Stock Picks That Billionaires Love

Broadcom

• Billionaire investor: Steve Cohen (Point72)
• Stake value: $623.4 million
• Percent of portfolio: 1.0%

Steve Cohen is probably best known for using his estimated net worth of nearly $20 billion to buy the New York Mets. But he's also known for spying clever ways to play secular trends. Perhaps that's what his family office – Point72 Asset Management based in Stanford, Connecticut – saw in Broadcom (AVGO). 

Shares in the semiconductor and infrastructure software provider were up by a quarter for the year to date through early June, helped by exuberance over all things related to artificial intelligence (AI).

AI processors, whatever form they take, will require high-speed, low-cost connections between them, among other solutions. Broadcom, the bulls argue, is uniquely positioned to serve this market behind the scenes. While Nvidia (NVDA) hogs the AI spotlight, AVGO stock could be a less obvious way to play the disruptive technology. 

Whatever its reasons, Point72, with $172.1 billion in assets under management (AUM), initiated a position in AVGO in the first quarter. With 470,365 shares worth $623.4 million as of March 29, the stake is the fund's fifth largest position at almost 1% of its equity holdings.

Oracle

• Billionaire investor: David Tepper (Appaloosa Management)
• Stake value: $288.9 million
• Percent of portfolio: 4.3%

David Tepper accumulated an estimated net worth of $6.1 billion in part by having good timing. Such skills were certainly on display when his Appaloosa Management hedge fund (AUM $16.8 billion) upped its stake in Oracle (ORCL) by nearly three-quarters in Q1. 

Oracle stock gained more than 12% in March alone vs a 3% gain for the broader market over the same span.

Appaloosa, which has owned ORCL since the fourth quarter of 2023, held 2.3 million shares worth $288.9 million as of March 29. With a portfolio weight of 4.3%, ORCL is the New York hedge fund's 8th largest holding, up from 12th place the previous quarter.

Bulls contend that ORCL will benefit from secular AI trends, but Wall Street is somewhat split on the stock's prospects over the next 12 months or so. Analysts assign Oracle a consensus recommendation of Buy, albeit with mixed conviction, according to data from S&P Global Market Intelligence.

Alphabet

• Billionaire investor: Daniel Sundheim (D1 Capital Partners)
• Stake value: $358.2 million
• Percent of portfolio: 5.5%

Daniel Sundheim's D1 Capital Partners has made quite a name for itself during its six short years of existence. The New York hedge fund began trading with "only" $5 billion in capital. Today, D1 boasts more than $26.1 billion in AUM. 

Along the way, Sundheim built an estimated net worth of $2.9 billion, according to Forbes. In a nod to his precocious success, some wags call Sundheim the LeBron James of investing.

Sundheim in Q1 upped his fund's stake in Google parent Alphabet (GOOGL) by more than a fifth. D1 bought another 414,014 shares, bringing its total stake up to 2.4 million shares worth $358.2 million as of March 29. At 5.5% of the portfolio, GOOGL is the hedge fund's fifth largest holding. 

Alphabet stock beat the broader market by about 14 percentage points between the end of March and early June. Happily for Sundheim's clients, analysts see plenty more upside ahead. Wall Street gives shares a consensus recommendation just shy of Strong Buy, according to S&P Global Market Intelligence. 

Microsoft

• Billionaire investor: Stephen Mandel (Lone Pine Capital)
• Stake value: $812.0 million
• Percent of portfolio: 6.4%

It should come as no surprise that yet another billionaire investor bet big on yet another mega-cap tech stock in the first quarter of 2024. After all, all that buying pressure had to come from somewhere.

Stephen Mandel has held Microsoft (MSFT) since 2013, and he continued to add to the position as the company ran away with the title of world's most valuable publicly traded company.

Mandel's Greenwich, Connecticut-based Lone Pine Capital hedge fund ($17.3 billion AUM) – upped its MSFT stake by 6.5% in Q1. With 1.9 million shares worth $812 million as of March 29, MSFT is Lone Pine's third largest holding, accounting for more than 6% of its portfolio. 

Mandel amassed an estimated net worth of $2.5 billion by knowing when to ride a hot hand, so this is encouraging news for MSFT bulls. Microsoft has certainly been an outstanding long-term holding. Anyone who invested $1,000 in Microsoft stock 20 years ago should be thrilled with their returns today.

Amazon.com

• Billionaire investor: Philippe Laffont (Coatue Management)
• Stake value: $1.8 billion
• Percent of portfolio: 7.1%

Philippe Laffont's estimated net worth of $6.1 billion is due, at least in part, by knowing how to stick with winners. Such skills were certainly on display when Laffont's Coatue Management hedge fund (AUM $58.6 billion) upped its stake in Amazon.com (AMZN) by another 2.5% in the first quarter. 

Coatue, which has owned AMZN since the end of 2009, held 10.1 million shares worth $1.8 billion as of March 29, according to regulatory filings. With a portfolio weight of 7.1%, Amazon is the New York hedge fund's second largest position, up from fourth place a quarter ago.

If nothing else, Laffont finds himself in good company. Not only was Amazon added to the Dow Jones Industrial Average earlier this year, the tech, comms and retail giant counts itself among the top-ranked stocks in the blue chip index. 

Happily for long-term shareholders, Amazon has been generating market-bruising returns for ages. Indeed, anyone who put $1,000 into Amazon stock a couple decades ago has clobbered the S&P 500 by a wide margin. 

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