pick on Wall Street. Among the hedge funds being tracked by Insider Monkey, California-based investment firm SCGE Management is a leading shareholder in Twilio Inc. (NYSE: TWLO), with 2 million shares worth more than $539 million.
On February 10, Monness analyst Brian White noted that the profit challenges for Twilio Inc. (NYSE:TWLO) were worsening despite a better-than-expected performance in earnings for the fourth quarter of 2021. The analyst cautioned that the magnitude of the loss guidance of the firm was “extraordinary” and “key metrics” were deteriorating. He kept a Neutral rating on the stock, with no price target.
In its Q3 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Twilio Inc. (NYSE:TWLO) was one of them. Here is what the fund said:
“Twilio Inc. (NYSE:TWLO) shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
