In this article, we take a look at billionaire Cliff Asness’s top 10 stock picks. If you want to see more of billionaire Cliff Asness’s top 10 tech stocks, head straight to Billionaire Cliff Asness’s top 5 tech stocks.
Billionaire Cliff Asness is the founder of quantitative giant AQR Capital Management, which had over $40 billion in a 13F stock portfolio as of late September.
As a quantitative fund, AQR Capital Management uses sophisticated data models and intensive calculations to decide what to buy and what to sell. Given the fund’s massive size and Asness’s belief in diversification, AQR Capital Management has thousands of positions and regularly switches in and out of stocks each quarter.
Given the size of the technology sector in the United States, AQR Capital Management has significant positions in many leading technology stocks.
For example, in terms of the S&P 500 index, the technology sector made up 28% of the index in April 2022, or more than the combined weight of the healthcare and consumer discretionary sectors.
In AQR Capital Management’s portfolio, tech stocks make up 7 of the fund’s top 10 holdings.
Technology stocks make up a significant percentage of the S&P 500, as well as AQR Capital Management’s top positions, due to the industry’s growth over the past thirty years.
With technological advances in semiconductors, computers and smartphones have become more affordable over time. With billions more potential customers, some software, hardware, and Internet companies have grown significantly as a result. With their size, these companies have created even more useful services that have attracted more people to buy computers and smartphones.
Given the cycle, some software, hardware, and internet companies have emerged as some of the most valuable companies in the world that many investors want in their portfolios.
2022
Due to high inflation, the US Federal Reserve has hiked interest rates six times in 2022 alone, and many analysts expect the US Federal Reserve to hike rates further.
Despite core inflation coming in lower than expected in October, San Francisco Federal Reserve Chair Mary Daly said in mid-November that she expects interest rates to rise by at least a percentage point, or possibly more, before the Federal Reserve pauses to assess the inflationary struggle.
As interest rates have risen, Treasury rates have risen significantly, and as a result, capital has migrated from big tech stocks to Treasuries. Capital flows have seen many large tech stocks fall significantly year-to-date. If the economy slows more than expected going forward, there could be more downside in the near term.
Given the uncertainty, it might be a good idea for long-term investors to own a well-diversified portfolio of stocks across many different sectors.
Cliff Asness of AQR Capital Management
methodology
For our list of top 10 technology stocks by billionaire Cliff Asness, we selected 10 technology stocks from AQR Capital Management’s top stock holdings as per Q3 2022 13F filings.
We ranked them based on AQR Capital Management’s stake in the shares at the end of September.
Billionaire Cliff Asness’s top 10 tech stocks
10. Texas Instruments Incorporated (NASDAQ:TXN)
Holding value of AQR Capital Management as of September 30: $200,116,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.48%
AQR Capital Management reduced its position in Texas Instruments Incorporated (NASDAQ:TXN) by 10% to end the quarter with a stake worth about $200 million. Since Sept. 30, the semiconductor company’s shares have rebounded on the broader market rally, despite the company’s weaker-than-expected fourth-quarter guidance.
Baron Funds commented on Texas Instruments Incorporated (NASDAQ:TXN) in a third-quarter 2022 investor letter:
Shares of Texas Instruments Incorporated (NASDAQ:TXN), the world leader in analog semiconductors, rose 1% in the quarter after the company reported strong financial results, with revenue growing 14% year over year and operating profit growing 23%, and Operating margins of 52%. While uncertainty over near-term revenue and free cash flow trends has increased due to a potential macroeconomic slowdown and supply chain normalization, Texas Instruments has a long history of growing free cash flow per share across market cycles to drive shareholder value. We remain investors and believe Texas Instruments will benefit from growth in semiconductor content across a broader range of end markets and applications. In addition, we believe the company can sustain its competitive advantages over the long term, based on its manufacturing technology and processes, its broad product portfolio, the reach of its go-to-market organization, and the diversity and longevity of its products.
Along with Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), Texas Instruments Incorporated (NASDAQ:TXN) is one of billionaire Cliff Asness’s top tech holdings AQR Capital Management End of Q3 2022.
9. Arrow Electronics, Inc. (NYSE:ARW)
Holding value of AQR Capital Management as of September 30: $207,532,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.5%
Arrow Electronics, Inc. (NYSE:ARW) is one of AQR Capital Management’s largest technology holdings given the fund’s equity value of over $207 million at the end of September. Arrow Electronics, Inc. (NYSE:ARW), which provides products and services for industrial and commercial users of electronic components and enterprise computing solutions, has not performed well in 2022 as shares are down 19.5% year-to-date are. Still, shares of Arrow Electronics, Inc. (NYSE:ARW) have risen since the end of the third quarter thanks to the broader market rally.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
AQR Capital Management holding value as of September 30: $335,677,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.81%
AQR Capital Management increased its position in Cisco Systems, Inc. (NASDAQ:CSCO) by 22%, ending the quarter with a stake of over $335 million in the computer networking giant. For the first quarter, Cisco Systems, Inc. (NASDAQ:CSCO) reported adjusted earnings per share of $0.86 on sales of $13.6 billion versus consensus of $0.84 on a Revenue of $13.31 billion. For FY23, Cisco Systems, Inc. (NASDAQ:CSCO) is forecasting adjusted earnings per share of $3.51-$3.58 versus the previous $3.49-$3.56.
7. Meta Platforms, Inc. (NASDAQ:META)
AQR Capital Management holding value as of September 30: $356,988,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.87%
Meta Platforms, Inc. (NASDAQ:META) is no longer in the top 10 most valuable companies in the world given its significant year-to-date decline. Still, Meta Platforms, Inc. (NASDAQ:META) ranks among the top 10 largest holdings for AQR Capital Management’s 13F stock portfolio as of the end of the third quarter, given the fund’s over $356 million stake in the social media giant U.S. dollar. Meta Platforms, Inc. (NASDAQ:META) faces competition from TikTok, but it still has long-term growth potential.
6.Tesla, Inc. (NASDAQ:TSLA)
Holding value of AQR Capital Management as of September 30: $381,898,000
Percentage of AQR Capital Management’s 13F portfolio as of 09/30: 0.93%
Tesla, Inc. (NASDAQ:TSLA) stock has fallen lately due to CEO Elon Musk’s purchase of Twitter. Given the distractions, some longtime Tesla, Inc. (NASDAQ:TSLA) shareholders have likely taken profits as the stock has still recovered significantly over the past 10 years. However, AQR Capital Management increased its position in Tesla, Inc. (NASDAQ:TSLA) by 327% in the third quarter, ending the quarter with a stake worth nearly $382 million.
Such as Tesla, Inc. (NASDAQ:TSLA), Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL) are top tech holdings owned by AQR Capital Management at billionaire Cliff Asness end of the third quarter.
Click here to read on for billionaire Cliff Asness’s top 5 stock picks.
Suggested articles:
Disclosure: None. Billionaire Cliff Asness’s top 10 tech stocks was originally published on Insider Monkey.
