Investors seem to have ignored all the panic around debt ceiling and are instead salivating over the possibility that the Federal Reserve might stop increasing interest rates. If the US government successfully raises the debt ceiling and avoids default, the stock market could continue its positive trajectory for a while longer. On May 3, the Federal Reserve increased interest rates for the 10th consecutive time. However, the Fed indicated that these hikes may have reached their conclusion, partly due to concerns within the banking system. According to Jerome Powell, the Chairman of the Federal Reserve, a reduction in bank lending would impede an economy that the central bank was already trying to regulate as part of a larger effort to control and alleviate high inflation.
Despite lingering worries about a potential recession in the later part of 2023, which have persisted for around 10 to 11 months, there is currently a sense of investor optimism. This is driven by satisfactory earnings in the first quarter and the possibility of the Federal Reserve temporarily halting interest rate hikes, which sets the stage for a strong market in June. The U.S. economy is also showcasing remarkable strength, as indicated by key factors like GDP and employment. According to the U.S. Bureau of Labor Statistics, there was a rise of 339,000 in total nonfarm payroll employment in May. However, the unemployment rate also increased by 0.3 percentage points to reach 3.7%. The sectors that experienced job gains included professional and business services, government, health care, construction, transportation and warehousing, and social assistance. Furthermore, the recent solid performance of financial, industrial, and material sectors disproves the notion of an impending economic slowdown, as these cyclical stocks normally drop in value before an economic downturn.
Morningstar's valuations suggest that investors can benefit from a portfolio that combines both value and growth investments, while reducing exposure to core investments. Both the value and growth categories are considered undervalued, although the growth category has become relatively less undervalued compared to the start of the year due to its strong performance so far. On the other hand, the core category is less appealing in comparison to the overall market average as it is closer to fair value. In terms of market capitalization, the valuations of large-cap stocks have slightly surpassed the market average due to their strong performance in the first quarter. On the other hand, mid-cap stocks are slightly below the overall market average in terms of valuations. However, small-cap stocks are notably undervalued, as they are currently trading at a significant 33% discount, as per Morningstar’s report.
Amid the stock market swings, billionaire investors exhibit a strong affinity towards lucrative investment opportunities in the realm of high-quality stocks. As per Insider Monkey’s data, some of the top stocks favored by billionaires during Q1 2023 included Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META).
Our Methodology
Insider Monkey tracks billionaire-owned stocks and in this article, we selected the top 10 stocks that attracted the highest number of billionaire investors during the first quarter of 2023. We have also mentioned the overall hedge fund sentiment towards each stock as of Q1 2023.
Uber Technologies, Inc. (NYSE:UBER), an American company focused on mobility technology, is a highly sought-after stock among billionaires. In Q1 2023, Uber Technologies, Inc. (NYSE:UBER)’s revenue of $8.8 billion climbed 27.5% year-over-year, beating Wall Street estimates by $90 million. Year-over-year, gross bookings experienced a growth of 19%, and the Mobility and Delivery adjusted EBITDA margins achieved their highest quarterly levels to date. The number of monthly active platform consumers increased by 13%, reaching a total of 130 million. This growth was primarily fueled by an ongoing enhancement in consumer engagement with Uber’s Mobility services.
According to Insider Monkey’s first quarter database, Uber Technologies, Inc. (NYSE:UBER) was part of 144 hedge fund portfolios, compared to 135 funds in the prior quarter. Billionaire David Tepper's Appaloosa Management held a $190.2 million stake in Uber Technologies, Inc. (NYSE:UBER) during Q1 2023.
In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), billionaires are loading up on Uber Technologies, Inc. (NYSE:UBER) shares.
RiverPark Large Growth Fund made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q1 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): Uber was a top contributor in the quarter following better-than-expected 4Q results and 1Q guidance. Gross Bookings grew 19% year over year to $31 billion, driven by 31% Mobility Gross Bookings growth and 6% Delivery Growth Bookings growth. 4Q Adjusted EBITDA of $665 million, up $579 million year over year, significantly beating management’s $600-$630 million guidance. Management guided to continuing growth in 1Q for Gross Bookings (20%- 24% growth) and Adjusted EBITDA (of $660-$700 million).
NVIDIA Corporation (NASDAQ:NVDA) is a technology company specializing in graphics processing units, computing, semiconductors, and artificial intelligence. Riding the wave of investor enthusiasm around artificial intelligence, NVIDIA Corporation (NASDAQ:NVDA) continues to experience a remarkable surge in its stock price, which could potentially push its valuation beyond $1 trillion if these gains persist.
On May 24, NVIDIA Corporation (NASDAQ:NVDA) reported a Q1 Non-GAAP EPS of $1.09 and a revenue of $7.19 billion, outperforming Wall Street estimates by $0.17 and $670 million, respectively. In fiscal year 2024's first quarter, NVIDIA distributed $99 million to its shareholders in the form of cash dividends. The company has announced that its upcoming quarterly cash dividend of $0.04 per share will be paid on June 30, to all shareholders recorded on June 8.
According to Insider Monkey’s first quarter database, 132 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), up from 106 funds in the prior quarter. Billionaire Rajiv Jain's GQG Partners is a prominent stakeholder of the company, with a position worth $2.3 billion. Additionally, Insider Monkey’s records suggest that NVIDIA Corporation (NASDAQ:NVDA) was part of 22 billionaire portfolios at the end of March 2023.
Alger Spectra Fund made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put. Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. As such, we believe Nvidia is a long-term high unit volume growth opportunity. During the period, NVIDIA reported fiscal fourth-quarter results that met expectations, as the company navigated. through an inventory correction associated with the broad macroeconomic slowdown. Moreover, management gave fiscal year earnings guidance that was better than analyst estimates. noting strong year-over-year growth in gaming and data centers. Management’s constructive assessment of 2023 prospects. coupled with the rapid rollout and adoption of generative Al offerings, led to positive share price performance.”
Visa Inc. (NYSE:V) was part of 24 billionaire portfolios at the end of Q1 2023. In the second fiscal quarter, the non-GAAP earnings per share of Visa Inc. (NYSE:V) reached $2.09, surpassing the average estimate of analysts at $1.99. Additionally, the net revenue for the quarter amounted to $7.99 billion, compared to the consensus estimate of $7.79 billion. The company's results for the fiscal Q2 exceeded expectations in terms of both revenue and earnings, exhibiting growth compared to the same period in the previous year. This positive outcome can be attributed to robust cross-border volume.
On May 1, Barclays analyst Ramsey El-Assal raised the firm's price target on Visa Inc. (NYSE:V) to $272 from $270 and reiterated an Overweight rating on the shares.
According to Insider Monkey’s first quarter database, 173 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 177 funds in the earlier quarter. Billionaire Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 19.3 million shares worth $4.3 billion.
Polen Global Growth Strategy made the following comment about Visa Inc. (NYSE:V) in its Q1 2023 investor letter:
“We trimmed Mastercard and Visa Inc. (NYSE:V) to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double[1]digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e[1]commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.
Alibaba Group Holding Limited (NYSE:BABA) is a highly favored stock among billionaires, with 25 billionaires holding the company's stock in the first quarter of 2023. On May 18, Alibaba Group Holding Limited (NYSE:BABA) reported a Q4 non-GAAP EPADS of $1.56, beating market estimates by $0.21. The revenue of $30.32 billion topped Wall Street consensus by $410 million.
After Alibaba Group Holding Limited (NYSE:BABA) reported its March quarter results and expressed positive expectations for user and order growth in the June quarter, BofA analyst Joyce Ju reaffirmed a Buy rating on the stock on May 19. However, the analyst lowered the firm's price target on the shares from $144 to $132. During the earnings call, Alibaba Group Holding Limited (NYSE:BABA) also revealed plans for a full spinoff of its Cloud unit, IPOs of Cainiao and Freshippo, and external financing for international e-commerce within the next 6 to 18 months.
According to Insider Monkey’s first quarter database, 128 hedge funds were long Alibaba Group Holding Limited (NYSE:BABA), compared to 113 funds in the prior quarter. Billionaire Lei Zhang's Hillhouse Capital Management is a prominent stakeholder of the company, with 3.7 million shares worth $386.7 million.
L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2023 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) (Long +16%) shares performed strongly based on favorable sentiment surrounding China’s re-opening and indications from Chinese authorities that the prolonged restructuring process of Alibaba/Ant Financial was finally drawing to a close. The company remains a high-quality business with leading positions in both eCommerce and Public Cloud. We exited our position in January at around US$116 per share with the shares having rallied more than 90% since their early November lows and our China re-opening catalyst having played out. We subsequently re-entered the position in March with the shares having pulled back and with the company announcing a new organizational and governance structure. Alibaba has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media and Entertainment Group. Each of these groups will be managed independently (separate CEO and board) and have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this announcement is a strong catalyst to unlock the inherent sum-of-the-parts valuation discount in the company.”
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. In the first quarter of 2023, 25 billionaires held stakes in UnitedHealth Group Incorporated (NYSE:UNH). On April 14, the company reported a Q1 non-GAAP EPS of $6.26 and a revenue of $91.9 billion, outperforming Wall Street estimates by $0.18 and $2.12 billion, respectively.
On May 25, Piper Sandler analyst Jessica Tassan initiated coverage of UnitedHealth Group Incorporated (NYSE:UNH) with an Overweight rating and a $580 price target. Piper Sandler believes that the Optum businesses within UnitedHealth Group Incorporated (NYSE:UNH) will play a crucial role in delivering consistent and exceptional earnings per share growth over the next ten years. The firm asserted that Optum will be the driving force shaping UnitedHealth's trajectory in the coming decade, serving as an increasingly important entry point to the broader enterprise.
According to Insider Monkey’s first quarter database, 116 hedge funds were bullish on UnitedHealth Group Incorporated (NYSE:UNH), compared to 110 funds in the earlier quarter. Billionaire Rajiv Jain’s GQG Partners is the biggest stakeholder of the company.
Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), UnitedHealth Group Incorporated (NYSE:UNH) is on the radar of billionaire investors.
Alger Spectra Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2023 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is an integrated healthcare benefits company uniquely positioned to address rising healthcare costs for its customers, due to its vertical integration, size, and scale. The Optum health benefits services unit, which accounts for approximately 45% of the company’s operating earnings, in our view, has the potential to grow even further as customers look for ways to manage rising healthcare costs. During the period, shares detracted from performance due to several factors: 1) many 2022 healthcare winners with shorter duration profiles and persistent earnings profiles, such as UnitedHealth Group. underperformed in the first quarter of 2023, 2) uncertainty surrounding Medicare Advantage reimbursement levels from the Federal government in 2023, which will be determined later in the year, and 3) increased regulatory scrutiny in the form of potential Medicare Advantage audits across the industry. While these concerns have impacted UnitedHealth in the near-term, we believe company fundamentals remain intact given its large scale business model, competitive advantages, and medium to long- term growth prospects.”
