High-profile investors Jeff Smith and Alex Sacerdote hit home runs after Cisco ‘s buyout of cybersecurity software company Splunk sent shares surging. Splunk rocketed more than 20% following the announcement that Cisco will acquire it for $157 per share in an all-cash deal worth about $28 billion. The move marked a big win for the two hedge fund investors with big stakes in Splunk. Splunk was Smith’s Starboard Value’s third-biggest holding at the end of June, with a bet worth more than $430 million. The investor previously said Splunk could benefit from the rise of artificial intelligence , but was lacking in execution. Smith, one of the most notable activist investors over the past two decades, has come out as an AI bull, comparing the technology with the advent of the internet. He was also one of the activist investors in customer relations management software company Salesforce. Sacerdote’s Whale Rock Capital Management hedge fund, which focuses on technology, media and telecommunications, had invested more than $170 million in Splunk at the end of the second quarter. Once a Fidelity portfolio manager, Sacerdote first bought Splunk in the beginning of 2022. What else are they betting on? Smith, who has called AI an “enormous opportunity,” invested in a few other stocks to capitalize on the boom. He drastically increased his stake in Wix.com last quarter, making it his ninth-biggest holding. Wix.com is a web development platform enabling businesses to take workflow online. The stock is up about 16% this year. Meanwhile, Smith hiked his stake in Acacia Research in the second quarter, pushing the patent licensing company to the 10th-biggest position in Starboard’s stock portfolio. Whale Rock’s top holdings included a host of Big Tech stocks such as Microsoft , Meta , Nvidia and Netflix . Cloud-based customer relationship management platform HubSpot is a lesser-known stock that’s a favorite of Whale Rock. The stock, Whale Rock’s fifth-biggest stock bet as of the end of June, has soared more than 66% this year. Sacerdote also had a big bet on another cybersecurity company like Splunk, Fortinet . Guggenheim recently upgraded Fortinet to buy from neutral after an earnings-triggered sell-off created a compelling entry point. The stock is still up 20% this year.
Sumber: www.cnbc.com