5 Best Innovative Stocks To Buy According To Hedge Funds

1.Amazon.com Inc (AMZN)
Amazon is by far the most popular stock ever among hedge funds.
During this crisis, the Internet has become the core operating system of our partially shuttered economy. eCommerce and logistics businesses like Amazon, UPS, FedEx, Uber Eats, DoorDash, Grubhub, and Instacart are now the backbone of the U.S. economy. Light Street’s largest position is in Amazon. Demand for food and home goods is exploding. People are nesting at home, adjusting to the new realities of working from home, and purchasing furniture and apparel to make the best of it. In-home entertainment services are flourishing, including streaming video and gaming, where Light Street is long Netflix and Activision respectively.
Amazon is poised to take the reigns as the world’s largest company and may never look back. The COVID-19 crisis is accelerating the adoption of online shopping around the world. Online grocery is hitting a notable inflection, with surveys indicating as high as 55% of consumers now buying online. Amazon Grocery is poised to more than triple from a $20 billion segment in 2019 to $80 billion by 2023. Amazon’s central role in our lives is perhaps best demonstrated by the adoption of Amazon Prime. Almost three in every four households in the U.S. are now members, approaching 90 million in total.
The optionality that comes with Amazon’s scale, including deeper forays into media, logistics, and overseas markets, should provide tailwinds to the stock for years to come.

2.Microsoft Corporation (MSFT)
Microsoft’s sprawling software and services portfolio has sustainable competitive advantages and durable long-term growth prospects, combined with more reasonable valuation as the stock has sold off from its all-time highs due to COVID19 disruptions. Although the Company ended the quarter at a +9% weighting in the Russell 1000 Growth Index benchmark.
Microsoft has a formidable position in productivity software, with between 80% and 90% market share, thanks to the multi decade dominance of Microsoft Office in both commercial and personal end markets. We estimate Office 365 subscriptions could generate a two to three times uplift in revenue per user and add an incremental $20 billion in revenue if Microsoft can manage to phase out perpetual licenses over the next several years. In addition, with a cloud-based delivery model, the Company can quickly develop and add new products and services to the Office 365 suite and monetize by adding higher pricing tiers – rather than waiting years at a time for a new product cycle for on-prem deployments. Microsoft’s newfound ability to quickly develop products, helps maintain its position in the productivity market, despite smaller, fast moving competitors.
Microsoft свърши отлична работа, затвърждавайки позицията си на решаващ доставчик на инфраструктурен софтуер и услуги, особено със своята cloud платформа Azure. Бизнесът продължава да прехвърля повече натоварвания върху платформи за инфраструктура като услуга (IaaS), тъй като IaaS позволява по-голяма гъвкавост на ИТ и има по-ниски капиталови ангажименти по отношение на хардуера и постоянните лицензи на помещенията.

3. Facebook Inc. (FB)
Facebook is another technology company that has a finger in many pies. One of the most exciting projects Facebook is involved in is its digital currency. Facebook’s main business of selling advertisements seems to be recession resistant.
Facebook е друга технологична компания, която е част от почти всичко. Един от най-вълнуващите проекти, в които Facebook участва, е неговата цифрова валута. Основният бизнес на Facebook за продажба на реклами изглежда е устойчив на рецесия.
Facebook’s revenues grew +12% constant currency despite the near total shutdown of economic activity during the month of April. The vast majority of Facebook’s revenues are derived from small businesses, many of which have borne the brunt of lockdowns. To combat the sudden disappearance of foot traffic, these businesses are initiating or accelerating the adoption of digital customer acquisition strategies provided by Facebook’s vast ecosystem, including instant access to over 2 billion daily users.

4. Alibaba Group Holding Ltd (BABA)
Alibaba faces bigger competition than Amazon and it is subject to significantly more political risk than Amazon. That’s probably why it is much cheaper than Amazon and that’s why it declined recently.
Latent potential in some of Alibaba’s businesses beyond the core e‐commerce marketplaces is still interesting – particularly the cloud computing business, Aliyun. China’s cloud computing industry remains nascent but is growing nearly 3x faster than its developed market counterparts through a combination of rising IT intensity, rapid cloud penetration, and a gradual moderation in software piracy. Within that market, Aliyun is increasingly dominant (with nearly 50% market share) and will generate dramatic profit growth as margins expand with scale. As one reference point, Aliyun today resembles Amazon’s AWS business five years ago; this is an encouraging comparison given that today, AWS’ operating profits (and estimated enterprise value) exceed Alibaba’s business in its entirety. Ant Financial – in which Alibaba holds a ~30% stake that is worth roughly $70 billion – has announced its intention to go public later this year. Alibaba shares will benefit further should they become accessible to mainland Chinese investors through inclusion in the Southbound Connect.

5. Visa Inc (V)
Visa is one of those stocks that never gets cheap enough for value investors to buy, yet the stock reaches a new high year after year.
Visa’s fiscal Q4 quarter (calendar Q3) results were better-than-expected as revenue and EPS beat street expectations driven by stabilizing domestic transaction volumes and good expense control. Although results showed continued pressures from depressed cross border volumes, which may continue for the foreseeable future as with MA, it is believed that the worst is behind us and our long-term thesis of V’s structural positioning on the other side of the pandemic remains intact. Looking to the back half of 2021 and going into 2022, we see a recovery in cross-border activity, which together with traditional spending improvements at the POS, leaves considerable room for upside upon reopening. Further, once the macro normalizes (medium term), it is believed that V (and MA) will continue to benefit from structural drivers including increased contactless payments, more eCommerce transactions, as well as a lift in the value-added services like fraud/gateway/marketing services, and demand for other flows such as B2B, G2C and use of Visa Direct. There is no credible competition on the horizon for the Visa/Mastercard payment networks.