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Warren Buffett Is Holding These 10 Tech Stocks Despite Selloff

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·12 min read
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In this article, we discuss 10 tech stocks Warren Buffett is holding despite selloff. If you want to see more tech stocks held by the billionaire amid the broader market selloff, click Warren Buffett Is Holding These 5 Tech Stocks Despite Selloff.

Warren Buffett’s portfolio is often replicated by aspiring retail investors, as well as seasoned market experts. Amid the broader technology selloff, the market was waiting on Buffett's Berkshire Hathaway to reveal its stock picks for the first quarter of 2022, to assess the billionaire’s strategy in this volatile macro backdrop. 

Despite the broad selloff in the technology sector, Warren Buffett seems decidedly unfazed, and his Q1 holdings show mostly consistent positions in his previously chosen tech names. Buffett added close to 4 million Apple Inc. (NASDAQ:AAPL) shares in his portfolio, and the stake now represents 42.78% of his total 13F holdings for the quarter. Apple is one of the biggest dividend contributors in Buffett's hedge fund. 

Buffett went on a buying spree in the first three months of 2022. In addition to piling into finance and oil stocks like Citigroup Inc. (NYSE:C) and Occidental Petroleum Corporation (NYSE:OXY), Buffett also loaded up on HP Inc. (NYSE:HPQ), an American provider of personal computing, imaging devices, and printing products. HP Inc. (NYSE:HPQ) is a new technology name in the Berkshire portfolio. 

Warren Buffett’s $363.5 billion Q1 2022 portfolio boasts tech giants like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V) despite the wider tech selloff, among others. 

Warren Buffett
Warren Buffett

Our Methodology 

We used Warren Buffett’s Q1 portfolio for this analysis, selecting the tech names that were down recently amid the broader market selloff. We have mentioned the decline in share prices over the last month as of May 17. 

Warren Buffett Is Holding These Tech Stocks Despite Selloff

10. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 134

1-Month Decline in Share Price as of May 17: 9.59%

Apple Inc. (NASDAQ:AAPL) has featured on Buffett's portfolio since the beginning of 2016. Warren Buffett has been largely consistent with his Apple Inc. (NASDAQ:AAPL) position, which is worth $155.5 billion as of Q1 2022. He said he would have purchased more shares if the stock had not rebounded. Despite market selloff, Apple Inc. (NASDAQ:AAPL) remains the largest holding in the $363.5 billion Berkshire stock portfolio. 

Apple Inc. (NASDAQ:AAPL) declared on April 28 a $0.23 per share quarterly dividend, a 4.5% increase from its prior dividend of $0.22. The dividend is payable on May 12, to shareholders of the company as of May 9. Apple Inc. (NASDAQ:AAPL) paid out approximately $14.5 billion in dividends in its most recent fiscal year, ending September 2021. Warren Buffett rakes in average annual dividends of about $775 million from his position in the tech giant.

On May 3, Morgan Stanley analyst Katy Huberty noted that Apple Inc. (NASDAQ:AAPL)’s App Store net revenue growth accelerated to 8% year-over-year in April from March quarter growth of 6% year-over-year. The analyst believes there is a path to accelerating App Store growth as comps ease and her 15% year-over-year June quarter forecast for App Store growth remains unchanged. She has an Overweight rating and a $195 price target on Apple Inc. (NASDAQ:AAPL) shares.

Apple Inc. (NASDAQ:AAPL) was part of 134 hedge fund portfolios according to Insider Monkey’s Q4 database, up from 120 funds in the earlier quarter. At the end of Q1 2022, Ken Fisher of Fisher Asset Management held a significant position in the company, worth over $11 billion. 

Here is what Berkshire Hathaway has to say about Apple Inc. (NASDAQ:AAPL) in its Q4 2021 investor letter:

“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its year end market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”

9. Charter Communications, Inc. (NASDAQ:CHTR)

Number of Hedge Fund Holders: 73

1-Month Decline in Share Price as of May 17: 11.50%

Charter Communications, Inc. (NASDAQ:CHTR) is an American company specializing in broadband connectivity and cable operations, serving residential and commercial customers. Warren Buffett has consistently held a position in Charter Communications, Inc. (NASDAQ:CHTR) since Q2 2016. Despite the 1-month decline in share price of 11.50%, Buffett’s Q1 portfolio features a $2 billion stake in the company. 

On April 29, Charter Communications, Inc. (NASDAQ:CHTR) reported its fiscal Q1 results, posting earnings per share of $6.90, beating market consensus estimates by $0.24. However, the revenue of $13.20 billion fell short of analysts’ predictions by $6.66 million. 

BofA analyst Jessica Reif Ehrlich on May 3 downgraded Charter Communications, Inc. (NASDAQ:CHTR) to Neutral from Buy, slashing the price target to $500 from $740. She reduced her target due to growth concerns owing to higher competition from fixed wireless access deployments and faster fiber builds, in addition to the U.S. broadband market maturing notably. The analyst is also concerned that aggressive competition may impact Charter Communications, Inc. (NASDAQ:CHTR)’s broadband pricing power. She also noted that the stock trades at a premium relative to its peers despite higher leverage and concerns around slowing growth.

According to Insider Monkey’s Q4 data, 73 hedge funds held long positions in Charter Communications, Inc. (NASDAQ:CHTR), compared to 74 funds in the last quarter. Harris Associates, in the first quarter of 2022, owned more than 4 million shares of the company, worth $2.25 billion. 

In addition to Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V), Charter Communications, Inc. (NASDAQ:CHTR) is a notable tech stock in the Berkshire Hathaway portfolio. 

Here is what Motiwala Capital has to say about Charter Communications, Inc. (NASDAQ:CHTR) in its Q4 2021 investor letter:

“Charter Communications (NASDAQ:CHTR) is the second-largest cable service provider in the US providing video, data, and voice services under the Spectrum brand. Charter had a market cap of $130 billion at purchase and is likely to generate upwards of $8B in free cash flow in 2021. The company repurchases shares at a high rate and fcf/share have been growing in the mid-teens %. The company has been investing in nascent mobile services which are not profitable currently. There is potential for this business to be profitable as it scales. Another possibility is to shutdown the service if it does turn a profit in a few years. Both outcomes should increase the profits at CHTR from the current levels. Debt is high but the recurring cash flows allow it to service the debt.”

8. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 279

1-Month Decline in Share Price as of May 17: 24.49%

Amazon.com, Inc. (NASDAQ:AMZN) is a relatively new holding in the Berkshire Hathaway portfolio. Warren Buffett first acquired a position in Amazon.com, Inc. (NASDAQ:AMZN) in Q1 2019, and in the first quarter of 2022, the billionaire held 533,300 shares of the company worth $1.7 billion. The share price has declined about 25.5% in the last month. 

Amazon.com, Inc. (NASDAQ:AMZN) reported earnings for the first quarter of 2022 on April 28. The company posted a loss per share of $7.56, missing market consensus estimates by $16.05. The $116.44 billion revenue also fell short of analysts’ predictions by $67.09 million. 

On May 2, Wedbush removed Amazon.com, Inc. (NASDAQ:AMZN) from his Best Ideas List due to its investment price discipline. Analyst Michael Pachter maintained an Outperform rating and a price target of $3,500 on the shares.

According to Insider Monkey’s fourth quarter database, 279 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 250 funds in the last quarter. In Q1 2022, Jaime Sterne’s Skye Global Management held a significant position in the company, with 740,500 shares worth $2.4 billion. 

Here is what Miller Value Partners Opportunity Equity has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:

“For frame of reference, Amazon (NASDAQ:AMZN) bottomed at the same valuation in the financial crisis (side note: Amazon bottomed at 4x EV/GP after the tech bubble burst)! So there’s historical precedent for the lows being in. We will see whether that holds true this time. Regardless, we think there’s significant upside over a 5-year time horizon. The one other topic I want to briefly address is our volatility. We hope to write something about the topic in more depth in the future, but we want our clients and prospective investors to understand our views on it. We think that volatility is significantly misunderstood. We believe it creates opportunities from which we can profit.”

7. Snowflake Inc. (NYSE:SNOW)

Number of Hedge Fund Holders: 84

1-Month Decline in Share Price as of May 17: 24.21%

Snowflake Inc. (NYSE:SNOW) offers a cloud-based data platform in the United States and internationally. In Q3 2020, Warren Buffett’s Berkshire Hathaway acquired a stake in Snowflake Inc. (NYSE:SNOW), buying 6.12 million shares worth $1.5 billion. In Q1 2022, the billionaire held a $1.40 billion position in the company. The share price has declined 24.21% in the last month and over 63% in the past 6 months, but Buffett’s stake in Snowflake Inc. (NYSE:SNOW) remained consistent. 

Truist analyst Joel Fishbein on May 16 maintained a Buy rating on Snowflake Inc. (NYSE:SNOW) and lowered the firm's price target on the shares to $300 from $350 as part of a broader research note on valuations in Software space. While he believes that software fundamentals will remain robust despite the macro backdrop consisting of rate hikes, geopolitical instability, and looming recession, he also noted the "moderately increased probability" of downside risk for the sector.

According to Insider Monkey’s Q4 data, 84 hedge funds were long Snowflake Inc. (NYSE:SNOW), up from 73 funds in the prior quarter. Brad Gerstner’s Altimeter Capital Management is a significant shareholder of the company as of Q1, with more than 17 million shares worth $3.90 billion. 

Here is what Baron Global Advantage Fund has to say about Snowflake Inc. (NYSE:SNOW) in its Q1 2022 investor letter:

“Snowflake grew revenues…106% (to $1.2 billion — while new bookings in the fourth quarter alone were $1.2 billion in contract value) with 12% margins. The stock was down 32% in the first quarter. We believe that these companies, along with many others that we own, are the long-term beneficiaries of digital transformation, a multi-decade paradigm shift sweeping global economies today. Frank Slootman, Snowflake’s CEO, explained it this way in his most recent earnings call with investors:

“Snowflake’s growth is driven by digital transformation and long-term secular trends in data science and analytics, enabled by cloud-scale computing and Snowflake’s cloud-native architecture. Snowflake is a single data operations platform that addresses a broad spectrum of workload types and incredible performance economy and governance. As a platform, Snowflake enables the data cloud, a world without silos and the promise of unfettered data science.”

In plain English it means that we want to make better decisions and we have all this data available to us. Snowflake will enable businesses to utilize all their data to improve their decision-making. (Click here to read full text)

6. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 144

1-Month Decline in Share Price as of May 17: 7.86%

Mastercard Incorporated (NYSE:MA) is an American multinational fintech corporation, offering digital and card-based payment solutions to customers worldwide. In Q1 2022, Berkshire Hathaway kept its stake in Mastercard Incorporated (NYSE:MA) consistent, holding almost 4 million shares worth $1.4 billion. Warren Buffett has been a long-term shareholder of the company, first investing in the stock back in Q1 2011.

On April 28, Mastercard Incorporated (NYSE:MA) reported optimistic financial results for Q1, posting an EPS of $2.76, beating market estimates by $0.60. The revenue of $5.17 billion grew 24.36% year-over-year, outperforming analysts' forecasts by $267.59 million.

Goldman Sachs analyst Will Nance on May 18 initiated coverage of Mastercard Incorporated (NYSE:MA) with a Buy rating and $460 price target, implying 38% upside. After "lackluster returns in 2021 and a choppy start to 2022," the analyst is "constructive" on the payments space, noting relative valuations have declined prominently over the last 6 months and the companies are now positioned advantageously to navigate a low-growth, inflationary environment. He believes Mastercard Incorporated (NYSE:MA) will keep delivering "best-in-class" earnings growth, given "strong secular tailwinds, and strong operating leverage as the company continues to add scale".

In Q4 2021, 144 hedge funds were bullish on Mastercard Incorporated (NYSE:MA), compared to 146 funds in the last quarter. In Q1 2022, Charles Akre's Akre Capital Management owned a prominent stake in the company, with 5.85 million shares worth over $2 billion.

Like Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Visa Inc. (NYSE:V), elite hedge funds are pouring into Mastercard Incorporated (NYSE:MA). 

Here is what Ensemble Capital has to say about Mastercard Incorporated (NYSE:MA) in its Q1 2022 investor letter:

“Mastercard (7.6% weight in the Fund): This company literally earns a percent based fee on dollars spent. When inflation increases the prices of goods across the economy, Mastercard’s revenue increases along with inflation. Thus, the company in some respects is perfectly hedged against inflation with their revenue accelerating automatically when inflation surges.”

 

 

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Disclosure: None. Warren Buffett Is Holding These 10 Tech Stocks Despite Selloff is originally published on Insider Monkey.