In this article, we discuss Ken Fisher's top tech stock picks. You can skip our detailed analysis of Ken Fisher's hedge fund and his investment philosophy, and go directly to read the Ken Fisher Stock Portfolio: 5 Biggest Tech Stocks.
Ken Fisher is an American billionaire, author, investment analyst, and the founder of Fisher Investments, a money management firm. The firm was founded in 1979 and Ken Fisher is currently serving as Executive Chairman and Co-Chief Investment Officer of the firm. He is also an author of eleven books, six of which are national bestsellers. His books mainly focus on his investment strategy. As of October 2021, Ken Fisher’s net worth stands at $6 billion.
Some of the notable tech stocks in Fisher’s portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Adobe Inc. (NASDAQ:ADBE), and salesforce.com, inc. (NYSE:CRM).
Let's analyze our list of Ken Fisher's top tech stock picks. The companies mentioned below are the tech stocks taken from Fisher Asset Management's 13F portfolio as of Q2 2021.
Ken Fisher of Fisher Asset Management
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Ken Fisher Stock Portfolio: 10 Biggest Tech Stocks
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Fisher Asset Management’s Stake Value: $1,181,386,000
Percent of Fisher Asset Management’s 13F Portfolio: 0.74%
Number of Hedge Fund Holders: 60
Cisco Systems, Inc. (NASDAQ:CSCO) ranks tenth on our list of Ken Fisher’s top tech stock picks. It is an American technology company that develops and sells equipment related to networking hardware, software, and communications. Along with this, the company also offers high-tech services to its consumers.
In Q2 2021, Fisher Asset Management increased its stake in Cisco Systems, Inc. (NASDAQ:CSCO) by 4% and now holds over 22.2 million shares in the company, valued at roughly $1.2 billion.
As of Q2 2021, 60 hedge funds tracked by Insider Monkey have positions in Cisco Systems, Inc. (NASDAQ:CSCO), up from 59 in the previous quarter. The total value of these stakes is over $4.2 billion.
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
9. SAP SE (NYSE:SAP)
Fisher Asset Management’s Stake Value: $1,245,099,000
Percent of Fisher Asset Management’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 17
SAP SE (NYSE:SAP) is a German multinational software and technology company that specializes in enterprise application software. The company ranks ninth on our list of Ken Fisher’s top tech stock picks.
As of Q2 2021, Fisher Asset Management owns over 8.8 million shares in SAP SE (NYSE:SAP), valued at $1.2 billion. The hedge fund has increased its activity by 4% in the company, which now accounts for 0.78% of its 13F portfolio.
As of Q2 2021, 17 hedge funds tracked by Insider Monkey have positions in SAP SE (NYSE:SAP), compared with 19 in the previous quarter. These stakes are valued at over $1.6 billion.
Polen Capital mentioned SAP SE (NYSE:SAP) in its Q2 2021 investor letter. Here is what the firm has to say:
“During the second quarter, the leading absolute contributors to performance (includes) SAP. German enterprise software company SAP was a leading contributor to Portfolio returns in the quarter. Over the last six months, SAP rolled out a new simplified commercial offering aimed at making it easier for their customers to transition their core enterprise resource planning software to the cloud. “Rise with SAP” will encourage customers to consider moving certain workloads to new cloudenabled software. In many cases, SAP customers standardized business processes on SAP software over decades. Contemplating and enacting transformational change is a huge undertaking for these customers. Historically, transitioning to the cloud involves many third-party helpers, so having a single, trusted partner to lead the conversation, design the road map, and own the execution is helpful. Further, as customers shift to the cloud, more peripheral workloads can be handled by SAP, thereby potentially increasing the scale of its relationship with certain customers. Not all legacy customers will adopt SAP’s cloud software, but there could be meaningful performance benefits (quicker innovation, more agility, and mobility, etc.) and cost savings for those that do.
In addition, new customers are coming aboard the SAP cloud platform, which we view as a testament to its leading capabilities. This initiative could drive cloud software revenue growth greater than 20% in the coming years, some of which will cannibalize existing onpremise software sales. That said, the potential net result is attractive and durable growth. We think SAP is capable of doubledigit earnings growth over the coming five-year period.”
8. Intel Corporation (NASDAQ:INTC)
Fisher Asset Management’s Stake Value: $1,763,741,000
Percent of Fisher Asset Management’s 13F Portfolio: 1.1%
Number of Hedge Fund Holders: 78
Intel Corporation (NASDAQ:INTC) is an American technology and semiconductor company that delivers microprocessors for major computer companies, such as Dell, Lenovo, and HP. The company ranks eighth on our list of Kin Fisher’s top tech stock picks.
In Q2 2021, Fisher Asset Management increased its stake in Intel Corporation (NASDAQ:INTC) by 5%. The hedge fund holds roughly 31.5 million shares in the company, worth $1.76 billion. The company accounts for 1.1% of the hedge fund’s 13F portfolio. On September 17, Intel Corporation (NASDAQ:INTC) announced a quarterly dividend of $0.3475 per share, in-line with the previous, yielding 2.54%.
As of Q2 2021, 78 hedge funds tracked by Insider Monkey have positions in Intel Corporation (NASDAQ:INTC), down from 83 in the previous quarter. The total value of these stakes is over $6.76 billion.
Alger mentioned Intel Corporation (NASDAQ:INTC) in its Q1 2021 investor letter. Here is what the firm has to say:
“Short exposure to Intel also detracted from performance. Intel designs and manufactures semiconductors for the computing and communications industries. Intel’s proprietary intellectual strength and manufacturing prowess versus the competition is deteriorating, which is causing the company to lose market share and profit opportunities. The short position detracted from portfolio returns as the share price reacted positively to the announcement of Pat Gelsinger being hired as chief executive officer, a stronger-than-anticipated quarterly earnings report driven by unusually robust PC sales that we believe are unsustainable and the unveiling of “Intel Unleashed,” a new long-term program to help improve manufacturing and spur innovation. This program involves opening two fabrication plants in Arizona, which confirms Intel’s commitment to continue as an integrated design manufacturer. Importantly, Intel continues to experience issues with its next generation server chips which are disadvantaging Intel versus the competition.”
7. ASML Holding N.V. (NASDAQ:ASML)
Fisher Asset Management’s Stake Value: $2,800,226,000
Percent of Fisher Asset Management’s 13F Portfolio: 1.75%
Number of Hedge Fund Holders: 44
ASML Holding N.V. (NASDAQ:ASML) stands seventh on our list of Ken Fisher’s top tech stock picks. It is a Dutch semiconductor company that mainly manufactures chip-making equipment.
In Q2 2021, Fisher Asset Management increased its activity in ASML Holding N.V. (NASDAQ:ASML) by 5%. The hedge fund owns over 4 million shares in the company, valued at $2.8 billion. The company currently represents 1.75% of the fund’s 13F portfolio. Recently, ASML Holding N.V. (NASDAQ:ASML) announced that it expects to generate annual revenue of between €24 billion and €30 billion, due to its increased investments in technology.
As of Q2 2021, the number of hedge funds tracked by Insider Monkey having stakes in ASML Holding N.V. (NASDAQ:ASML) grew to 44 from 35 in the previous quarter. These stakes are valued at over $4.3 billion.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Adobe Inc. (NASDAQ:ADBE), and salesforce.com, inc. (NYSE:CRM), ASML Holding N.V. (NASDAQ:ASML) is favored by investors and analysts in 2021.
Polen Capital mentioned ASML Holding N.V. (NASDAQ:ASML) in its Q2 2021 investor letter. Here is what the firm has to say:
“Dutch technology company ASML is the world’s only supplier of photolithography systems to leading-edge semiconductor manufacturers. It is a gross simplification and a valid point to note that ASML’s technology enables the computing technology we use today. For years, ASML engineers bent the laws of physics and enabled Moore’s Law—which states that computer chips will become faster and cost less—to progress.
Incremental innovation gains mushroomed with the rollout of Extreme Ultraviolet (EUV) technology. We were impressed by management’s recent acknowledgment that demand for ASML’s lithography systems is exceeding their prior expectations. Recent announcements by management and major customers for ASML give us even more confidence in the sustainability of growth. We believe ASML could grow its earnings at a high-teens rate over the coming five years.”
6. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Fisher Asset Management’s Stake Value: $3,121,910,000
Percent of Fisher Asset Management’s 13F Portfolio: 1.96%
Number of Hedge Fund Holders: 64
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Taiwanese multinational semiconductor company that manufactures and designs microchips used in communication devices. The company stands sixth on our list of Ken Fisher’s top tech stock picks.
As of Q2 2021, Fisher Asset Management holds approximately 26 million shares in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), valued at $3.1 billion. The company represents 1.96% of the hedge fund’s 13F portfolio. In September, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported a 19.7% growth in its revenue at $5.44 billion, compared with the prior-year quarter.
As of Q2 2021, 64 hedge funds tracked by Insider Monkey have positions in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), compared with 76 in the previous quarter. The total value of these stakes is over $10.6 billion.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Adobe Inc. (NASDAQ:ADBE), and salesforce.com, inc. (NYSE:CRM), analysts investors are also paying attention to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in 2021.
“We initiated a new position in Taiwan Semiconductor Manufacturing, the largest contract manufacturer of logic semiconductors in the world. The Company has invested prodigious amounts of capital ($17 billion in 2020 alone and as much as $28 billion this year) over the past several years, at returns that suggest to us a very steep and sustainable competitive advantage. The Company has a very long runway to grow its business at a double-digit rate, driven by several favorable industry and company-specific trends including semiconductor architectural design changes, increasing manufacturing process complexity, and the proliferation of more logic semiconductors in more devices.
With over 50% market share, more than 3X that of its next largest competitor, Samsung, the Company dominates the contract foundry industry for logic semiconductors (source: Trendforce). Taiwan Semi has erected a formidable competitive barrier with its manufacturing capacity, as the Company carries over $150 billion in gross PPE (property, plant, and equipment) on its balance sheet. This would put the Company in the top echelons of invested tangible capital, globally. Further, the Company has committed to a multi-year, $100 billion capital investment program aimed at building out some of the only capacity capable of manufacturing leading-edge, sub 7 nanometers (nm) resolution integrated circuits. While semiconductor cycles are notoriously boom-bust, the Company has already secured enough demand to drive very high utilization rates for this new bleeding-edge capacity much earlier compared to previous capacity rollouts.
There are several reasons for higher sustained utilization this time around. First, integrated circuits have become extremely complex to manufacture. The Company has secured the majority of the precious few extreme ultraviolet (EUV) tools that enable the manufacture at resolutions that are substantially smaller than the wavelength of light. The Company has invested in and works very closely (on-site) with EUV tool makers to develop this technology. As a result, there is less available capacity from competitors as compared to previous cycles. Second, due to this complexity, chip developers are radically changing their
architectural designs, pushing more demand to the likes of Taiwan Semi that would otherwise be kept in-house. For example, one large customer, AMD, has had a lot of success taking CPU market share from Intel by architecting chips that have disaggregated several functions into smaller dies. Intel has recently launched a similar architectural change, but it will require it to utilize the Company’s sub-7nm capabilities, as Intel does not yet have an economic way to produce these nodes, in-house. Third, the overall demand for more computing power continues to grow as applications related to artificial intelligence require
this, and the availability of hardware instances via public cloud providers enables individuals to access a couple, a dozen, or even hundreds of processors at once. This is vastly different compared to the user-PC-server dynamic of previous cycles. Last, as has been widely reported, older, “trailing node” foundry capacity has been in short supply. These shortages have little to do with the Company’s leading-edge investments right now, as less than 40% of their revenues are derived from nodes larger than 28nm. However, we expect their current leading edge to eventually become “trailing-node.” As these smaller nodes proliferate over time, we expect fewer chip manufacturers will be capable of generating manufacturing yields that justify capital investment, driving up the long-term utilization and pricing power of the Company’s installed capacity.
Over the next several years, we expect Taiwan Semi to generate percentages of compounded revenue growth in the mid-teens along with higher margins and returns, driven by their scarce capacity in leading-edge logic manufacturing. Though the stock trades at a slight premium to the market, we think it is much more reasonable compared to where it traded earlier this year. In fact, the stock briefly went through a bear market earlier this year – after which we began purchasing shares. As the market might periodically serve up shares due to cycle-ending fears, we will look to add to our holding as the Company should be able to sustain superior growth and returns longer than previous cycles.”
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Disclosure. None. Ken Fisher Stock Portfolio: 10 Biggest Tech Stocks is originally published on Insider Monkey.