5 Most Owned Stocks by Hedge Funds

In this article, we discuss 5 most owned stocks by hedge funds. If you want to read our detailed analysis of popular hedge funds and their performance, check out 25 Most Owned Stocks by Hedge Funds. 

5. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 173

Visa Inc. (NYSE:V) operates as a payments technology company worldwide. On June 28, Visa Inc. (NYSE:V) entered into an agreement to acquire Pismo, a cloud-based payment and banking platform, for a cash amount of $1 billion. This acquisition aims to enable Visa Inc. (NYSE:V) to enhance its primary banking and issuer processing capabilities for a wide range of financial institutions and fintech clients. Furthermore, this move will facilitate support and connectivity for emerging payment systems such as Pix, the instant payment platform of the Central Bank of Brazil. The transaction is expected to be finalized by the end of this year. 

According to Insider Monkey’s first quarter database, 173 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 177 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 19.3 million shares worth $4.3 billion. 

Manole Capital Management made the following comment about Visa Inc. (NYSE:V) in its second quarter 2023 investor letter:

“We like to start out all of our discussions by telling investors who we are. We are FINTECH investors, and we define Fintech as “anything utilizing technology to improve an established process.” We realize that half of Fintech is financial, but we don’t invest in traditional, credit sensitive banks. Having managed money during the Financial Crisis, we learned firsthand how certain opaque and balance sheet intensive financials could go bankrupt or insolvent.

We prefer transaction-based businesses, generating recurring revenue, with sustainable margins, and significant cash flow. From our perspective, the perfect example of a FINTECH business is the secularly growing payments industry. Names like Visa Inc. (NYSE:V) or Mastercard, that generate revenue and profit per swipe or transaction, without the underlying credit sensitivity or risk associated with that underlying line of credit.”

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 204

The primary distinction between Alphabet Inc. (NASDAQ:GOOGL) and Alphabet Inc. (NASDAQ:GOOG) lies in the voting rights associated with their shares. Class A shares of Alphabet Inc. (NASDAQ:GOOGL) carry voting rights, whereas Class C Alphabet Inc. (NASDAQ:GOOG) do not. It is one of the most owned stocks by hedge funds. According to Insider Monkey’s first quarter database, 204 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOGL), compared to 209 funds in the prior quarter. 

Manole Capital Management made the following comment about Alphabet Inc. (NASDAQ:GOOGL) in its second quarter 2023 investor letter:

“Despite this, the S&P 500 is up 7% this year and the Nasdaq is up +11%. Technology rebounded from a challenging 2022 and many large tech companies are performing quite well this year. Through mid-May 2023, year-to-date performance of some of the most popular and largest tech names is impressive. For tech companies with market capitalizations over $1 trillion, Apple is up +35%, Microsoft +33%, Amazon +39%, and Alphabet Inc. (NASDAQ:GOOG) is +40%. If you add in Nvidia, Google and Meta, you have three quarters of the entire S&P 500’s year-to-date return.

For our purposes, we are just going to focus on software digital wallets, as they are much more common and accessible. If you own an iPhone, then you have an Apple Pay preloaded digital wallet. If you have a Samsung phone, you have Samsung Pay available for use. Those two, along with Google Pay and PayPal, are the four most popular digital wallets today. According to the Payments Journal, PayPal has been used (over the last 12 months) by 62% of American consumers, followed by Apple Pay at 41% and Google Pay at 32%.

We are loyal Apple users (iPhones, iPads, iMac) and find their Apple Pay to be a convenient and safe digital wallet to use. It is currently accepted at more than 90% of US retailers, so it clearly has widespread adoption. Samsung and Google users also seem pleased with their preferred digital wallets. In our opinion, these new entrants are “a bit too late to the party” to make a meaningful dent versus established players.

As of today, both Apple Pay, Samsung Pay and Google Pay have a distinct advantage in the digital wallet arena. These three firms have spent billions of dollars ensuring that their apps are easy to use on their smartphones. Plus, and maybe more importantly, the consumer experience is embedded and native to the operating system. This ties their digital wallet to the device, which cannot be replicated.”

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 220

Meta Platforms, Inc. (NASDAQ:META) is one of the favorite stocks of smart investors. According to Evercore ISI analyst Mark Mahaney on July 10, Meta Platforms, Inc. (NASDAQ:META)’s text app Threads, which aims to rival Twitter, has experienced a rapid initial growth rate. While it is still early to make definitive conclusions, the app shows promising potential for generating substantial revenue in the coming years, according to the analyst. Threads made a strong debut with its launch and quickly accumulated nearly 100 million users within its first three days. This provides a solid starting point for competing with Twitter, which currently has approximately 240 million daily active users. The analyst views Meta Platforms, Inc. (NASDAQ:META) as one of Evercore’s favored choices and reaffirmed a target price of $350, implying a potential upside of 20%.

According to Insider Monkey’s first quarter database, 220 hedge funds were bullish on Meta Platforms, Inc. (NASDAQ:META), compared to 194 funds in the prior quarter. Philippe Laffont’s Coatue Management is a prominent stakeholder of the company, with 8 million shares worth $1.70 billion. 

ClearBridge Large Cap Growth Strategy made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2023 investor letter:

“Delivering performance through fundamental, bottom-up stock selection has been a constant over our tenure managing the Strategy. We underperformed in the first half of 2022 from being too early in entering several stocks going through negative earnings revisions and have seen relative results rebound over the last 12 months due to better stock picking, especially among earnings reset names such as Netflix and Meta Platforms, Inc. (NASDAQ:META). Also within shadow tech, we added back to our weighting in Meta as steady advertising trends and continued cost management should lead to improved profitability.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Amazon.com, Inc. (NASDAQ:AMZN) is one of the most favored stocks among smart investors. On June 26, Amazon.com, Inc. (NASDAQ:AMZN) unveiled plans to invest approximately $7.8 billion in expanding its AWS data center operations in Ohio. The company aims to finalize the investment by 2030. This funding will not only create job opportunities directly at the data center site but also generate thousands of additional jobs at local businesses involved in the construction, operations, and maintenance of AWS facilities. The increased investment serves to strengthen the enduring collaboration between Amazon.com, Inc. (NASDAQ:AMZN) and the state of Ohio.

According to Insider Monkey’s first quarter database, 243 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 240 funds in the earlier quarter. Harris Associates is a leading stakeholder of the company, with 22.8 million shares worth $2.3 billion. 

ClearBridge Large Cap Growth Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2023 investor letter:

“2023 has so far marked a return to mega cap leadership, with Apple, Microsoft, Alphabet, Amazon.com, Inc. (NASDAQ:AMZN) and Nvidia accounting for approximately two thirds of the benchmark return. At 41.3%, the five largest stocks in the market represent the highest concentration in the 26-year history of the Russell 1000 Growth Index. Among these names, we maintain overweights to Nvidia (+246 bps) and Amazon (+117 bps), underweights to Microsoft (-353 bps) and Apple.

The Strategy’s IT holdings also drove performance in the second quarter, led by the continued rerating of graphics chipmaker Nvidia as a key beneficiary of the generative AI boom. AI-connected holdings Microsoft and Amazon also delivered strong gains.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

Microsoft Corporation (NASDAQ:MSFT) is the most favored stock among elite hedge funds. On July 12, Dan Ives, a Wedbush Securities analyst, had an optimistic outlook on Microsoft Corporation (NASDAQ:MSFT) by maintaining an Outperform rating and set a price target of $375. Ives emphasized the significance of Activision Blizzard, Inc. (NASDAQ:ATVI) as a valuable asset for Microsoft, which he believes will greatly enhance its consumer franchise. This development is expected to have a broader impact on the tech industry, potentially paving the way for more acquisitions by technology companies, Ives wrote in a research note. 

According to Insider Monkey’s first quarter database, 289 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 259 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the leading stakeholder of the company, with 39.2 million shares worth $11.3 billion. 

L1 Capital International Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2023 investor letter:

“We commented in the December 2022 Quarterly Report “sentiment towards many high-quality technology and ecommerce related businesses like Amazon and Alphabet is negative. Capital flows and an over-emphasis on short-term challenges is driving share prices well below fair value, providing compelling investment opportunities for longer term investors”. In that report we outlined in detail why Amazon’s share price has been oversold and offered compelling value.

During the March 2023 quarter the share price of many large capitalization technology companies increased significantly. The Fund has investments in Alphabet, Amazon and Microsoft Corporation (NASDAQ:MSFT) and their share prices increased 17%, 23% and 20% (in U.S. dollars), respectively. While we continue to see value in these privileged, high-quality businesses, share prices are no longer trading at materially oversold levels and we have selectively started to trim some of the Fund’s exposure. Microsoft was trimmed due to share price performance and position size.”

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