You probably won't be surprised to learn that shares of Magnificent Seven stock are among the most commonly held among billionaire hedge fund managers. Nvidia (NASDAQ:NVDA) and alphabet (NASDAQ:Google)(NASDAQ:GOOG) It's a very common holding, as are some other mega-cap tech stocks.
But it might be more interesting to see what tech billionaires think the stock could become. Next Big thing. Here are three tech stocks owned by America's most prominent hedge funds that have the potential for big growth in the coming years.
Metaverse play with great potential
roblox (NYSE: RBLX) is a major holding in Ken Griffin's Citadel hedge fund, which owns nearly $400 million in stakes in the gaming platform provider. While the progress of the Metaverse gaming platform is certainly impressive, it may still be in its early stages of growth.
At the end of 2023, Roblox had 71.5 million daily active users (DAU) on its platform, an increase of 22% year over year. Management believes this can grow to 1 billion DAU over time, especially as wearable technology evolves and Roblox establishes a presence in populous international markets. The global Metaverse market is expected to grow from $90 billion in 2023 to nearly $1 billion by 2030, and Roblox could be one of the biggest winners. .
Roblox has made great efforts to improve operational efficiency and expects to achieve positive free cash flow in 2024 and grow margins by 100 to 300 basis points annually through at least 2027. Additionally, the management team has done a great job of: Finding new ways to monetize the platform, such as immersive advertising.
One of the biggest growth areas in the technology sector
Jim Simmons' hedge fund Renaissance Technology has a $450 million stake in cybersecurity platform cloud strike (NASDAQ: CRWD). While AI has been the center of attention so far in 2024, cybersecurity remains a massive and long-term opportunity.
CrowdStrike is a leader in cloud-based cybersecurity and an early AI leader, using this technology to develop the best threat detection capabilities on the market. And as the company grows, its capabilities will become even stronger. After all, the company uses crowdsourced data (hence the name) to learn and discover security issues.
Currently, CrowdStrike generates over $3.4 billion in annual recurring revenue, but this may just be the starting point. Management sees a $100 billion market opportunity for this business, but with the rapid growth and evolution of the cybersecurity industry, the market size will grow to $225 billion within the next few years and cloud Strike believes it can reach a market size of $10 billion. He is ARR until the end of this decade.
Social media platforms with huge potential
social media platform pinterest (New York Stock Exchange: PING) is the largest technology stock owned by Paul Singer's Elliott Management, by a wide margin.
Pinterest's business has been very strong lately, recovering nicely from the slowdown in growth after the pandemic-era surge subsided. The user base reached 498 million at the end of 2023, an 11% year-over-year increase, and the company was highly profitable with adjusted EBITDA growth of 86% year-over-year in the fourth quarter.
There are several promising growth avenues. CEO Bill Ready is relatively new to the job and has made some exciting moves to increase Pinterest's e-commerce potential. Additionally, while Pinterest generates the majority of its revenue from users in North America, international users actually make up about 80% of its total, meaning there is significant monetization potential in the coming years. Also worth noting.
Three businesses with high future potential
Admittedly, I never recommend investing in any particular stock. just Because certain billionaires and hedge funds do it. But these three are great businesses with big market opportunities, great leadership, and strong momentum, and they might be worth taking a closer look at your portfolio now.
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Suzanne Frey, an Alphabet executive, is a member of the Motley Fool's board of directors. Matt Frankel has positions on Pinterest and Roblox. The Motley Fool has positions in and recommends Alphabet, CrowdStrike, Nvidia, Pinterest, and Roblox. The Motley Fool has a disclosure policy.
3 Tech Stocks with Big Potential Billionaire Investors Love Originally published by The Motley Fool
