In this article we will take a look at the 10 tech stocks Chinese billionaire Chen Tianqiao loves. You can skip our detailed analysis of Tianqiao's history, investment philosophy, and hedge fund performance, and go directly to 5 Tech Stocks Chinese Billionaire Chen Tianqiao Loves.
Billionaire and Chinese online gaming pioneer Chen Tianqiao is the founder and chief executive officer of the investment firm, Shanda Asset Management. Born in the province of Zhejiang, Chen Tianqiao was one of China's rising stars in the realm of business. He earned his B.A as an Economics major from Fudan University, and went on to establish Shanda Interactive Entertainment Ltd in 1999, the first Chinese online gaming company that was listed in the United States on May 2004, becoming the largest internet company in China based on market capitalization that year. After Chen Tianqiao sold the entirety of his stake in Shanda Group in 2014, the billionaire set his sights on investments.
Shanda Asset Management, as an investment fund, manages more than $1.22 billion in its investment portfolio. Shanda Asset Management's portfolio is diversified across 8 sectors, including the Technology and Healthcare sectors, with the Consumer Discretionary sector proving to the heaviest, making up 39.2% of the fund’s total portfolio. A majority of the companies in the fund’s portfolio are large-cap stocks, with stocks sizing up to more than $10 billion in market cap making up 57% of the total holdings value.
Some of the top stocks in the investment portfolio of Shanda Asset Management at the end of the second quarter of 2021 include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Facebook, Inc. (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL), among others discussed in detail below.
Shanda Asset Management also likes to take advantage of market volatility, with a strategy that involves buying stocks on the dip and selling when they reach their fair value. An example of this practice can be seen when Chen Tianqiao initiated a position in Zoom Video Communications, Inc. (NASDAQ:ZM) during the December quarter of 2019 and then sold his entire stake in the fourth quarter of 2020 in a bid to capitalize on the massive profits. In the second quarter of 2021, Shanda Asset Management has increased its stake in the software communications company once again, by 67%.
With this background in mind, let us now look towards the 10 tech stocks Chinese billionaire Chen Tianqiao loves. We made use of Shanda Asset Management's 13F portfolio for the second quarter for this analysis.
Why should we pay attention to Chen Tianqiao's stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Tech Stocks Chinese Billionaire Chen Tianqiao Loves
10. Facebook, Inc. (NASDAQ:FB)
Tianqiao's Stake Value: $11.3 million
Percentage of Chen Tianqiao's 13F Portfolio: 0.92%
Number of Hedge Fund Holders:266
Facebook, Inc. (NASDAQ:FB) is a multinational social networking services company based in Menlo Park, California. Ranked tenth on the list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves, Facebook, Inc. (NASDAQ:FB) has a market capitalization of $956.89 billion.
According to the recent 13F Filings, Shanda Asset Management holds owns 32,500 shares in Facebook, Inc. (NASDAQ:FB), amounting to $11.3 million in worth and accounting for 0.92% of the fund’s portfolio. At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ:FB), compared to 257 in the previous quarter with stakes amounting to $40 billion in worth.
In the second quarter of 2021, Facebook, Inc. (NASDAQ:FB) reported an EPS of $3.61, beating estimates by $0.58. Facebook, Inc. (NASDAQ:FB) also reported revenues amounting to $29.08 billion, surpassing forecast estimates by $1.19 billion.
On September 17, Jefferies analyst Brent Thill raised the his price target on Facebook, Inc. (NASDAQ:FB) to $440 from $425 and kePT a Buy rating on the shares, noting that the stock had outperformed Nasdaq.
“Leading contributors in the First Eagle Global Fund this quarter included Facebook, Inc. Class A. Facebook has continued to post impressive results for both revenue and active users of its traditional platforms. In the meantime, the social media giant continues to make progress on new initiatives—like Facebook Horizon (virtual reality) and Facebook Shops (e-commerce)—and maintains attractive monetization optionality around services like Messenger and WhatsApp.”
9. Salesforce.com, Inc. (NYSE:CRM)
Tianqiao's Stake Value: $12.2 million
Percentage of Chen Tianqiao's 13F Portfolio: 0.99%
Number of Hedge Fund Holders: 108
Salesforce.com, Inc. (NYSE:CRM) is a cloud-based software company headquartered in San Francisco, California. Some of the services provided by the company include customer service, application development and analytics. The software tech company ranks ninth on the list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves.
Chen Tianqiao's Shanda Asset Management currently owns 50,000 shares of Salesforce.com, Inc. (NYSE:CRM), worth $12.2 million and representing 0.99% of the fund’s total portfolio. At the end of the second quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $11.7 billion in Salesforce.com, Inc. (NYSE:CRM), compared to 91 hedge funds in the previous quarter with stakes worth $8.8 billion.
The company last released its earnings report on August 24, 2021, with a reported earning of $1.48 per share on an adjusted basis, beating the consensus forecast of $0.93 per share by $0.55. The company also reported a revenue of $6.34 billion for that quarter.
On September 24, RBC Capital analyst Rishi Jaluria raised the his price target on Salesforce.com, Inc. (NYSE:CRM) to $325 from $310 and kept an Outperform rating on the shares.
“Part 5: A New Investment in Salesforce.com
The assertion that mega caps can also be mispriced is a good segue to our second new investment in Salesforce.com. Salesforce is one of the largest software companies in the world with a market value of around US$ 250 bn. It is best known for its customer relationship management or “CRM” solution, known as its Sales Cloud. It has three additional clouds (“Service,” “Marketing” and “Commerce”) as well as a thriving platform business with both owned and 3rd party software solutions.
I first came across Salesforce in 2013. I was invested in Bechtle, a German company that provides companies with their in-house IT. I kept hearing about a strange new concept called “the Cloud” and wanted to get up to speed on the topic in case it was a risk to Bechtle. As a result, I picked up a copy of “Behind the Cloud”. It documents how Salesforce.com pioneered cloud-based software and revolutionised the software industry.
Since then, I have followed Salesforce from a distance and visited it several times in San Francisco. I did not consider it seriously as an investment though as for much of the period, I had not yet overcome my aversion to loss-making companies.
This changed in December last year when Salesforce announced the acquisition of Slack (a former investment of the Business Owner Fund, described in my 2020 half-year letter) for US$ 27 bn. On the date of announcement, Salesforce’s market value fell by around US$ 20 bn. Effectively, the market was saying that Slack was almost worthless, which, as an enthusiastic owner of Slack, I disagreed with. Initially, I decided to keep our Slack stock and roll it into Salesforce (as part of the consideration was in Salesforce’s own stock). As Salesforce’s price fell further in the subsequent months, I bought its stock directly to make it a full-size position post the closing of the Slack acquisition…” (Click here to see the full text)
8. NVIDIA Corporation (NASDAQ:NVDA)
Tianqiao's Stake Value: $16 million
Percentage of Chen Tianqiao's 13F Portfolio: 1.3%
Number of Hedge Fund Holders: 86
NVIDIA Corporation (NASDAQ:NVDA) is a multinational technology company based in California that designs graphics processing units alongside chip units and semiconductors for gaming and professional purposes. The tech company is ranked eighth on our list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves.
Chen Tianqiao's hedge fund holds 80,000 shares of NVIDIA Corporation (NASDAQ:NVDA), worth $16 million, representing 1.3% of the fund’s total investment portfolio. Shanda Asset Management had increased its stake in the company by 700% in the second quarter of 2021. According to our database, 86 hedge funds out of the 873 tracked by Insider Monkey held stakes in NVIDIA Corporation (NASDAQ:NVDA), worth roughly $9.09 billion. This is compared to 80 hedge funds in the previous quarter with a total stake value of approximately $6.2 billion.
In the second quarter of 2021, NVIDIA Corporation (NASDAQ:NVDA) reported earnings per share of $0.55, beating market estimates by $0.05. The company also reported revenues generated amounting to $3.87 billion, an increase of 49.90% on a year-over-year basis, crossing forecast estimates by $210.22 million.
On September 17, BofA analyst Vivek Arya raised the his price target on NVIDIA Corporation (NASDAQ:NVDA) to $275 from $260 and kept a Buy rating on the shares.
“Within IT, shares of US-based computer chip developer NVIDIA continued their climb as rising demand across segments-from work-from-home laptops to data centers to cryptocurrency mining rigs-led to shortages that translated into surging prices for its chips. Such was the windfall that NVIDIA even made technical changes to some of its products to make them towards waht it believes are more sustainable uses. Less attractive to cryptocurrency miners, to steer scarce supply viewed by geography, the lion’s share of excess returns came from good stock performance in the US. In addition to the contributions from NVIDIA and our health care holdings, a pair of IT software and service providers also aided relative returns.”
7. Zoom Video Communications, Inc. (NASDAQ:ZM)
Tianqiao's Stake Value: $19.3 million
Percentage of Chen Tianqiao's 13F Portfolio: 1.57%
Number of Hedge Fund Holders: 59
Zoom Video Communications, Inc. (NASDAQ:ZM) is a communications technology company that provides a videotelephony platform and online chat services that are used for teleconferencing, telecommuting, and social interactions. The California-based company ranks seventh on the list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves.
For the second quarter of 2021, Zoom Video Communications, Inc. (NASDAQ:ZM) reported earnings per share of $0.92, crossing estimates by $0.47. The company also reported revenues amounting to $663.52 million, an increase of 355.01% on a year-over-year basis, surpassing market predictions by $163.16 million.
At present, Shanda Asset Management holds 50,000 shares of Zoom Video Communications, Inc. (NASDAQ:ZM), amounting to $19.3 million in worth and representing 1.57% of the fund’s portfolio. By the end of the second quarter of 2021, 59 hedge funds out of the 873 tracked by Insider Monkey held stakes in Zoom Video Communication, Inc. (NASDAQ:ZM), worth $8.48 billion. This is compared to 54 hedge funds in the previous quarter with a total stake value of approximately $5.67 billion.
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
6. Uber Technologies, Inc. (NYSE:UBER)
Tianqiao's Stake Value: $20 million
Percentage of Chen Tianqiao's 13F Portfolio: 1.63%
Number of Hedge Fund Holders: 135
Uber Technologies, Inc. (NYSE:UBER) more commonly known simply as Uber, is a technology company that provides transportation, food delivery, package delivery and courier services. The company has a market capitalization of $84.42 billion, and is ranked sixth on the list of the 10 tech stocks Chinese billionaire Chen Tianqiao loves.
Uber Technologies, Inc. (NYSE:UBER) released its quarterly earnings report for the second quarter of 2021 on August 4. The declared EPS by the company was $0.58, beating the estimates by $1.07. The revenue generated was $3.93 billion, which beats the forecast estimated revenue of $3.76 billion by $167.18 million.
Chen Tianqiao presently holds 400,000 shares of Uber Technologies, Inc. (NYSE:UBER), worth over $20 million, and representing 1.63% of his hedge fund's total investment portfolio. By the end of the second quarter of 2021, 135 hedge funds out of the 873 tracked by Insider Monkey held stakes in Uber Technologies, Inc. (NYSE:UBER), worth $10.4 billion, up from 130 hedge funds in the preceding quarter that had a total stake value of approximately $1.05 billion.
RiverPark Funds, an investment fund, mentioned Uber Technologies, Inc. (NYSE:UBER) in its Q2 2021 investor letter. Here is what the fund said:
“UBER was our top detractor for the quarter. Delivery growth remains strong, and ride-sharing has started to recover, though still down year over year (vs. pre-COVID results). Gross bookings grew 24% year over year, driven by 166% Delivery growth.
Despite the COVID disruption, UBER remains the undisputed global leader in ride-sharing, with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery (64% of 1Q21 revenue), where it is number one or two in the more than 25 countries in which it operates. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 100 million users (by comparison, Amazon Prime has 130+ million members) and penetrate new markets of ondemand services, such as grocery delivery, truck brokerage and worker staffing for shift work. Its New Verticals (non-food delivery such as grocery, convenience, and alcohol) business hit a $3 billion annualized run rate in March, up 77% quarter over quarter.
UBER, at its current $91 billion market capitalization, trades at 4x next year’s revenue from its two core businesses. Additionally, the company has substantial, unrecognized, value in its several nascent development businesses and another $13 billion in equity stakes in synergistic businesses around the world.”
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Disclosure: None. 10 Tech Stocks Chinese Billionaire Chen Tianqiao Loves is originally published on Insider Monkey.