Updated on February 21st, 2024 by Nikolaos Sismanis
Alkeon Capital Management is a privately-owned registered investment adviser out of New York. The company was formed in 2002 as a spin-off from CIBC Oppenheimer.
Two key individuals govern the firm: Takis Sparaggis, President and CIO, and Alex Tahsili, who performs the Managing Director role.
They both oversee Alkeon Capital Management’s portfolio, currently valued at approximately $44.8 billion, about $14.4 billion of which is allocated to public equities.
Investors following the company’s 13F filings over the last three years (from mid-February-2021 through mid-February-2024) would have generated annualized total returns of -1.8%. For comparison, the S&P 500 ETF (SPY) generated annualized total returns of 11.0% over the same time period.
Note: 13F filing performance is different than fund performance. See how we calculate 13F filing performance here.
You can download an Excel spreadsheet with metrics that matter of Alkeon Capital Management’s current 13F equity holdings below:
Keep reading this article to learn more about Alkeon Capital Management.
Table Of Contents
- Introduction & 13F Spreadsheet Download
- Alkeon’s Approach To Investing
- Alkeon’s Portfolio & Top Holdings
- Final Thoughts
Alkeon’s Approach To Investing
Alkeon has stayed away from the spotlight for decades, publishing limited information regarding its operations and investment philosophy. An interview with management from its early days, however, reveals essential info that seems to hold up today.
Its research process is a 100% bottom-up, fundamentally driven, research-concentrated procedure for investing. Their flagship strategy involves identifying significant potential returns in Technology, Media, and Telecom (“TMT”) in the broadest scope. Applying a bottom-up strategy implies that Alkeon focuses on individual securities rather than on the overall movements in the securities market.
Mr. Sparaggis, who holds the final word for any investment, aims for a 12 to 24-month time horizon for Alkeon’s holdings and discourages short-term trading. Alkeon avoids timing the direction of the market and aims to generate alpha based on its exceptional stock-picking skills. It also has an elaborate network of industry contacts, with whom it is in continuous talks in order to identify industry trends before they become apparent to Wall Street.
Alkeon is primarily focused on investing in stocks with impressive growth rates. Many investors hesitate to invest in this type of stock due to their excessive price-to-earnings ratios, but Alkeon has proved competent in identifying high-growth stocks that produce outsized returns.
The company’s in-house risk manager is responsible for periodic checks to ensure diversification among individual securities and sectors, liquidity, and overall fund exposures.
Finally, Alkeon manages its clients on a pari passu basis. In other words, clients are treated in an equal footing manner and managed without preference. By comparison, some hedge funds may differentiate among multiple classes of clients based on their available capital and reputation.
Alkeon’s Portfolio & Top Holdings
At this point, about 1/3 of Alkeon’s portfolio appears to consist of public equities. The picks reflect management’s tech and communications-oriented strategy. Collectively, these two sectors occupy around 62% of Alkeon’s portfolio.
Source: 13F filings, Author
Out of Alkeon’s 77 individual stocks, the top 10 holdings account for around 60% of its public-equities part of the portfolio. That figure reaches about 75% for its 20 larger picks, indicating a relatively concentrated allocation of funds.
In fact, apart from Amazon and Meta Platforms stocks, which account for 13.2% and 12.1% of the fund’s portfolio, respectively, no other stock accounts for a double-digit percentage of the total portfolio, which is quite unique among the various funds we have covered. That being said, the fund’s sector diversification may still be a bit weak sector-wise due to the high focus on tech, communication, and consumer discretionary stocks.
During the period covering Alkeon’s latest 13F filing, the fund initiated and sold the following noteworthy securities:
New Noteworthy Buys:
- ETF: Invesco QQQ Trust, Series 1 (QQQ)
- NVIDIA Corp. (NVDA)
- Cabaletta Bio, Inc. (CABA)
New Noteworthy Sells:
- QUALCOMM Inc. (QCOM)
- Global Payments Inc. (GPN)
- Marvell Technology Group Ltd (MRVL)
As of the fund’s latest 13F filing, the following are the top 10 holdings of Alkeon:
Amazon.com, Inc. (AMZN)
Featuring more than 200 million Prime memberships, Amazon is one of those companies that need no introduction. Amazon is predicted to exceed the $640 billion annual revenue threshold by the end of 2024, thus becoming the largest company in the globe in terms of revenues. Walmart has retained the crown for a long time, whose revenues average about $6350 billion per annum.
Wall Street’s sentiment towards the stock has been bullish lately, with macro challenges fading and Amazon’s profitability prospects improving. The stock has posted strong gains lately on the back of strong cloud revenues and strong consumer spending.
While the current challenges may persist for a while, Amazon remains a behemoth whose long-term story remains exciting, especially regarding its rapidly growing AWS segment.
Amazon has been amongst Alkeon’s holdings for quite some time, with the fund initiating a position back in Q4-2019. It is now the fund’s largest holding, accounting for 13.2% of the total portfolio.
Meta Platforms, Inc. (META)
Shares of Meta Platforms have gained significant momentum lately. By placing emphasis on refining its core platforms, optimizing profitability, and relinquishing previous misconceptions regarding the Metaverse, Meta is poised to witness significant financial improvements in the coming months.
As a result, the overall perception of Meta has undergone a complete transformation recently, with Wall Street now anticipating notable strides in profitability within the near-to-mid-term.
In the meantime, Meta’s family of apps captivates the attention of more than a third of the world’s population every month. Surprisingly, Facebook, Instagram, and WhatsApp continue to attract a growing number of engaged users.
In its Q4 2023 report, the company rejoiced in reaching a remarkable achievement, with Facebook boasting 3.07 billion monthly active users (MAUs), a 3% rise compared to the same period last year, and a combined total of 3.98 billion monthly active individuals (users across all platforms), indicating a notable 6% increase.
Alkeon appears quite confident in Meta’s future, with the stock being its second-largest public equity holding. The stock accounts for around 12.1% of the fund’s portfolio.
Alphabet Inc. (GOOGL) (GOOG)
Shares of Alphabet have been under severe pressure lately as the ongoing macroeconomic turmoil, including reducing advertising spending and a strong dollar, has materially impacted the company’s ability to grow. Additionally, the company’s profitability has been compressed over the past few quarters due to accelerated hiring and an overall increase in spending.
However, with its most recent quarterly results showing strong numbers and a more promising industry outlook, the tides may be turning for Alphabet.
Overall, the company continues to feature one of the healthiest balance sheets in the market. Management returns tons of cash to shareholders through stock buybacks, and its performance should bounce strongly once the general market conditions improve.
Alphabet is Alkeon’s third-largest holding, with the fund trimming its position by around 10% during the quarter.
NVIDIA Corporation (NVDA)
NVIDIA Corporation, recognized globally for its groundbreaking contributions to graphics processing units (GPUs) and artificial intelligence (AI) computing, has solidified its position as a tech industry leader since its founding in 1993.
Renowned for its GeForce GPUs, NVIDIA dominates the gaming sector, delivering immersive experiences, while its Quadro series caters to professionals in design and visualization. The company’s GPUs, including the Tesla and A100, are pivotal in accelerating AI and deep learning workloads, making NVIDIA a key player in data centers and scientific research.
With a focus on the automotive industry, NVIDIA’s DRIVE platform powers advanced driver-assistance systems and autonomous driving. Strategic acquisitions, such as Mellanox Technologies, bolster NVIDIA’s capabilities, while its commitment to real-time ray tracing technology sets new standards for graphics realism.
NVIDIA’s ecosystem, developer support, and continual innovation underscore its widespread influence across gaming, professional graphics, AI, and beyond. For the latest developments, it is advisable to refer to recent sources or NVIDIA’s official website.
With demand for NVIDIA’s chips skyrocketing during the ongoing semiconductor boom and data center craze due to the rise of AI, both NVIDIA’s financials and shares have skyrocketed in recent quarters.
Alkeon has been bullish on NVIDIA since Q2 of 2023 through call option contracts. It’s the fund’s fourth-largest holding.
Microsoft Corporation (MSFT)
Microsoft is an ever-lasting growth powerhouse in tech whose diversified portfolio of essential products and services continues to generate growing cash flows. In line with most growth companies, Microsoft’s growth has slowed lately as global economic growth has also taken a toll. That said, the company remains highly profitable while returning large amounts of cash back to its shareholders despite the ongoing challenges.
Microsoft’s latest advancements in AI, including the upcoming integration of ChatGPT with its Bing search engine, should also be a growth catalyst that’s worth investors’ attention moving forward.
Microsoft is Alkeon’s fifth-largest holding despite the fund holding its position steady during the previous quarter.
Taiwan Semiconductor Manufacturing Company Limited (TSM)
Taiwan Semiconductor shares have been under pressure over the past year as concerns over the company’s cyclical business model in a tough macro environment combined with China’s continuous threats towards Taiwan’s sovereignty have spooked investors. Nevertheless, the company’s revenue and net income growth momentum remain incredibly strong, while Buffet’s recent investment in the company makes for a great vote of confidence in the stock.
Taiwan Semiconductor is Alkeon’s sixth-largest holding. It makes up around 3.6% of its public equity portfolio. Alkeon trimmed its position by 2% during Q4.
Tesla, Inc. (TSLA)
Established in 2003, Tesla thrived under the leadership of Elon Musk and became synonymous with cutting-edge advancements in electric vehicle technology and sustainable energy solutions. Notably, Tesla’s efforts in developing autonomous driving technology, epitomized by its Autopilot system and ambitions for full self-driving capability, have set new standards for the automotive industry.
Further, the company’s global network of Gigafactories contributes to its ability to manufacture vehicles and components at scale. Through its innovative products and endeavors, Tesla has managed to grow its revenues and profits swiftly over the years. That said, it remains one of the most controversial stocks on the planet, with both bulls and bears presenting compelling arguments regarding Tesla’s investment case.
Tesla is Alkeon’s seventh-largest holding, making up about 3.6% of Alkeon’s public equities portfolio.
Zoom Video Communications, Inc. (ZM)
Zoom Video Communications, founded in 2011 by Eric Yuan, gained widespread popularity during the COVID-19 pandemic as a go-to platform for remote work, virtual meetings, and online education.
Its user-friendly interface and high-quality video made it a preferred choice, leading to significant growth. Despite facing privacy and security concerns, Zoom’s surge highlighted its pivotal role in facilitating digital communication during the global health crisis.
The company’s growth has stagnated lately, though Zoom remains somewhat profitable.
Zoom Video Communications is Alkeon’s eighth-largest holding, with the fund holding its position relatively stable during the quarter.
Cadence Design Systems, Inc. (CDNS)
Cadence Design Systems, Inc. is an American electronic design automation (EDA) software and engineering services company. Founded in 1988, Cadence is headquartered in San Jose, California.
The company specializes in providing software, hardware, and intellectual property (IP) for designing integrated circuits (ICs), electronic systems, and PCBs (printed circuit boards).
Cadence’s products and services are widely used by semiconductor companies, electronics manufacturers, and other organizations involved in the development of electronic devices.
The company offers a comprehensive suite of tools for various stages of the design and verification process, including digital design, analog/mixed-signal design, verification, and implementation.
Cadence’s revenues and net income have been proliferating for a tremendously long period of time, with the company now boasting a $79 billion market cap.
Cadence Design Systems is Alkeon’s ninth-largest holding, with the fund holding its position relatively stable during the quarter.
KLA Corporation (KLAC)
Founded in 1997, KLA Corporation plays a vital role in enhancing semiconductor manufacturing processes through its advanced wafer inspection and metrology tools, ensuring precision and reliability in integrated circuit fabrication.
KLA’s portfolio also extends to advanced packaging solutions, addressing the challenges posed by evolving semiconductor packaging technologies. Their optical and e-beam inspection technologies, coupled with a commitment to process analytics and control, contribute to defect detection and process optimization.
With a global presence and collaborative efforts with industry leaders, KLA remains at the forefront of semiconductor innovation, continually advancing its technologies to meet the dynamic demands of the industry.
The company has managed to grow rapidly in recent years, capitalizing on the semiconductor boom. KLA is also one of the most profitable companies in the space, featuring 30%+ net income margins.
KLA is Alkeon’s tenth-largest holding, occupying around 1.8% of its equity holdings.
Final Thoughts
Despite Alkeon’s low profile and preference not to attract media attention, the company is a silent achiever. Its performance may appear terrible compared to the overall market, but this is likely due to the limitation involved in computing hedge fund returns.
Its AUMs have grown significantly over time, while in the past, Alkeon has delivered market-beating performance by unlocking the alpha potential on multiple stocks, providing its clients with excellent investment returns.
You can download an Excel spreadsheet with metrics that matter of Alkeon Capital Management’s current 13F equity holdings below:
Additional Resources
If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 56 stocks with 50+ years of consecutive dividend increases.
- The 20 Highest Yielding Dividend Kings
- The Dividend Achievers List: a group of stocks with 10+ years of consecutive dividend increases.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Monthly Dividend Stocks List: contains stocks that pay dividends each month, for 12 payments per year.
- The 20 Highest Yielding Monthly Dividend Stocks
- The High Dividend Stocks List: high dividend stocks are suited for investors that need income now (as opposed to growth later) by listing stocks with 5%+ dividend yields.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: