Billionaire hedge-fund manager Julian Robertson endorses high-flying US tech stocks – and says their valuations aren't lofty

Julian Robertson
‘Tiger King’ Julian Robertson.

  • Billionaire investor Julian Robertson said tech stocks are not overvalued despite soaring prices.
  • “I don’t think the valuations are… much higher than they’ve been all along,” he told the FT.
  • His support for the sector is notable since he built a reputation for correctly predicting the 1990s tech bubble.
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“Tiger King” Julian Robertson is validating US tech-stock valuations, setting aside concerns that the sector is ripe for a correction.

The billionaire founder of Tiger Management, who has spawned dozens of “Tiger cubs,” told the Financial Times in a rare interview he’s betting on stocks like Alphabet, Facebook, and Microsoft despite market expectations that weakness is undeniable for these companies.

“I think they are good value,” he said. “I don’t think the valuations are… much higher than they’ve been all along.”

Robertson developed a reputation for predicting the 1990s tech bubble, when his hedge fund pulled out of virtually all investments in the sector. But he’s backed tech for a long time, giving his nod to the FAANG stocks in 2017, even when he thought the overall market was historically “very high.”

Tiger Management currently has positions in ride-hailing firm Uber, Microsoft, Alphabet, Facebook, Amazon, and chipmaker Micron Technology, according to filings registered with the Securities and Exchange Commission. Robertson did not provide the FT with details on his fund’s short positions, or securities for which investors anticipate prices to fall.

Big Tech dominated the year of the pandemic when investors piled into, and embraced, the stay-at-home trade. The sector has been ultimately spooked since the start of this year by rising bond yields due to higher inflation, but increasing cash flow and recurring revenue streams could help provide protection.

Robertson said he was seeing some indication of over exuberance across different asset classes, but doesn’t think “it’s enough to overwhelm the whole market.”

David Bahnsen, chief investment officer of wealth manager The Bahnsen Group, thinks tech stock values are disconnected from reality and their decline is simply the removal of froth from valuations.

“When a stock’s gain becomes dependent on multiple expansion that is driven by a constant flow of new money, new momentum and new popularity, eventually the game ends,” he said in a note to Insider.

But Robertson and his son Alex challenge this perspective. “You can kind of justify paying a slightly higher multiple because of the great growth, right?” Alex Robertson told the FT.

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