5 Hot Tech Stocks

1. Microsoft Corporation (NASDAQ: MSFT)
Microsoft is the world’s biggest software company. In fiscal first quarter of 2021, the company posted a net income of $13.9 billion on revenue of $37.2 billion. The company’s Cloud platform Azure is expanding at a rapid pace. Azure public cloud for hosting applications and websites grew 48% in the quarter. Its Intelligent Cloud segment, which includes Azure, Enterprise Services, GitHub and server posted a revenue of $12.99 billion, up 20% year over year and more than the $12.73 billion consensus estimate.

Hedge funds are extremely bullish on Microsoft, with 234 funds having long positions in the company as of the end of the third quarter. The net worth of these stakes is $42.1 billion.

2. Salesforce.com, inc. (NYSE: CRM)
Salesforce sells Cloud-based customer relationship management software that helps small and large businesses keep track of their customers, leads, invoicing, billing and communications. Evercore ISI recently named Salesforce stock as one of its top picks for 2021 on the back of an increased digital spending worldwide. The firm believes that the growth in the IT sector would not recede even after the pandemic. Salesforce made headlines in 2020 after it bought communications application Slack for $27.7 billion, striking a major deal in the history of the industry.

As of the end of the third quarter, Ken Fisher’s Fisher Asset Management owns 11.89 million shares of Salesforce. Overall, 106 hedge funds held long positions in Salesforce entering the fourth quarter. Here is what Alger Spectra Fund said:

“Salesforce.com is a leading software-as-a-service company with turnkey salesforce productivity and customer relationship management applications as well as a cloud-based development environment. Increased spending on technology by corporations digitizing their business models supported the performance of salesforce.com shares. We believe the return on investment (ROI) from deploying salesforce.com technology is compelling because the company’s products make enterprises more productive and profitable while fostering growth. This attractive ROI has resulted in the company’s continuing high unit volume growth.”

3. Adobe Inc (NASDAQ: ADBE)
California-based Adobe has become a household name because of its multimedia and design products, such as Photoshop, Adobe Illustrator and Adobe After Effects. In fiscal fourth quarter, Adobe’s revenue jumped 14% on a year-over-year basis to reach $3.42 billion. Creative segment revenue came in at $2.08 billion, while Document Cloud sales totaled $411 million. For fiscal 2021, the company expects $15.15 billion in revenue, compared to the Wall Street estimate of $12.81 billion.

Adobe ranks 3rd on the list of 10 best software stocks to buy now, as 106 hedge funds held stakes in the company as of the end of the September quarter. Here is what Nelson Roberts Investment Advisors said about ADBE:

“We purchased Adobe (NASDAQ: ADBE), the leading provider of content creation software. Adobe is a software company with a recurring revenue stream, which should insulate it from some of the negative effects of the COVID-19 outbreak.”

4. ServiceNow Inc (NYSE: NOW)
ServiceNow is a Platform-as-a-Service software company, offering IT service management, incident response, enterprise software management, operations management and error reporting systems. In the third quarter, ServiceNow said its revenue jumped 30% to reach $1.15 billion, above the Wall Street’s estimates of $1.11 billion. For the fourth quarter, the company expects subscription revenue of $1.155 billion to $1.16 billion, up 28% to 29% year over year.

A total of 82 hedge funds reported owning stakes in ServiceNow at the end of the third quarter. Stephen Mandel’s Lone Pine Capital is one of the biggest shareholders of ServiceNow, with 1.77 million shares, worth $858.89 million.

5. Zoom Video Communications Inc (NASDAQ: ZM)
California-based Zoom gained popularity after the pandemic as millions of individuals and businesses flocked to the app to remotely communicate with each other. Zoom has 300 million daily meeting participants. The company made its debut on the U.S. stock exchange in April 2019. Zoom shares rallied recently after the company said it reached a milestone of 1 million Zoom Phone seats sold.

Jim Simons’ Renaissance Technologies is one of the 56 hedge funds having stakes in Zoom as of the end of the third quarter. The net worth of these stakes is $9.72 billion. Here is what a buyside fund recently said about ZM:

“Zoom Video Communications provides a cloud-native, video-first communications platform that transforms how people communicate, interact and work together. It offers a better experience with easy onboarding and use, and it addresses enterprise needs around scalability, cost and minimal IT involvement. The company is a leader and household name in video communication and is benefiting from the explosive growth of remote working and learning from home resulting from Covid¬19 social distancing. Shares of Zoom outperformed after the company said its fiscal second quarter exceeded consensus expectations and raised its fiscal-year 2021 guidance for revenues and profitability. We believe Zoom is currently well positioned to benefit from the ongoing high levels of remote working and learning at home. Additionally. it is continuing to capture market share and its launch of Zoom Phone and Zoom Rooms has expanded its market. The company is also increasing its penetration within enterprises and is expanding internationally.”