In this piece, we will take a look at the ten most popular technology stocks among billionaires. If you want to skip our analysis of the technology industry and how it continues to surprise, then take a look at 5 Most Popular Technology Stocks Among Billionaires.
When it comes to the stock market, technology has been its savior in 2023. The year kicked off with investors fretting about an impending recession in America and the impact of high interest rates on the economy and the stock market. Higher rates aren't good for the economy, the market, or technology, and the outlook for 2023 was dour, especially since the bloodbath of 2022 that had caused triple digit percentage losses for big ticket names.
Enter A.I. While investors were fretting about interest rates, artificial intelligence was slowly gearing up to take the world by storm. Microsoft Corporation (NASDAQ:MSFT) backed OpenAI released its ChatGPT chatbot, whose ability to generate life like answers stunned both regular people and seasoned technology hands like Bill Gates. As it appeared that artificial intelligence is now ready to play a regular part in our lives, Wall Street aimed its guns at sectors that would benefit from it.
At the heart of investor attention was the semiconductor sector. ChatGPT is trained and powered by products from NVIDIA Corporation (NASDAQ:NVDA) - the world's premier graphics processing unit (GPU) designer. NVIDIA's shares - and its financials - are now completely transformed from where they were a year ago. For instance, consider its share price growth and market capitalization in 2023. Year to date, the shares are up by 225%, and NVIDIA is now officially part of the trillion dollar club with a market capitalization of $1.2 trillion.
Its revenue during the latest fiscal quarter sat at $18.1 billion, which is simply unbelievable considering that during its fiscal year 2021, NVIDIA had raked in $16.6 billion. So, courtesy of A.I., NVIDIA earned more money during the three months ending in October 2023 than it had during the 12 months ending in January 2021. Of course back then it was reeling from a global supply slowdown in the wake of the coronavirus pandemic and was yet to capitalize on the greater demand for technology products that the pandemic had ushered in. Similarly, NVIDIA is far from done, as its trailing twelve month revenue is $44.8 billion - marking a 66% growth over its latest fiscal quarter revenue.
NVIDIA's meteoric rise is also mirrored by the broader semiconductor industry. The PHLX Semiconductor (^SOX) index, a collection of the 30 biggest semiconductor firms in America, is up by a whopping 49% year to date.
At the same time, even as NVIDIA is the market's A.I. darling, other semiconductor technology companies are also introducing their products. The latest such announcement came from NVIDIA's smaller rival in the GPU market, Advanced Micro Devices, Inc. (NASDAQ:AMD). Unlike NVIDIA, AMD also holds a license to make and sell x86 central processing unit (CPU) microprocessors. x86 products have been the backbone of personal computing, and AMD's Advancing AI event held in December 2023 saw it introduce a full package of A.I. products, ranging from CPUs, to GPUs, and field programmable gate arrays (FPGA). The event was particularly notable for the firm's total addressable market (TAM) estimates for A.I. accelerators.
TAM is a crucial component of financial statement modeling as it enables analysts to determine a firm's future cash flows by trying to estimate its market share. At the event, AMD's CEO Dr. Lisa Su shared that a year ago the firm had estimated the total A.I. accelerator TAM to sit at $150 billion in 2027 on the back of a compounded annual growth rate (CAGR) of 50% from its 2023 value of $30 billion. But She outlined that after taking a look at the market adoption of A.I. products, AMD now believes that the market is worth $45 billion in 2023 and will grow at a CAGR of 70% to be worth $400 billion by 2027.
Since A.I. and semiconductors are the hottest topics in the finance industry right now, here's what Fisher Investments' senior vice president Aaron Anderson had to say to Reuters' Elena Casas in a recent talk:
Across the board for lots of different A.I. related companies, but certainly within semiconductors you've seen valuations expand. Although I will say you've seen growth pickup quite a big. Most of that valuation expansion has happened in the high end of semiconductor products. It's the fabless producers, and so forth, the designers for extremely in demand A.I. chips right now. And I think that by some measure they look expensive. You look at P/E ratios of some of the most prominent A.I. chip producers. You look a few years out, given what growth is projected to be, they don't look extremely expensive. Now you look at things such as price to sales and so forth, there maybe you could argue, there is a lot of optimism baked into them. But I think the fundamental tailwinds are real and a lot of these companies have got moats that are going to be very hard to compete with for coming years. So I do think higher valuations are warranted, I do think a lot of the optimism tied today in this sector is warranted. I do worry a little bit in some areas that some of the A.I. hyperscaling is ahead of itself.
With these details in mind, let's take a look at the top technology stocks that billionaires are piling into. Some notable names are Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN).
Most Popular Technology Stocks Among Billionaires
An overhead view of a bustling stock exchange, highlighting the company's presence in the financial markets.
Our Methodology
To compile our list of the top technology stocks that billionaires are buying, we studied Q3 2023 hedge fund filings and picked out the top stocks that billionaire hedge fund bosses are buying.
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese technology conglomerate headquartered in Hangzhou, China. Its artificial intelligence and cloud computing plans suffered a setback in December 2023 when the firm canceled a plan to spin off its cloud division, citing U.S. chip export controls.
By the end of Q3 2023, 110 out of the 910 hedge funds profiled by Insider Monkey had bought and owned Alibaba Group Holding Limited (NYSE:BABA)'s shares. Ken Fisher's Fisher Asset Management was the largest shareholder as it owned a $334 million stake.
Along with Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA) is a top billionaire technology stock pick.
Uber Technologies, Inc. (NYSE:UBER) is a ride sharing platform provider headquartered in San Francisco, California. December is an important month for the firm and its stock as it is set to join the illustrious S&P 500 index.
During this year's third quarter, 146 out of the 910 hedge funds part of Insider Monkey's database had invested in the company. Uber Technologies, Inc. (NYSE:UBER)'s biggest hedge fund investor is Brad Gerstner's Altimeter Capital Management due to its $613 million investment.
Mastercard Incorporated (NYSE:MA) is an American company that provides digital payment technologies and products. The firm is doing well on the financial front lately as it has beaten analyst EPS estimates for all four of its latest quarters. To boot, the stock is rated Strong Buy on average and analysts have set an average share price target of $447.91.
Insider Monkey's September quarter of 2023 research covering 910 hedge funds revealed that 23 had invested in Mastercard Incorporated (NYSE:MA)'s shares. Charles Akre's Akre Capital Management owned the largest stake among these as it owned 5.8 million shares that are worth $2.3 billion.
Salesforce, Inc. (NYSE:CRM) is a technology company that enables businesses to manage their customer interactions and relationships. Despite a broader economic slowdown in a high rate era, the firm has weathered the storm and beaten analyst EPS estimates in all four of its latest quarters. Its third quarter results impressed investors and led to a 10% share price growth, especially as Salesforce, Inc. (NYSE:CRM) announced a key A.I. partnership with Amazon.
Insider Monkey scoured through 910 hedge fund portfolios for their third quarter of 2023 shareholdings to discover that 122 had owned a stake in the company. Out of these, the biggest shareholder was Ken Fisher's Fisher Asset Management courtesy of its $2.8 billion stake.
Visa Inc. (NYSE:V) is the second financial technology and payments platform provider on our list of the tech stocks most popular among billionaires. Like Mastercard, it has also beaten analyst EPS estimates in all of its four latest quarters and the shares are rated Strong Buy on average.
As of Q3 2023, 167 out of the 910 hedge funds covered by Insider Monkey's research had invested in Visa Inc. (NYSE:V). Chris Hohn's TCI Fund Management was the largest investor due to its $3.8 billion investment.
Alphabet Inc. (NASDAQ:GOOGL), Visa Inc. (NYSE:V), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) are some top technology stocks on the billionaire radar.
