Ken Fisher of Fisher Asset Management comes from investing royalty. His father, Philip Fisher, wrote the investment classic “Common Stocks and Uncommon Profits” and whom Morningstar called “one of the great investors of all time.” He was a long-term, buy-and-hold investor who, like Warren Buffett, believed the best time to sell a stock was “almost never.”
Many of those attributes were passed down to his son, who manages $265 billion in assets under management (AUM). Despite its size, Fisher Asset Management has notched some impressive gains over the past decade. The firm’s 10-year annual returns are north of 58%, while over the last five years, Fisher returned 63%. In just the last 12 months he is up to 24%.
Although he has a large portfolio containing well over 900 companies, these are the three stocks dominating this investing icon’s portfolio today.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) recently slipped to fifth place as the most valuable company in Fisher’s portfolio, but its performance so far this year has been stellar. AMZN stock is up 20% year to date and more than 76% higher over the past year.
Because the online retailer is so integral to the economy, it was added to the Dow Jones Industrial Average. It’s not just because of its e-commerce platform but also its cloud services business, which provides the backbone for the internet presence of numerous companies. And it continues to improve itself.
Cost-cutting measures and integration of artificial intelligence (AI) are paying benefits to Amazon. Strong revenue and better profit margins over the past few quarters are just some of the tangible results of its efforts. Perhaps most notable is the surge in advertising revenue, up 27% last quarter to $14.7 billion. It is already the third-largest ad platform behind Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META).
Fisher owns 41.8 million shares of Amazon stock worth $7.6 billion, making it the fourth-largest position in his portfolio at 3.7% of the total. With an average purchase price of around $54 per share, Fisher has seen his investment more than triple in value.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is the biggest position Fisher owns. It represents 5% of his portfolio. Few stocks are as closely associated with AI as Microsoft. Having integrated OpenAI’s ChatGPT generative AI technology into all aspects of its operations, the tech giant is receiving significant dividends.
AI contributed 600 basis points of growth to Microsoft’s Azure cloud services business last quarter, double what it had done just one quarter prior. It is also helping Microsoft land more and bigger deals for longer contractual periods of time.
Clients like Azure. It allows them to grow their transition to the cloud at their own pace. The hybrid environment lets them choose the level of service they want and where they want it. They can choose between on-premises, in the cloud or a combination of both. Expect to see AI’s growth rate and contribution to Microsoft accelerate in the coming quarters.
Fisher owns 25.4 million shares of MSFT stock worth $10.7 billion. He’s generated gains of 291% so far with his average purchase price of $107 per share.
Apple (AAPL)
The No. two holding in Fisher Asset Management is Apple (NASDAQ:AAPL). Despite all the headwinds the consumer electronics stock faces, Apple has tripled Fisher’s investment from the average buy-in price of $51 per share. Yet the headwinds are legion.
Most notable is the Justice Dept. suing Apple for antitrust violations. Although some of the allegations seem ludicrous, such as operating a monopoly when it has but a 57% share of the domestic smartphone market, it will be a distraction for management as it fights back against the charges.
Apple also has its work cut out for it in China, one of its biggest markets but also one that has seen sales slow dramatically. Its iPhone sales reportedly plummeted 33% in China in January and February, according to Bloomberg News. Of course, March tends to be the strongest month of the three in the quarter, so we will need to see how the iPhone fared then.
The consumer tech leader has its next iteration of the smartphone coming out later this year. The iPhone 16 should also have some form of Google’s own AI technology accessible so it could be a big seller.
Apple stock is down 9% year-to-date, but no one suggests the party is over by a long shot.
On the date of publication, Rich Duprey did not hold (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.
