In this article we will take a look at the 5 best tech stocks to invest in for the long-term. For a detailed analysis of the technology industry, go directly to the 10 Best Tech Stocks to Invest in For Long-Term.
5. Facebook, Inc. (NASDAQ: FB)
Number of Hedge Funds: 242
Facebook (NASDAQ: FB) is a Menlo Park-based technology company. It owns and runs social media platforms like Facebook, Instagram, and messaging service WhatsApp. Although it is one of the largest tech firms in the world, with a market cap close to $1 trillion, Facebook has come under increased regulatory scrutiny in recent years regarding data privacy and content management concerns. It dominates the digital advertising market and has increased ad prices by 30% since March to boost revenue. It is fifth on our list of 10 best tech stocks to invest in for long term gains.
On April 19, investment bank Oppenheimer forecast that Facebook would benefit from an increase global internet advertising, boosting growth estimates for the Menlo Park firm. On April 15, Facebook announced that it had shifted all operations to alternative energy, fulfilling an earlier promise to achieve net zero emissions.
At the end of the fourth quarter of 2020, 97 hedge funds in the database of Insider Monkey held stakes worth $10.5 billion in the firm, down from 106 in the preceding quarter worth $11 billion.
4. Alphabet Inc. (NASDAQ: GOOG)
Number of Hedge Funds: 157
Alphabet Inc. (NASDAQ: GOOG) is a Mountain View-based technology firm. It is most famous for owning and operating internet-based search engine Google, but also offers other products like Android, Google Chrome, Google Maps, Google Play, and YouTube. It is one of the big five technology companies in the US and diversified business in recent years by venturing into artificial intelligence, smartphones, autonomous vehicles and the healthcare industry. Alphabet was founded as Google in 1998 and is fourth on our list of 10 best tech stocks to invest in for long term gains.
On April 22, the company said it backed plans by President Biden to cut greenhouse gas emissions in the US by half by the end of this decade. Google, owned by Alphabet, was one of the first tech firm to become carbon neutral back in 2007. On April 21, the Israeli government announced that Google had won a contract to provide cloud services to the country’s military.
Out of the hedge funds being tracked by Insider Monkey, Australia-based investment firm Bronte Capital is a leading shareholder in the firm with 48,493 shares worth more than $100 million.
“Alphabet Inc. was among the top contributors to performance during the quarter. Alphabet is a leading search provider and as such a beneficiary in the share shift of advertising dollars from traditional mediums like television, radio and newspapers to digital platforms. The company is a leader in implementing artificial intelligence and in developing autonomous vehicles. It also provides cloud computing services and it owns the highly trafficked YouTube property. Alphabet issued a strong quarterly report highlighted by acceleration that exceeded prior strong growth trends in both revenue and profitability. Results of the company’s search service and YouTube strongly exceeded expectations. The strength of search results, driven by e-commerce-related demand and YouTube results, were propelled by returning brand advertisement in a sequentially improving economy. The revenues acceleration was seen in cloud services as well as because of continuing corporate spending on digitization. Earnings exhibited strong operating leverage as costs were down year over year due to slowing headcount growth, as well as diminished travel and office space costs. While regulatory scrutiny remains an overhang, the intensity of investor concern has moderated recently as the late 2020 U.S. Department of Justice anti-trust case against the company had a narrow scope, primarily alleging that the company has improperly established agreements with various phone manufacturers, including Apple, to ensure that Google is the default search engine across devices. Investors have interpreted the lawsuit as potentially less damaging to Alphabet than other broader more threating possibilities.”
3. Microsoft Corp. (NASDAQ: MSFT)
Number of Hedge Funds: 258
Microsoft Corp. (NASDAQ: MSFT) is a Redmond-based technology company. It is renowned for having developed Windows, an operating system for computers. It also offers a host of other software-related services, like the Microsoft Office Suite, for productivity purposes. In the past two decades, Microsoft has expanded into the electronics manufacturing as well. It has a market cap of close to $2 trillion and posted more than $143 billion in annual revenue in June 2020. Founded in 1975, it is third on our list of 10 best tech stocks to invest in for long term gains.
Instead of charging a one-time premium for software services, Microsoft has moved towards a subscription-based model over the past few years, charging annual fees for product updates. The company owns a multi-billion stake in streaming platform Confluent that is set to go public very soon at a tentative valuation of more than $4 billion. On April 22, Microsoft announced that it had reached a deal with the United Kingdom government to provide them with a supercomputer for weather forecasting.
At the end of the fourth quarter of 2020, 258 hedge funds in the database of Insider Monkey held stakes worth $52 billion in the firm, up from 234 in the preceding quarter worth $42 billion.
Alger Spectra Fund, in their Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT). Here is what Alger Spectra Fund has to say about Microsoft Corporation in their Q1 2021 investor letter:
“Microsoft Corporation was among the top contributors to performance during the quarter. Microsoft is a Positive Dynamic Change beneficiary of corporate America’s transformative digitization. Microsoft’s enterprise cloud product, Azure, is rapidly growing and accruing market share. Recently, Microsoft reported that Azure grew 50% during the fourth quarter. This high unit volume growth is a primary driver of the company’s higher share price, but Microsoft’s operating execution has enabled notable margin expansion that has also helped to increase forward earnings estimates. Microsoft’s subscription-based software offerings and cloud computing services have not been entirely immune to the pandemic-related economic slowdown but are resilient because they enhance customers’ growth initiatives and help them to reduce costs. Additionally, investors appreciate Microsoft’s strong free cash flow generation and its return of cash to shareholders in the form of dividends and share repurchases.”
2. Amazon.com, Inc. (NASDAQ: AMZN)
Number of Hedge Funds: 273
Amazon.com, Inc. (NASDAQ: AMZN) is a Washington-based multinational technology corporation primarily in the e-commerce business. The retail business of Amazon engages in reselling products of third parties on digital platforms as well as physical stores. The company has stakes in the electronic manufacturing business too, being famous for selling e-reader Kindle. It has a large publishing business as well. Amazon Web Services sells cloud-based services to customers. Amazon was founded in 1994 and is placed second on our list of 10 best tech stocks to invest in for long term gains.
On April 20, Amazon announced that it had launched a hair salon in London that will offer augmented reality hair consultations to citizens. The firm is also making inroads into digital advertising. Earlier this month, WSJ reported that Amazon had increased digital advertising revenue to more than 10% of the total, closing the gap on competitors who stood at more than 20%.
Out of the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Tybourne Capital Management is a leading shareholder in the firm with 53,418 shares worth more than $165 million.
Alger Spectra Fund, in their Q1 2021 investor letter, mentioned Jeffrey Bezos‘ Amazon.com, Inc. (NASDAQ: AMZN). Here is what Alger Spectra Fund has to say about Amazon.com, Inc. in their Q1 2021 investor letter:
“Long position Amazon.com, Inc. was among the top detractors from performance. Amazon continued to generate strong high unit volume growth by taking market share from brick and mortar retailing. In the recent quarter, retail sales surprised notably on the upside as coronavirus has accelerated the adoption of e-commerce. Some of these shoppers will remain loyal beyond the end of social distancing further pushing the permanent market share gain of e-commerce at the expense of brick and mortar. Amazon.com’s guidance includes a modest deceleration in the retail sales growth but at still strong levels in the upcoming quarter. The same accelerated trend in adoption was also seen at Amazon’s AWS as corporate America embraced cloud offerings in the new distributed workforce environment although profitability in this segment fell short of expectations due to Amazon.com investing ingrowth initiatives.
Despite the continuing gains in these large addressable markets, Amazon’s share price detracted from performance as investors wait to see how the significant 2020 growth comparisons generated during the economic shutdown affect Amazon’s reported growth rates in 2021. Meanwhile, value versus growth equity returns in recent months indicate that investors possibly prefer to chase the transitory performance associated with pure play beneficiaries of economic re-openings while eschewing the potential compounding benefits garnered from high-quality, long-duration innovation led growers like Amazon.”
1. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Funds: 146
Apple Inc. (NASDAQ: AAPL) is a Cupertino-based multinational technology firm. The firm is famous for its electronic devices, including iPhone, the iPad, and others. It also develops and sells laptops and computers. Apple is the biggest technology company in the world in terms of market capitalization and has stakes in the cloud computing, navigation, and computer software businesses as well. It has an online music and video streaming service with millions of subscribers. Apple was founded in 1976 and is placed first on our list of 10 best tech stocks to invest in for long term gains.
On Mach 31, Swiss investment banking group UBS maintained a Buy rating on Apple stock, projecting good earnings for the company in the next six months as it prepares to launch new products. The investment firm set a price target of $142 for the technology company stock.
At the end of the fourth quarter of 2020, 146 hedge funds in the database of Insider Monkey held stakes worth $141 billion in the firm, up from 134 in the preceding quarter worth $127 billion.
“Long position Apple Inc. was among the top detractors from performance. Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’ s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. This tight engagement is facilitating significant growth in high margin services like music, apps and Apple Pay. Apple’s continued development of these high-margined services and earnings for wearable products such as the Apple Watch as well as the introduction of 5G phones is enhancing Apple’s growth. The shares detracted from portfolio performance as estimates of iPhone production were cut due to easing demand for the 12 Pro model and a normalizing inventory level.”
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