You probably won’t be surprised to learn that some of the Magnificent Seven’s stocks are among the most common holdings among billionaire hedge fund managers. Nvidia (NASDAQ:NVDA) And Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) are extremely common stocks, as are several other large-cap tech stocks.
However, it may be more interesting to see which tech stocks billionaires think are most important. following big things. Here are three tech stocks, owned by some of the largest hedge funds in the United States, that could have huge growth potential in the years to come.
A metaverse game with huge potential
Roblox (NYSE:RBLX) is a major holding of Ken Griffin’s Citadel hedge fund, which owns nearly $400 million in shares of the gaming platform provider. And while the metaverse gaming platform’s progress has certainly been impressive, it might still be in the early stages of growth.
At the end of 2023, Roblox had 71.5 million daily active users (DAU) on its platform, 22% more than a year earlier. Management believes it could increase this figure to 1 billion DAU over time, particularly as wearable technology evolves and Roblox builds its presence in high-population 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 is doing a great job of improving its business efficiency and hopes to achieve positive free cash flow in 2024 and increase its margins by 100 to 300 basis points per year through at least 2027. Additionally, management is doing 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
Renaissance Technology – the hedge company led by Jim Simons – has a $450 million stake in the cybersecurity platform Crowd strike (NASDAQ:CRWD). And while AI has been the center of attention so far in 2024, cybersecurity remains a massive and long-lasting opportunity.
CrowdStrike is a leader in cloud-based cybersecurity and was an early leader in AI, using this technology to develop market-leading threat detection capabilities. And as the company grows, its capabilities become even stronger. After all, the company uses crowdsourced data (hence the name) to learn about and detect security issues.
CrowdStrike now generates more than $3.4 billion in annual recurring revenue, but that might just be a starting point. Management sees a $100 billion exploitable market opportunity for the company, but with the rapid growth and evolution of the cybersecurity industry, it estimates that over the next few years the market will reach $225 billion and that CrowdStrike can reach $10 billion. ARR by the end of this decade.
A social media platform with great potential
Social media platform Pinterest (NYSE:PIN) is the largest tech stock owned by Paul Singer’s Elliott Management, by far.
Pinterest’s business has performed quite well recently, rebounding well from a slowdown in growth following the end of the pandemic surge. The user base reached 498 million by the end of 2023, up 11% from a year earlier, and the company was far more profitable with 86% year-over-year adjusted EBITDA growth. ‘other in the fourth quarter.
There are several promising avenues for growth. CEO Bill Ready is relatively new to the role and has made some exciting moves to boost Pinterest’s e-commerce potential. And it’s also worth noting that while Pinterest makes most of its money from North American users, international users actually make up about 80% of the total and have huge monetization potential in the coming years.
Three companies with great potential
Of course, I would never suggest investing in any particular stock. just because a certain billionaire or hedge fund does it. But these are three great companies that offer significant market opportunities, excellent leadership, and strong momentum, and they might be worth a closer look for your portfolio right now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matt Frankel has posts on Pinterest and Roblox. The Motley Fool has positions…
