In this article, we will be taking a look at the 4 best tech stocks to buy according to hedge funds. To read our analysis of the tech industry, you can go the 9 Best Tech Stocks to Buy According to Hedge Funds.
5. Alphabet Inc. (NASDAQ:GOOG)
Percentage of Invesco QQQ Trust’s Portfolio: 4.19%
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG), based in Mountain View, California, is the parent company of several companies including the Google, Verily Life Sciences, GV (formerly Google Ventures) and Calico. Majority of its revenue is generated by Google Services which comprises of ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube.
Alphabet Inc. (NASDAQ:GOOG) was ranked #4 on the list of Invesco QQQ Trust’s holdings based on its portfolio weight of 4.19% as of Q2 2022.
Alphabet Inc. (NASDAQ:GOOG) announced the release of Android 13 earlier in August, adding multiple new features focused on personalization and privacy. Alphabet Inc. (NASDAQ:GOOG) released the financial results for Q2 2022 earlier this year in July. Its revenue increased by 13% y-o-y to $69.7 billion, while its net income decreased by 16% y-o-y to $16 billion. It reported an EPS of $1.21, missing the consensus by $0.08.
Alphabet Inc. (NASDAQ:GOOG) is one of the most commonly owned stock among the 895 hedge funds tracked by Insider Monkey. As of Q2 2022, 153 hedge funds owned shares of Alphabet Inc. (NASDAQ:GOOG), valued at $22.3 billion.
4. Meta Platforms, Inc. (NASDAQ:META)
Percentage of Invesco QQQ Trust’s Portfolio: 4.04%
Number of Hedge Fund Holders: 184
Menlo Park, California-based Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate focused on building products and services that help people connect and communicate. Formerly known as Facebook, Inc., the tech conglomerate reports its business under two segments: Family of Apps – comprising social media web and smartphone apps Facebook, Instagram, Messenger, and WhatsApp; and Reality Labs – comprising augmented and virtual reality products including hardware, software, and content.
Meta Platforms, Inc. (NASDAQ:META) mainly generates revenue through advertising services on its platforms which boast a combined total of 3.65 billion monthly active users as of June 30, 2022.
In August, Morgan Stanley analyst reduced the price target on Meta Platforms, Inc. (NASDAQ:META) shares from $280 to $225, while Loop Capital lowered the price target from $180 to $165.
As of Q2 2022, Meta Platforms, Inc. (NASDAQ:META) accounted for a 4.04% share of Invesco QQQ Trust’s portfolio. Meta Platforms, Inc. (NASDAQ:META) is among hedge funds’ favorites as 184 of the 895 hedge funds tracked by Insider Monkey hold its shares valued at a combined total of $18.2 billion.
Here is what Alger Capital specifically said about Meta Platforms, Inc. (NASDAQ:META) in their recent investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates Facebook, the world’s largest social network. The digital advertising industry is taking market share of advertising dollars from print, radio, and tv media. However, concerns about brand risk, or having advertisements appear alongside of controversial content, caused brands and agencies to move budgets away from meta, resulting in disappointing revenue. Diminished ad tracking capability relative to consumer opt-out also weighed upon sentiment for meta shares. Meta’s share performance responded favorably, however, to first quarter results that that while not strong fundamentally, were positive against extremely low expectations among some investors. The positive contribution to portfolio performance was due to a sequential quarterly increase in customer utilization and management lowering its expense guidance $3 billion in order to protect earnings. In a market environment that is rewarding companies with relatively high current earnings, we believe Meta’s spending discipline resonated with investors.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Percentage of Invesco QQQ Trust’s Portfolio: 7.79%
Number of Hedge Fund Holders: 252
Amazon.com Inc (NASDAQ: AMZN) is a multinational technology company operating online and physical stores where it sells its own products as well as allows third-party sellers to sell their products to consumers. It manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and develops and produces media content; and provides cloud computing services through Amazon Web Services platform. Its ecommerce platform is home to more than 1.7 million small and medium businesses.
In July, Amazon released its financial results for the second quarter of 2022. Its total revenue increased by 7% y-o-y to $121.2 billion, while it reported a net loss of $2 billion. The EPS was recorded at (-$0.20) for the quarter, missing the consensus by $0.32.
Amazon.com Inc (NASDAQ: AMZN) accounted for the third highest share in Invesco QQQ Trust’s portfolio as of Q2 2022 with 7.79% weight in the ETF’s portfolio. Amazon.com Inc (NASDAQ: AMZN) is also highly sought after by hedge funds as 252 out of the 895 tracked by Insider Monkey hold its shares with a total value of $30 billion.
Oakmark Funds, an investment management firm, mentioned Amazon.com, Inc. (NASDAQ: AMZN) in its second quarter of 2022 investor letter. Here’s what they said:
“Amazon (NASDAQ:AMZN) is the leading e-commerce and cloud-computing provider in the world. Two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (“AWS”) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at a very attractive price. At our purchase price and valuing AWS like its peers, an investor isn’t paying much of anything for the immensely valuable e-commerce franchise.”
1. Microsoft Corporation (NASDAQ:MSFT)
Percentage of Invesco QQQ Trust’s Portfolio: 10.11%
Number of Hedge Fund Holders: 258
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products that include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT) boasts over 1.4 billion monthly active devices running its flagship operating system, Windows 10 or 11.
Earlier this year, Microsoft agreed to acquire Activision Blizzard, Inc. (NASDAQ:ATVI) in an all-cash transaction valued at $68.7 billion. The proposed acquisition is expected to accelerate growth in Microsoft’s Gaming business across mobile, PC, console, and cloud.
In July, Microsoft Corporation (NASDAQ:MSFT) reported its earnings for the quarter ended June 30, 2022. Its revenue increased by 12% y-o-y to $51.9 billion, while net income increased by 2% y-o-y to $16.7 billion. It recorded an EPS of $2.23, missing consensus by $0.06.
As of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) has the second highest weight on Invesco QQQ Trust’s portfolio at 10.11%. Microsoft Corporation (NASDAQ:MSFT) is the most sought-after stock among the 895 hedge funds tracked by Insider Monkey as 259 of these hedge funds held shares in the software giant, valued at $56 billion. Fisher Asset Management was the largest shareholder in the company owning 28.7 million shares valued at $7.4 billion.
