3 Stocks That BlackRock Is Betting On Right Now
BlackRock (NYSE:BLK) is the world’s largest asset management company, with $8.6 trillion in assets by the end of 2022. The company is well known for its prudent investment decisions and has accumulated this colossal amount of assets desp…
BlackRock (NYSE:BLK) is the world’s largest asset management company, with $8.6 trillion in assets by the end of 2022. The company is well known for its prudent investment decisions and has accumulated this colossal amount of assets despite being around for only 35 years. At its peak last year, BlackRock’s AUM surpassed $10 trillion before market headwinds started to weigh in. BlackRock released its 13F filing last month, which lets us look into the stocks the company is bullish or bearish on. The firm has highly experienced experts that determine the picks, and considering the performance so far, I’m confident the following three BlackRock stocks will do well as we advance:
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Snowflake (NYSE:SNOW) has gained significant attention from Wall Street due to its impressive revenue growth and partnerships with major tech companies. However, its fourth-quarter earnings report on Wednesday provided underwhelming guidance due to slowing growth in the cloud industry. The company expects product revenue of $2.7 billion, up 40% in its fiscal year ending on Jan. 31, 2024. That’s slightly less than Wall Street’s $2.93 billion estimate. The subsequent punishment has caused the stock to lose around 13% of its value, now trading in the $135 range.
BlackRock is among the most bullish on the stock and acquired 2,569,953 shares of SNOW in Q3, a 25.7% increase, taking its total to 12,567,822. These purchases were when the stock’s value was much higher, and the current drop provides an excellent time to snap up more SNOW stock. Sure, the guidance did miss the Street’s expectations, but the disappointment has been priced in, and that’s still a healthy 40% growth this year. Q4 revenue was also higher, and losses were lower than expectations.
Furthermore, Snowflake’s partnerships with major tech companies, such as Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), could also contribute to its growth down the line. The company has integrated its platform with these tech giants, allowing users to use Snowflake’s services on their cloud platforms seamlessly.
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UPS (NYSE:UPS) is a cash-generating machine and is up nearly 60% from the pre-pandemic period and continues to grow despite headwinds. Despite all this growth, its forward price-earnings ratio of 16 remains very appealing.
BlackRock increased its position in UPS by 11.15% from last year, taking its ownership of the company to 7.9%. Last year, the company’s revenue grew 3.1% to $100.3 billion, with operating profits of $13.1 billion, up 5.4%.
For 2023, UPS expects revenue to be between $97.0 billion and $99.4 billion and a consolidated adjusted operating margin of between 12.8% and 13.6%. That could lead to a slight decline in its price, but the company is well on track to keep growing in the long run.
UPS also stands to benefit from the current global supply chain disruptions, as the company’s expertise in logistics and supply chain management makes it well-positioned to navigate these challenges. As consumers increasingly turn to online shopping and same-day delivery options, UPS is poised to capitalize on these trends and continue its strong growth trajectory. Thus, with a 3.51% yield to sweeten the deal, it’s one of the long-term BlackRock investments.
BlackRock has also significantly increased its position in Baidu (NASDAQ:BIDU) stock, showing strong support for the Chinese tech giant. Baidu, often called the “Google of China,” is a leading search engine and artificial intelligence company expanding its offerings in areas such as cloud computing and autonomous driving.
As my colleague, Eddie Pan reported, BlackRock acquired 148.72 million shares in just Q4, up from just 1.6 million as of Q3. Shares of BIDU have been surging after its announcement of “Ernie,” a ChatGPT-style bot that’ll be made public after internal testing in March. Of course, there are concerns over regulatory challenges facing Chinese tech companies, but Baidu’s solid financials and growth prospects continue to make it an attractive investment option. With BlackRock increasing its position in the company, it’s clear that many investors share this sentiment.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is also an active contributor to a variety of finance and crypto-related websites. He has a strong background in economics and finance and is a self taught investor. You can follow him on LinkedIn.
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