The last couple of weeks have had an information overload for investors on Wall Street. Fed speak, Critical economic data and geopolitical instability have all moved the stock market in a huge way.
But what you may not realize is that one of the most crucial data releases of the first quarter happened less than a few weeks ago.
Based on the newest round of 13F filings, it is pretty clear that some billionaires could not stop buying the following two supercharged growth stocks in the fourth quarter.
The first fast-paced business that reeled in the billionaire buyers in the fourth quarter is networking and graphics giant Nvidia.
Four high-profile fund managers have added to their positions this past quarter, including Philippe Laffont’s Coatue Management, Israel Englander’s Millennium Management, David Siegel and John Overdeck’s Two Sigma Investments and Ken Griffin’s Citadel Advisors. All of these billionaires respectively purchased around 2.81 million shares, over 854,000 shares, more than 788,000 shares, and almost 765,000 shares.
Why Nvidia? Almost every aspect of its company is growing quicker than anyone had predicted– including the company’s management team. Sales in gaming increased 37% in Q4, with data center revenue increasing an impressive 71%.
Pretty much the only downside in Nvidia’s Q4 operating results was the 14% decrease in automotive revenues. However, this sales decrease has more to do with the supply-chain problems that are impacting the entire auto sector than Nvidia doing something wrong.
There is also much excitement regarding Nvidia’s future role in the metaverse. Put simply, the metaverse is a representation of the next iteration of the internet, which will let users interact with their surroundings and other individuals in 3D virtual worlds. Not surprisingly though, Nvidia’s professional-visualization revenue has more than doubled in Q4. The metaverse will likely take a long time to develop, but it sports a multitrillion-dollar opportunity.
If Nvidia continues to handily outpace Wall Street’s expectations, the sky is the limit.
A second company that has supercharged growth potential that billionaires purchased during Q4 is Block, the fintech stock that was first known as Square.
Four billionaires could not stop purchasing Block during quarter four. Those fund managers are Ken Griffin of Citadel Advisors, Jim Simons of Renaissance Technologies, Ole Andreas Halvorsen of Viking Global Investors and Chase Coleman of Tiger Global Management. These billionaires respectively purchased approximately 1.63 million shares in total.
What is noteworthy about the Block seller ecosystem is that it has become widely adopted by larger merchants. In Q4 of 2019, around 56% of all gross payment volume came from businesses with at least $125,000 in yearly GPV. By Q4 2021, this had increased to around 66% of gross payment volume. Since merchant fees mainly drive this segment, larger merchants often mean even more gross profits for Block.
With Block recently acquiring Afterpay, it is now able to create a closed-payment ecosystem between its Cash App and its seller ecosystem. In other words, Block still seems to be in the early stages of its growth.