In this article, we discuss the top 10 stock picks of Jim Simons’ 2022 portfolio.
Jim Simons founded Renaissance Technologies in 1978, and is often referred to as ‘the most successful hedge fund manager of all time’. The 84 year old has a long and illustrious career on Wall Street and beyond, initially starting his journey as a mathematics genius. He received a Bachelor’s degree from MIT in 1958, and a PhD in mathematics from the University of California, Berkeley at the age of 23. His hedge fund utilizes quantitative, mathematical models and algorithms to make investments that benefit from market inefficiencies. It runs three funds that are open to the public, namely the Renaissance Institutional Equities Fund (RIEF), Renaissance Institutional Diversified Alpha (RIDA) and Renaissance Institutional Diversified Global Equity Fund. But its star performer is the Medallion Fund, which is only open to the fund’s employees and their family members. It has averaged net returns of 39.1% from the period between 1988 and 2018, earning over $100 billion in profits.
In January 2022, Bloomberg reported that Renaissance Technologies had seen outflows of nearly $15 billion in the previous 14 months, a trend which started with the fund’s poor performance in 2020. This was because the Medallion Fund, not available for public investors, returned 76% in the year, while the three public funds posted losses of 19%, 31%, and 31%. The discrepancy led investors to slowly pull their money out of Simons’ fund, and its current portfolio stands at $85.21 billion as of the first quarter of 2022, down from $92 billion as of December 2020. The billionaire recently added 828 new stocks to his portfolio, made additional purchases in 1,564, whilst selling off 656 stocks and reducing stakes in 1,631 equities. The fund’s top 10 holdings represent 12.02% of its total portfolio, which includes big names such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Tesla, Inc. (NASDAQ:TSLA), along with others mentioned below.
Our Methodology
Jim Simons’ portfolio for Q1 2022 was used to examine his top 10 holdings. Hedge fund sentiment around each stock has been mentioned in order to give our readers a fuller picture for their investment decisions. It has been derived from the database of Insider Monkey which tracks more than 900 elite hedge funds and their holdings.
Jim Simons’ Portfolio in 2022: Top 10 Stock Picks
10. Amazon.com, Inc. (NASDAQ:AMZN)
Renaissance Technologies’ Stake Value: $674.98 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 279
Amazon.com, Inc. was billionaire Jim Simons’ 10th largest holding in the first quarter of 2022, with 207,000 shares worth roughly $675 million. This represented a jump of 41% in stake over the previous quarter where Renaissance Technologies held roughly 148,000 shares of Amazon.
On the back of rising inflation and interest rates hike, the tech sector has seen a major sell-off. Amazon.com, Inc. has slumped 36.86% in the year to date, losing $1,256 in value as of May 20. With weakening consumer demand, Amazon.com, Inc. posted -$7.56 in EPS for the first quarter, missing estimates by $16.05. It posted quarterly revenue of $116.5 billion, underperforming estimates by $67.1 million.
On April 29, Truist analyst Youssef Squali maintained a ‘Buy’ rating on Amazon.com, Inc. shares, but reduced the price target to $3,500 from $4,000, on the back of emerging cost pressures and normalizing e-commerce demand which the analyst thinks will put the company in a “rough patch” in Q2. However, he remains positive on the company shares given the strong growth in Amazon Web Services and Advertising, as well as the prospects for inflationary pressure.
Amazon.com, Inc. was the most popular stock holding of the 929 elite hedge funds tracked by Insider Monkey at the end of the fourth quarter of 2021, with 279 bullish bets on the company shares. The combined value of these positions stood at $49.16 billion.
Baron Funds, an investment firm, highlighted a few stocks in its Q1 2022 investor letter and Amazon.com, Inc. was one of them. Here’s what the fund said:
“Jeff Bezos sums up the current market behavior well in his 2000 shareholder letter where he quoted Benjamin Graham’s famous statement that, in the short term, a stock market is a voting machine, while in the long term, it is a weighing machine, saying that Amazon (NASDAQ:AMZN) is a “company that wants to be weighed, and over time we will be – over the long term, all companies are. In the meantime, we have our heads down working to build a heavier and heavier company.”
We have a lot of conviction that our businesses are doing the same – working to build heavier and heavier companies.”
Along with Apple Inc., Amazon.com, Inc., and Tesla, Inc., Amazon.com, Inc. is a prominent stock in the portfolio of billionaire Jim Simons.
9. Zoom Video Communications, Inc. (NASDAQ:ZM)
Renaissance Technologies’ Stake Value: $756.08 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 48
Zoom Video Communications, Inc. (NASDAQ:ZM) is an online communications platform which provides video conference calling services. It soared 640% in the 10 months between January and October 2020, reaching all-time highs of $559 per share as the Covid pandemic increased demand for its video-calling platform. Renaissance Technologies held a $756 million stake in Zoom Video Communications, Inc. in the first quarter, comprising of 6.44 million shares and representing 0.88% of the fund’s total portfolio.
On May 16, Citi analyst Tyler Radke lowered the firm’s price target on Zoom Video Communications, Inc. to $118 from $139 and reiterated a ‘Neutral’ rating on the shares. The analyst has grown more cautious of the firm’s landscape based on inputs from partners and customers, and sees competitive headwinds limiting further upside to the company shares.
Zoom’s largest Q1 shareholder was long-time investor Cathie Wood, with her ARK Investment Management holding a $986.4 million stake.
Artisan Partners, an investment firm, talked about Zoom Video Communications, Inc. in its Q1 2021 investor letter. Here’s what the fund said:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
8. Atlassian Corporation Plc (NASDAQ:TEAM)
Renaissance Technologies’ Stake Value: $776.86 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 69
Atlassian Corporation Plc (NASDAQ:TEAM) is a software company based in Australia which offers various software products including JIRA, a workflow management platform, and others such as Atlassian Marketplace, Confluence, Bamboo, Bitbucket, and Trello. Shares of the company represented 0.91% of Jim Simons’ Q1 2022 portfolio, with 2.64 million shares worth $776.9 million. This made Renaissance Technologies the largest shareholder of Atlassian Corporation Plc in the first quarter of 2022.
Mizuho analyst Gregg Moskowitz on May 16 maintained a ‘Buy’ rating on Atlassian Corporation Plc shares, and reduced the price target to $360 from $500. The analyst believes that the firm will benefit from good customer demand and its strategic actions which will drive overall monetization and cloud adoption. He attributed his price target reduction to the recent contraction in comp multiples.
Investors were seen buying into Atlassian Corporation Plc at the close of the fourth quarter of 2021, with 69 hedge funds long on the company shares as compared to 60 in the preceding quarter.
For the first quarter, Atlassian Corporation Plc’s (NASDAQ:TEAM) earnings per share stood at $0.47, exceeding analysts’ estimates by $0.15. Quarterly revenue of $740.5 million grew 30.2% from the year-ago quarter, and also beat consensus estimates by $36.6 million.
Here is what ClearBridge Investments had to say about the market position of Atlassian Corporation Plc in its Q1 2022 investor letter:
“The structural bucket has the shortest investment horizon across the spectrum of growth companies we target in the Strategy. We closely monitor the macro impacts and turnaround progress of these companies and will be disciplined sellers when the thesis for a holding plays out. We also trimmed back workflow software maker Atlassian after a strong runup in its shares in 2021. Most of our reductions in emerging growth have involved IT or related companies where innovation is a key to their business model. That said, we remain positive on the IT sector and have largely maintained holdings in our highest-conviction ideas.”
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Renaissance Technologies’ Stake Value: $777.11 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.91%
Number of Hedge Fund Holders: 69
Jim Simons’ Renaissance Technologies initiated a $777 million position in Advanced Micro Devices, Inc. (NASDAQ:AMD) in the first quarter of 2022, representing 0.91% of its total portfolio. The California-based semiconductor firm develops processing chips and graphic cards for a range of computer devices around the world. Shares of Advanced Micro Devices, Inc. have dropped 37.77% year to date owing to supply chain disruptions and interest rate hikes in the United States.
Reporting its first quarter earnings on May 3, Advanced Micro Devices, Inc. posted EPS of $1.13, which was above estimates by $0.20. The company raked in $5.89 billion in revenue for the quarter, which represented an increase of 70.9% over the same period last year, and outperformed estimates by $313.4 million.
Piper Sandler analyst Harsh Kumar on May 17 upgraded Advanced Micro Devices, Inc. to ‘Overweight’ from ‘Neutral’, and also increased the price target to $140 from $98. Kumar notes that the firm’s mid-to-long-term catalysts remain intact amid strong server trends, strong semi-custom trends, and growth in commercial PCs offsetting weakness in consumer PCs. He urged investors to “buy good companies when they are down”.
At the end of the fourth quarter, 69 hedge funds were long Advanced Micro Devices, Inc. shares, with combined positions worth $6.74 billion. This shows a positive trend over the previous quarter where 65 hedge funds held $5.25 billion worth of positions in the company.
Carillon Tower Advisers, an investment firm, discussed the prospects of Advanced Micro Devices, Inc. in its Q4 2021 investor letter. Here’s what the fund said:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
6. Apple Inc. (NASDAQ:AAPL)
Renaissance Technologies’ Stake Value: $786.47 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.92%
Number of Hedge Fund Holders: 134
Jim Simons increased his position in Apple Inc. by 69% in the first quarter of 2022. The billionaire held 4.5 million shares of the iPhone-maker at value of $786 million, up from 2.67 million shares in the previous quarter.
Deutsche Bank analyst Sidney Ho in late April kept a ‘Buy’ rating on Apple Inc. shares, and reduced the price target to $200 from $210. She noted that the firm’s latest quarterly results signaled an uptick in demand for its products and services, although uncertainty in China led to increased supply-chain issues. She views the firm as a “high-quality” name in the market, and believes its premium valuation in comparison to tech hardware peers is justified.
Apple Inc. posted EPS of $1.52 for the first quarter, beating consensus estimates by $0.09. The company’s revenue for the quarter was recorded at $97.3 billion, and outperformed estimates by $3.3 billion.
The largest shareholder of the firm during the first quarter was long-time investor Warren Buffet, whose Berkshire Hathaway held a $155.6 billion stake in Apple Inc. which represented 42.78% of the fund’s total portfolio. 134 hedge funds held positions in the firm at the close of the fourth quarter, as compared to 120 hedge funds in the preceding quarter.
ClearBridge Investments, an investment firm, mentioned many stocks in its Q4 2021 investor letter, and Apple Inc. was one of them. The fund said:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
Just like Amazon.com, Inc., and Tesla, Inc., Apple Inc. is an exciting stock featuring the portfolio of quant billionaire Jim Simons.
5. Verisign, Inc. (NASDAQ:VRSN)
Renaissance Technologies’ Stake Value: $893.53 million
Percentage of Renaissance Technologies’ 13F Portfolio: 1.04%
Number of Hedge Fund Holders: 34
Verisign, Inc. (NASDAQ:VRSN) deals in the provision of domain name registry and internet infrastructure services. On April 29, Baird analyst Rob Oliver downgraded Verisign, Inc. to ‘Neutral’ from ‘Outperform’, and reduced the price target to $210 from $260. The analyst expects “sudden domain uncertainty” weighing on the shares, as the company lowered its FY2022 estimates owing to a softening of demand after the Covid-related surge in recent months, and an incremental weakness in the macro setup.
Billionaire Jim Simons owned 4.01 million shares of Verisign, Inc. worth $893.5 million in the first quarter of 2022, making him the firm’s second largest shareholder after Warren Buffett’s Berkshire Hathaway. Out of all the hedge funds tracked by Insider Monkey, 34 reported ownership of stakes in Verisign, Inc. at the end of the fourth quarter. This showed a downward trend from the preceding quarter where 40 hedge funds were long on the company shares.
In the first quarter of 2022, Verisign, Inc. beat market estimates on EPS by $0.05. Quarterly revenue of $346.9 million was also above consensus estimates by $3.97 million.
Here is what investment firm Baron Funds had to say about the prospects of Verisign, Inc. in its Q4 2021 investor letter:
“Verisign, Inc. provides internet infrastructure services worldwide and is best known for its exclusive role managing the .com and .net domains, for which it receives annual fees from all those domain owners. Shares of Verisign gained after reporting strong revenue growth and operating margins that exceeded Wall Street forecasts. We continue to be positive on Verisign’s business, based on its strong competitive position, capacity for global growth in domain names, and its ongoing ability to generate substantial free cash flow.”
4. Gilead Sciences, Inc. (NASDAQ:GILD)
Renaissance Technologies’ Stake Value: $921.00 million
Percentage of Renaissance Technologies’ 13F Portfolio: 1.08%
Number of Hedge Fund Holders: 54
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical firm based in California. It posted earnings per share of $2.12 for the first quarter, beating estimates by $0.31. Its revenue for Q1 stood at $6.59 billion, which was above estimates by $309.4 million. The firm has grown its dividend yield for 6 years in a row, and offers an impressive yield of 4.57% as of May 20.
On May 16, Piper Sandler analyst Do Kim kept a ‘Neutral’ rating on Gilead Sciences, Inc. shares and decreased the firm’s price target to $69 from $73. The analyst expects the firm’s pipeline studies to resume in the next few weeks given that the FDA has lifted the clinical hold on enacapavir, allowing clinical studies to resume. Kim holds that the long-term opportunity around lenacapavir is intact.
54 hedge funds were long Gilead Sciences, Inc. at the close of the fourth quarter, up from 55 in the preceding quarter. The total value of Q4 hedge fund holdings stood at $2.36 billion. Arrowstreet Capital, with 18 million shares worth $1.07 billion, was the largest shareholder of the biopharmaceutical firm in the first quarter of 2022.
Here is what ClearBridge Investments had to say about Gilead Sciences, Inc. in its Q4 2021 investor letter:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
3. The Kroger Co. (NYSE:KR)
Renaissance Technologies’ Stake Value: $942.44 million
Percentage of Renaissance Technologies’ 13F Portfolio: 1.1%
Number of Hedge Fund Holders: 41
The Kroger Co. (NYSE:KR) is a retail giant based in the United States which operates a range of food and drug stores, multi-department stores, and warehouses. It offers its shareholder a solid dividend yield of 1.73% as of May 20, and has grown its yield for 16 years in a row.
Jim Simons’ owned 16.42 million shares of The Kroger Co. at a value of $942.44 million, amounting to a 1.1% slice of his total holdings. At the close of Q4 2021, 41 hedge funds were long on the company shares, compared to 39 in the previous quarter.
BofA analyst Robert Ohmes upgraded The Kroger Co. to ‘Buy’ from ‘Neutral’ on April 8, with a price target of $75, up from $61. The analyst notes that the firm’s market share trends could be improving, given broad-based inflation is driving consumers to retailers with more variety as individuals shift their consumption.
In March, The Kroger Co. announced a strategic partnership with NVIDIA (NASDAQ:NVDA) to “reimagine the shopping experience using AI-enabled applications and services.” The two firms will build an AI lab along with a demonstration centre to expand Kroger’s freshness initiatives, improve shipping logistics, and create a better shopping experience in stores through digital twin simulations.
2. Tesla, Inc. (NASDAQ:TSLA)
Renaissance Technologies’ Stake Value: $1.67 billion
Percentage of Renaissance Technologies’ 13F Portfolio: 1.96%
Number of Hedge Fund Holders: 91
Jim Simons’ Renaissance Technologies increased its stake in EV-maker Tesla, Inc. by 110% in the first quarter of 2022, coming in at 1.55 million shares valued at $1.67 billion. The company’s shares have lost 33.48% in the last month, as the market reacts nervously to founder Elon Musk’s $44 billion proposal to buy social media firm Twitter (NYSE:TWTR).
On May 19, Wedbush analyst Daniel Ives lowered the firm’s price target on Tesla, Inc. to $1,000 from $1,400, and kept an ‘Outperform’ rating on the company shares. The success of the firm’s demand and supply story in China underpins the analyst’s long-term bullish stance on the EV maker. However, the supply chain issues in China due to the Shanghai lockdowns have been “an epic disaster”, according to the analyst, who sees a slower growth trajectory for Tesla in the key market of China into the second half of the year.
Investors were seen piling into Tesla, Inc.. At the close of the fourth quarter of 2021, 91 hedge funds were long on the company shares, as opposed to 60 in the previous quarter. Cathie Wood was the largest shareholder of the firm in the first quarter of 2022, with her ARK Investment Management holding a $1.71 billion stake.
Quarterly revenue at the end of March was recorded at $18.76 billion, above estimates by $917.8 million. Tesla, Inc. posted EPS of $3.22 in the first quarter, beating analysts’ forecasts by $0.95.
Here is what investment firm Baron Funds had to say about Tesla, Inc. in its Q1 2022 investor letter:
“During the first quarter, we bought back shares in Tesla, Inc., which designs, manufactures, and sells electric vehicles, solar products, energy storage solutions, and batteries. We believe that despite the run in the stock over the last few years, Tesla presents a favorable risk/reward profile and remains a Big Idea with only about 1% market share of the automotive market. Since we bought the stock during the first quarter, shares increased 27.1%, despite a complex supply-chain environment, on continued revenue growth and record profitability. Robust demand and operational optimization allow the company to offset inflationary pressures while vertical integration provides flexibility around supply bottlenecks. Moreover, we expect new localized manufacturing capacity to drive additional efficiencies while software initiatives, including the autonomous driving program, are accelerating, offering valuable optionality to the stock.”
1. Novo Nordisk A/S (NYSE:NVO)
Renaissance Technologies’ Stake Value: $2.04 billion
Percentage of Renaissance Technologies’ 13F Portfolio: 2.39%
Number of Hedge Fund Holders: 28
Novo Nordisk A/S (NYSE:NVO) is a Danish biopharmaceutical firm which is the global market leader in insulin treatments used for diabetes. It was the largest holding in the Q1 2022 portfolio of Jim Simons, with 18.38 million shares worth more than $2 billion and representing 2.39% of the billionaire’s total portfolio.
On May 12, Barclays analyst Emmanuel Papadakis maintained an ‘Overweight’ rating on Novo Nordisk A/S shares, and increased the price target to DKK 875 from DKK 850. The company shares have soared in 31.88% in the last 12 months as of May 20, and its future prospects look compelling as diabetes becomes a more prevalent disease around the world.
For the first quarter, Novo Nordisk A/S reported earnings per share of $0.88, exceeding consensus estimates by $0.06. Its quarterly revenue of $6 billion also beat market estimates by $464.2 million, and increased 9.93% year-on-year.
Out of all the hedge funds tracked by Insider Monkey, 28 held positions in Novo Nordisk A/S at the close of Q4 2021 with a collective price tag of $4.43 billion. In contrast, 27 hedge funds held $4.05 billion worth of positions in the company a quarter ago.
Investment firm LRT Capital Management talked about Novo Nordisk A/S in its Q4 2021 investor letter. The fund said:
“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. Millions of people need daily injections of insulin to stay alive, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.
The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 22x forward earnings. For a company with an extremely predictable business, high returns on capital, and an easily forecastable future, we believe this to be highly attractive.”
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