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In this article, we discuss the 6 tech stocks to buy today according to billionaire David Tepper. If you want to skip our detailed analysis of Tepper's investment philosophy, hedge fund returns, and history, go directly to 3 Tech Stocks To Buy Today According To Billionaire David Tepper.
Legendary investor, philanthropist, and co-founder of the public equity investment fund Appaloosa Management, David A. Tepper is renowned in the world of hedge funds for his investment in depressed bank securities during the financial crisis, generating $7.5 billion in 2009 on a return of 132%. At its inception in 1993, with $57 million in capital, Appaloosa Management delivered a 57% return on its assets within six months. From that point on, the fund's worth grew steadily, from $300 million in 1994 to $800 million in 1996, and in Q1 2022, Appaloosa Management's portfolio was valued at approximately $2.5 billion.
After earning his bachelor's in economics from the University of Pittsburgh in 1978, and his M.B.A from the David A. Tepper School of Business at Carnegie Mellon University in 1982, named after the famed investor following his donation of $55 million to the university in 2003, Tepper began his career in finance, serving as a securities analyst at Equibank, and then later on as a financial analyst at Republic Steel. In 1982, Tepper was hired by Keystone Mutual Funds, where he gained extensive experience in financial management. In 1985, he began his career with Goldman Sachs as a credit analyst, moving on to the high-yield desk as its head trader, where he mainly focused on bankruptcies and junk bonds. Having been passed over for a partnership at the firm twice, Tepper left Goldman Sachs, and established his own hedge fund in 1993.
A cursory look at Appaloosa Management's portfolio reveals that it has invested in a number of sectors, ranging from technology to healthcare. Q1 2022 was another time during the firm's history where it held some of the most famous tech stocks in the world, including Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), among others listed below.
For the following list, we scoured through Tepper's 13F filings for the first quarter of 2022 and picked the top tech stocks the fund holds.
Tech Stocks To Buy Today According To Billionaire David Tepper
6. Uber Technologies, Inc. (NYSE:UBER)
Appaloosa Management's Stake Value: $72.07 million
Percentage Of Appaloosa Management's 13F Portfolio: 2.88%
Number of Hedge Fund Holders: 144
Uber Technologies, Inc. (NYSE:UBER) is an American mobility as a service provider. Operating in approximately 72 countries, the company offers vehicles for hire, food delivery, package delivery, courier services, and courier services. David Tepper increased his stakes in the transport company by a staggering 798% during the first quarter, holding over 2.02 million shares worth approximately $72.07 million. These stakes represented 2.88% of the total 13F securities.
On May 5, JPMorgan analyst Doug Anmuth reiterated an Overweight rating on the shares of Uber Technologies, Inc. (NYSE:UBER) with a $60 price target. The analyst believes that the company's Q1 earnings results point toward a solid outlook as it emerges stronger from the pandemic while focusing on product innovation and cross platform advantages.
According to the database of elite funds maintained by Insider Monkey, Uber Technologies, Inc. (NYSE:UBER) was part of 144 public hedge fund portfolios at the end of Q1 2022, down from 153 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management owned a sizable stake in Uber Technologies, Inc. (NYSE:UBER) in Q1 2022, with 23.7 million shares worth $849 million.
Similar to Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Uber Technologies, Inc. (NYSE:UBER) is one of David Tepper's favorite tech stocks.
Here is what ClearBridge Large Cap Growth Strategy has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2021 investor letter:
“We have also been looking for multi-year secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
5. Microsoft Corporation (NASDAQ:MSFT)
Appaloosa Management's Stake Value: $112.84 million
Percentage Of Appaloosa Management's 13F Portfolio: 4.51%
Number of Hedge Fund Holders: 259
During Q1 2022, Appaloosa Management raised its stake in Microsoft Corporation (NASDAQ:MSFT) by 24%. David Tepper held a $112.84 million stake in the firm consisting of 366,000 shares, representing 4.51% of his overall investment portfolio, as of the end of the first quarter.
Earlier this May, RBC Capital analyst Rishi Jaluria reiterated his Outperform rating and $380 price target on Microsoft Corporation (NASDAQ:MSFT) shares following a meeting with the software giant's investor relations team. The analyst states that he is confident in the growth of the company's Azure and Office segments, while noting that the impact from the company's salary increases are "minimal".
The investor sentiment for the stock has largely been positive, making Microsoft Corporation (NASDAQ:MSFT) a notable candidate for any portfolio. According to Insider Monkey’s database, 259 funds owned stakes in Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter of 2022, amounting to $65.6 billion.
Motiwala Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2021 investor letter, here is what the firm had to say:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
4. Micron Technology, Inc. (NASDAQ:MU)
Appaloosa Management's Stake Value: $163.57 million
Percentage Of Appaloosa Management's 13F Portfolio: 6.54%
Number of Hedge Fund Holders: 78
A major player in the semiconductor space, Micron Technology, Inc. (NASDAQ:MU) is an American producer of computer memory and computer data storage. The company designs dynamic random-access memory, flash memory, and USB flash drives. Securities filings for the first quarter of 2022 reveal that Appaloosa Management owned 2.1 million shares of Micron Technology, Inc. (NASDAQ:MU), worth $163.57 million, representing 6.54% of the 13F holdings.
Evercore ISI analyst C.J. Muse reiterated his Outperform rating and $90 price target on Micron Technology, Inc. (NASDAQ:MU) shares following the company's analyst day meeting on May 13. According to the analyst, the memory industry is outgrowing the overall semiconductor industry, with the players acting in a highly disciplined manner. Among these Micron Technology, Inc. (NASDAQ:MU) seems to be executing well.
Out of the 912 elite hedge funds tracked by Insider Monkey in the first quarter of 2022, 78 were long Micron Technology, Inc. (NASDAQ:MU) with stakes worth $3.42 billion. This is compared to 83 funds in the preceding quarter, with stakes amounting to $5.5 billion. Seth Klarman's Baupost Group is one of the leading stakeholders in Micro Technology, Inc. (NASDAQ:MU), with over 3.1 million stakes worth approximately $242.3 million.
Much like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Micron Technology, Inc. (NASDAQ:MU) is a notable tech stock according to David Tepper.
Investment firm Hazelton Capital Partners mentioned Micron Technology, Inc. (NASDAQ:MU) in its Q3 2021 investor letter. Here is what the fund said:
“It’s hard to explain how shares of Micron Technology, manufacture of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides.
Currently Micron Technology trades at just 8x 2022 estimate earnings. MU is expecting growth in both DRAM and NAND not just from the supply of more chips to data centers, artificial intelligence, the auto sector, and mobile devices, but also from greater demand for gigabyte capacity per unit within those segments. With a healthy balance sheet, improving return on invested capital, and expanding cash flows, not only should Micron benefit from improving future earnings but its multiple should also reflect the transition to a flattening cost curve.”
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Disclosure. None. 6 Tech Stocks To Buy Today According To Billionaire David Tepper is originally published on Insider Monkey.