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In this article, we discuss 10 tech stocks to sell in 2022 according to billionaire Stanley Druckenmiller. If you want to see more tech stocks to sell according to the billionaire, click 5 Tech Stocks to Sell in 2022 According to Billionaire Stanley Druckenmiller.
Stanley Druckenmiller is an American billionaire hedge fund manager who founded Duquesne Capital in 1981, serving as its president and chairman till 2010. He closed the hedge fund for outside investors in 2010, and now runs Duquesne Capital as a family office. According to the 13F filings for the first fiscal quarter of 2022, the billionaire’s portfolio was worth $2.30 billion, compared to $2.75 billion in the last quarter of 2021.
Druckenmiller started his financial career as a management trainee at Pittsburgh National Bank in 1977. In just one year, he was promoted as the bank’s head of equity research group. In 1981, he established his own hedge fund, Duquesne Capital. In 1985, the billionaire began managing Dreyfus Fund, side by side with Duquesne Capital. Over his tenure, he has also had a lucrative partnership with George Soros at the Quantum Fund.
With a top ten holdings concentration of 74.44%, the hedge fund’s investment portfolio is focused on the materials, utilities and telecommunications, energy, information technology, finance, and consumer discretionary sectors. In Q1 2022, Stanley Druckenmiller’s hedge fund bought 18 new stocks, sold out of 16 securities, slashed stakes in 10 companies, and made additional purchases in 10 equities. Amid the broad technology sell-off, some of the major previously held tech stocks of Stanley Druckenmiller that did not make it to his portfolio in the first fiscal quarter of 2022 were Alphabet Inc. (NASDAQ:GOOG), Airbnb, Inc. (NASDAQ:ABNB), and SentinelOne, Inc. (NYSE:S), among others.
We used the Q1 2022 portfolio of billionaire Stanley Druckenmiller for this analysis, selecting the 10 technology stocks that he sold off in the first three months of 2022.
Tech Stocks to Sell in 2022 According to Billionaire Stanley Druckenmiller
10. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Billionaire Stanley Druckenmiller first invested in Alphabet Inc. (NASDAQ:GOOG) back in the last quarter of 2015. Druckenmiller remained largely consistent with his stake in the tech giant over the years, except for discarding it momentarily in Q2 2016, Q4 2016, and Q2 2019. In the fourth quarter of 2021, Duquesne Capital held 94,414 shares of Alphabet Inc. (NASDAQ:GOOG), worth $273.5 million. The stock which accounted for 9.91% of the total Q4 securities was discarded entirely by the billionaire in Q1 2022.
Credit Suisse analyst Stephen Ju lowered the price target on Alphabet Inc. (NASDAQ:GOOG) on April 21 to $3,450 from $3,500 and maintained an Outperform rating on the shares ahead of quarterly results. The analyst's surveys observe higher spend allocation across Google properties due to lingering IDFA-related headwinds, and while his FXN growth estimates remain unchanged, he believes Q1 results should exceed Street consensus.
On April 26, Alphabet Inc. (NASDAQ:GOOG) reported its financial results for the fiscal quarter of 2022. The company posted earnings per share of $24.62, falling short of analysts’ estimates by $0.93. The revenue grew about 23% year-over-year to $68.01 billion, topping market consensus by $124.63 million.
According to the Q4 database of Insider Monkey, 158 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 156 funds in the last quarter. In Q1 2022, Chris Hohn’s TCI Fund Management reported owning 2.3 million shares of Alphabet Inc. (NASDAQ:GOOG), worth $6.6 billion.
Here is what Farrer Wealth Advisors has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
9. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 56
Carvana Co. (NYSE:CVNA) is an Arizona-based company that operates an ecommerce platform for auctioning used cars in the United States. In addition to buying and selling vehicles via the platform, customers can also obtain financing, warranty coverage, and schedule delivery or pick-up.
Stanley Druckenmiller’s hedge fund initially invested in Carvana Co. (NYSE:CVNA) in Q3 2020. In the fourth quarter of 2021, the billionaire held 522,127 shares of the company, worth $121 million. In the first quarter of 2022, Duquesne Capital disposed of its stake in Carvana Co. (NYSE:CVNA) entirely.
On April 20, Carvana Co. (NYSE:CVNA) reported earnings for Q1 2022, posting a loss per share of $2.89, missing market estimates by $1.31. The revenue climbed about 56% year-over-year to $3.50 billion, outperforming Street forecasts by $125.65 million.
On May 16, DA Davidson analyst Michael Baker slashed the price target on Carvana Co. (NYSE:CVNA) to $49 from $140 and maintained a Neutral rating on the shares. The company's Operating Plan update detailed its short-term plan for EBITDA profitability, and also reaffirmed that its near-term volumes have improved, the analyst told investors in a research thesis. He added that the dropped price target reflects short-term industry headwinds, but he also views the overall tone from the analyst day presentation as positive.
According to Insider Monkey’s Q4 data, 56 hedge funds were bullish on Carvana Co. (NYSE:CVNA), compared to 58 funds in the last quarter. The total stakes owned in the fourth quarter of 2021 amounted to $7.2 billion, down from $8.3 billion in Q3 2021. In the first fiscal quarter of 2022, Chase Coleman’s Tiger Global Management held a prominent stake in Carvana Co. (NYSE:CVNA), with 8.5 million shares worth over $1 billion.
In addition to Alphabet Inc. (NASDAQ:GOOG), Airbnb, Inc. (NASDAQ:ABNB), and SentinelOne, Inc. (NYSE:S), billionaire Stanley Druckenmiller sold out of Carvana Co. (NYSE:CVNA).
Here is what Steel City Capital has to say about Carvana Co. (NYSE:CVNA) in its Q1 2022 investor letter:
“Thus far in the second quarter, the same dynamic has sustained – roughly offsetting long and short returns with similar net long exposure. On the short side, the largest contributor by far has been Carvana (NYSE:CVNA). While I’m elated to see this short finally working, I’m nowhere near taking a “victory lap.” In totality, the Partnership remains underwater on the position. With this in mind, I thought it would be helpful (to both me and you) to share what I’ve learned along the way and articulate why I’ve been so persistent in pursuing this particular short.
Over the years, I’ve described my affinity for shorting CVNA like being in an abusive relationship: We kept getting hurt, but I kept coming back for more. I just couldn’t let go of what I perceived to be atrocious fundamentals, strained liquidity, and other red flags such as a web of related-party transactions and ongoing insider sales. But none of this mattered. Why not? Because I failed to accurately reflect on what made the stock go up and down. What do I mean by that? Let me expand on that concept by drawing on a quote from one of the world’s greatest investors (and native Pittsburgher), Stanley Druckenmiller:
“When I first started out, I did thorough papers covering every aspect of a stock or industry. Before I could make the presentation to the stock selection committee, I first had to submit the paper to the research director. I particularly remember the time I gave him my paper on the banking industry. I felt very proud of my work. However, he read through it and said, “This is useless. What makes the stock go up and down?” That comment acted as a spur. Thereafter, I focused my analysis on seeking to identify the factors that were strongly correlated to a stock’s price movement as opposed to looking at all the fundamentals. Frankly, even today, many analysts still don’t know what makes their particular stock go up or down.”
So what makes CVNA go up and down?…” (Click here to see the full text)
8. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 63
Airbnb, Inc. (NASDAQ:ABNB) is a California-based travel technology firm that offers an online marketplace for vacation rentals and lodging. Stanley Druckenmiller purchased a stake in Airbnb, Inc. (NASDAQ:ABNB) in Q2 2021. By Q4, he held 496,861 shares of the company, worth $82.7 million. In Q1 2022, the billionaire discarded the entirety of his stake. The stock has declined about 29.59% in the last month.
Airbnb, Inc. (NASDAQ:ABNB) reported earnings for the first quarter of 2022 on May 3. The company posted a loss per share of $0.01, beating market consensus estimates by $0.22. The $1.51 billion revenue grew 70.13% year-over-year, outperforming analysts’ estimates by $56.49 million.
On May 11, Truist analyst Naved Khan told investors that Airbnb, Inc. (NASDAQ:ABNB)’s new customer-focused features should contribute towards greater conversion and guest retention/repeat bookings. The analyst maintained his Hold rating and $190 price target on Airbnb, Inc. (NASDAQ:ABNB), noting that increased guest flexibility and higher inventory available for longer duration stays will likely result in more bookings on the platform.
According to Insider Monkey’s database, 63 hedge funds were bullish on Airbnb, Inc. (NASDAQ:ABNB) at the end of December 2021, up from 58 funds in the earlier quarter. In Q1 2022, Jim Simons’ Renaissance Technologies was a notable shareholder of the company, with 3.40 million shares worth $584.6 million.
Here is what Tollymore Investment Partners has to say about Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2021 investor letter:
“Today disruptors are not typically seeking to replace incumbents entirely. Rather, they break the links in the customer journey, in doing so better aligning monetisation with value creation and minimizing externalities. For example, Airbnb broke the link between staying in residential property and owning it. Airbnb is a specific example of a business model innovation which separated asset use from ownership. This is hardly a novel idea; it’s called renting. Rental models lend themselves to assets which are expensive and durable, and where usage is infrequent.”
7. Coupa Software Incorporated (NASDAQ:COUP)
Number of Hedge Fund Holders: 59
Coupa Software Incorporated (NASDAQ:COUP) is a California-based company that provides a cloud-based business spend management platform. In Q4 2021, Stanley Druckenmiller’s Duquesne Capital held 129,399 Coupa Software Incorporated (NASDAQ:COUP) shares worth $20.4 million. The billionaire’s hedge fund sold out of his stake entirely in the first quarter of 2022.
On May 12, Goldman Sachs analyst Gabriela Borges double downgraded Coupa Software Incorporated (NASDAQ:COUP) to Sell from Buy, slashing the price target to $64 from $83. According to the analyst, business spend management is becoming a mature category and the next phase of share gain will be harder to achieve. In addition to that, Coupa Software Incorporated (NASDAQ:COUP)’s year-to-date success with cross selling has been mixed, with early success in smaller technology-focused deals but limited success with more recent product cycles, noted the analyst. She expects huge transformation projects to "move more slowly in a moderating growth environment". The analyst believes the risk/reward for Coupa Software Incorporated (NASDAQ:COUP) stock is "skewed negative" over the next year.
According to Insider Monkey’s fourth quarter database, 59 hedge funds were long Coupa Software Incorporated (NASDAQ:COUP), up from 52 funds in the earlier quarter. In Q1 2022, Mick Hellman’s HMI Capital held a prominent stake in the company, with more than 2 million shares worth $212.35 million.
“Within IT, we added positions in Coupa Software, a leader in the fast growing Business Spend Management market with opportunity to double its total addressable market by harnessing B2B payments with its Coupa Pay product; and AppLovin, a leading mobile gaming advertising network in a unique position to utilize its ad expertise to grow its own mobile game business at low user acquisition costs.”
6. TaskUs, Inc. (NASDAQ:TASK)
Number of Hedge Fund Holders: 30
TaskUs, Inc. (NASDAQ:TASK) is an American company providing digital outsourcing services for companies worldwide. The company offers clients such as Facebook and Doordash content creation and moderation services. Stanley Druckenmiller purchased 181,000 TaskUs, Inc. (NASDAQ:TASK) shares in the fourth quarter of 2021, worth $9.7 million. He disposed of his stake in Q1 2022.
On May 9, TaskUs, Inc. (NASDAQ:TASK) reported earnings for Q1 2022, posting an EPS of $0.34, beating estimates by $0.03. The revenue of $239.68 million surpassed analysts’ predictions by $8.87 million.
Baird analyst David Koning lowered the price target on TaskUs, Inc. (NASDAQ:TASK) to $34 from $50 and kept an Outperform rating on the shares on May 10. The analyst expects the stock to trade flattish as its Q1 beat estimates significantly, but 2022 guidance was not raised and it appears to be conservative. He also told investors that management continues to expect over 25% medium-term growth in revenue.
Among the hedge funds tracked by Insider Monkey, Jorge Paulo Lemann’s 3G Capital is a notable shareholder of TaskUs, Inc. (NASDAQ:TASK) as of Q1 2022, with 1.70 million shares worth $65.3 million. TaskUs, Inc. (NASDAQ:TASK) was present in the public stock portfolios of 30 hedge funds in the fourth quarter of 2021, compared to 18 funds in the earlier quarter.
TaskUs, Inc. (NASDAQ:TASK) is one of the stocks that Stanley Druckenmiller disposed of in Q1 2022, in addition to Alphabet Inc. (NASDAQ:GOOG), Airbnb, Inc. (NASDAQ:ABNB), and SentinelOne, Inc. (NYSE:S).
Here is what Alger Mid Cap Focus Fund has to say about TaskUs, Inc. (NASDAQ:TASK) in its Q4 2021 investor letter:
“TaskUs is a modern customer care company that manages digital customer experience exclusively for highly innovative “technology Disruptor” clients. The company’s services include managing end-consumers’’ needs for its clients, such as sales, after-sales support, complaint management, trust and safety and transaction processing. It also provides content security and operations services driven by artificial intelligence.
The stock underperformed in the final three months of 2021 despite the company providing a strong third quarter earnings report. We think the underperformance resulted from the company issuing 25% year-over-year earnings growth guidance for fiscal year 2022, which implies a meaningful deceleration. Additionally, an agreement preventing certain insiders from selling shares expires in the middle of January. The company’s shares, furthermore, have significant ownership by hedge funds, making them subject to year-end rebalancing. Despite the recent weakness, we think the fiscal year 2022 guidance is extremely conservative and the company is currently well positioned for future upward revisions to its earnings estimates.”
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Disclosure: None. 10 Tech Stocks to Sell in 2022 According to Billionaire Stanley Druckenmiller is originally published on Insider Monkey.