Retirement Stock Portfolio: 11 Safe Tech Stocks to Consider
In this article, we discuss the 11 safe tech stocks for a retirement stock portfolio. If you want to read about some more tech stocks, go directly to Retirement Stock Portfolio: 5 Safe Tech Stocks to Consider. There is broad-based consensus among finance professionals that the traditional definitions of growth and value stocks do hold-up […]
Retirement Stock Portfolio: 11 Safe Tech Stocks to Consider
In this article, we discuss the 11 safe tech stocks for a retirement stock portfolio. If you want to read about some more tech stocks, go directly to Retirement Stock Portfolio: 5 Safe Tech Stocks to Consider.
There is broad-based consensus among finance professionals that the traditional definitions of growth and value stocks do hold-up very well in the present economy. This is because the technology sector has disrupted almost every major industry and is now a critical part of the overall economy, and firms like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA) are now established businesses with strong profiles that are not, in the ordinary sense of the word, exclusively growth-oriented.
There are examples which illustrate this point. Peter Thiel, a famous entrepreneur, grew a $1,700 investment in tech stocks to a multi-billion dollar tax-free payout over the course of two decades. During the pandemic, the shift towards digital also demonstrated the safety of tech stocks as businesses altered their models to incorporate the changing consumer demands. Investors are now discarding value sectors like utilities and consumer goods in favor of tech-led disruptors for better returns in the long-term.
Our Methodology
The companies that operate in the technology sector and have established business models that have demonstrated historical resilience against inflationary headwinds were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Ruben Sukatendel on Unsplash
Retirement Stock Portfolio: Safe Tech Stocks to Consider
11. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 56
Gilead Sciences, Inc. (NASDAQ:GILD) a biotech company that discovers, develops, and commercializes medicines. It is one of the best safe tech stocks for a retirement stock portfolio. On October 31, Maxim analyst Jason McCarthy maintained a Buy rating on Gilead Sciences, Inc. (NASDAQ:GILD) stock and raised the price target to $92 from $84, noting that the company's third quarter results were strong due to the Veklury and HIV franchise.
Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrow Street Capital is a leading shareholder in Gilead Sciences, Inc. (NASDAQ:GILD) with 12 million shares worth more than $742.5 million.
Just like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA), Gilead Sciences, Inc. (NASDAQ:GILD) is one of the safe tech stocks for a retirement portfolio.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Gilead Sciences, Inc. (NASDAQ:GILD) was one of them. Here is what the fund said:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences, Inc. (NASDAQ:GILD)’s remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
10. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 74
Micron Technology, Inc. (NASDAQ:MU) designs, manufactures and sells memory and storage products worldwide. It is one of the top safe tech stocks for a retirement stock portfolio. On October 4, Micron Technology said that it would spend $100 billion on a massive new chip making facility in upstate New York in another sign that new federal investments are stimulating domestic investment in the semiconductor industry.
On October 13, Loop Capital analyst Charles Park initiated coverage of Micron Technology, Inc. (NASDAQ:MU) stock with a Buy rating and $70 price target, noting that the key metrics show that the memory industry is nearing a bottom and the risk/reward appears favorable.
At the end of the third quarter of 2022, 74 hedge funds in the database of Insider Monkey held stakes worth $2.5 billion in Micron Technology, Inc. (NASDAQ:MU), compared to 69 in the preceding quarter worth $2.2 billion.
In its Q2 2022 investor letter, Meridian Funds, an asset management firm, highlighted a few stocks and Micron Technology, Inc. (NASDAQ:MU) was one of them. Here is what the fund said:
“Micron Technology, Inc. (NASDAQ:MU) is a leader in the production of DRAM and NAND memory. We invested in the stock in the third quarter of 2019 during a cyclical downturn in the memory industry. Our rationale was that, while the memory industry is cyclical, we believed there are strong secular drivers in place that will lead to higher peaks and long-term growth. Our secular thesis is based on our conviction that the quest for ever-increasing compute speeds will increasingly rely on memory to solve bottlenecks and that increased memory content in nearly everything from mobile phones to automobiles will drive demand. Micron’s stock traded lower during the quarter due to macroeconomic concerns that led to lower earnings expectations. We increased our stake in the company, as we believe our secular thesis remains intact. We wanted to take advantage of what we view as temporary cyclical concerns that caused the stock to trade at less than 10x reasonable trough earnings per share (EPS) estimates and less than 7x recent peak EPS.”
9. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 88
Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. It is one of the premier safe tech stocks for a retirement stock portfolio. On November 3, Tesla’s CEO Elon Musk said he planned to triple the size of its factory in southeast Berlin. Tesla required 1.4 million cubic meters of water every year to cast vehicle parts and cool heavy machinery and painting jobs. It has now gained access to a water resource for the purpose.
On October 24, Morgan Stanley analyst Adam Jonas maintained an Overweight rating on Tesla, Inc. (NASDAQ:TSLA) stock and lowered the price target to $330 from $350, noting that the company's third quarter report, while in line with consensus expectations, was both stronger and higher quality than expected.
At the end of the third quarter of 2022, 88 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 73 in the preceding quarter worth $7.2 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE, not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful. (click here to read more…)
8. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. It is one of the elite safe tech stocks for a retirement stock portfolio. On November 3, NVIDIA said it had partnered with Red Hat to test BlueField 2 DPUs. The companies found that the BluField 2 reduced networking demands on CPUs by 70% and accelerated speeds by 54 times. NVIDIA told HPCwire that it is continuing to run DPU tests with Red Hat.
On October 25, Needham analyst Rajvindra Gill maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and lowered the price target to $155 from $170, noting that consensus estimates were still forecasting a positive rate of growth for semiconductor stocks.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 19.2 million shares worth more than $2.3 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them was large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.
NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…(read more)
7. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 103
ServiceNow, Inc. (NYSE:NOW) provides enterprise cloud computing solutions that define, structure, consolidate, manage, and automate services for enterprises worldwide. It is one of the major safe tech stocks for a retirement stock portfolio. On October 6, ServiceNow declared that it had won a blanket purchase agreement by the US Department of Health Services. The agreement has an estimated value of $250 million for a five year performance period through 2027. The company will collaborate with Carahsoft to provide crucial functionality for HHS applications, reduce waste and help optimize inventory.
On November 2, Macquarie analyst Sarah Hindlian-Bowler took over coverage of ServiceNow, Inc. (NYSE:NOW) stock with an Outperform rating and $500 price target, noting that the company is expected to continue to deliver a best-in-class platform for making work better.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Managements is a leading shareholder in ServiceNow, Inc. (NYSE:NOW) with 1.7 million shares worth more than $639.7 million.
In its Q2 2022 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and ServiceNow, Inc. (NYSE:NOW) was one of them. Here is what the fund said:
"ServiceNow, Inc. (NYSE:NOW) is an enterprise software company that helps its corporate customers integrate all of their various software products into a unified platform. Their products are a key element in driving the digital transformation nearly every large company is undergoing. At the recent JP Morgan investor day, CEO Jamie Dimon explained that while the company could reduce expenses if needed should the economy slow, their spending on digital transformation would continue as this spending was critical to the company managing costs and maximizing revenue over time. As an example of this type of spending, Dimon specifically pointed to ServiceNow, calling out that the company’s products now oversaw the single largest collection of JP Morgan data and highlighted that working with them had saved JP Morgan $50 million over the past few years. (click here to read more…)
6. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 117
Salesforce, Inc. (NYSE:CRM) provides customer relationship management technology that brings companies and customers together worldwide. It is one of the prominent safe tech stocks for a retirement stock portfolio. On September 20, Salesforce noted that it would be launching a new market place to trade carbon credits that will let companies and organizations accelerate their climate positive impact at scale. The new platform is known as Net Zero Marketplace.
On November 2, Macquarie analyst Sarah Hindlian-Bowler took over coverage of Salesforce, Inc. (NYSE:CRM) stock with an Outperform rating and $210 price target, noting the company should end its multiple contractions with Cloud Suite-driven growth and improving margins.
At the end of the third quarter of 2022, 117 hedge funds in the database of Insider Monkey held stakes worth $8.2 billion in Salesforce, Inc. (NYSE:CRM), compared to 116 in the preceding quarter worth $7.9 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Mastercard Incorporated (NYSE:MA), Salesforce, Inc. (NYSE:CRM) is one of the safe tech stocks for a retirement portfolio.
In its Q3 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Salesforce, Inc. (NYSE:CRM) was one of them. Here is what the fund said:
“Salesforce, Inc. (NYSE:CRM) has become a dominant global player in sales, customer service, commerce and marketing software over the past 20 years. The company earns 80% gross margins and grows 20% organically. Plus, virtually all of its revenue is recurring. We see Salesforce as a great business that we’ve admired from afar for a long time. More recently, the organization has made some changes at the top that prompted us to take a closer look at the stock. New CEO Bret Taylor and CFO Amy Weaver are bringing a culture of financial discipline. We believe this renewed focus on profitability and capital return, combined with Salesforce’s strong underlying business characteristics, will yield strong results. The current valuation of 3.9x next year’s revenues represents a significant discount compared to publicly traded peers and recent private market values in the software space that have similar growth profiles. We view this discount as an opportunity to invest in a great business at a good value.”
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Disclosure. None. Retirement Stock Portfolio: 11 Safe Tech Stocks to Consider is originally published on Insider Monkey.