Consumer hunger for new gadgets has propelled the tech industry’s growth over the last few years. Given the rapid pace of technological change, the innovative tech companies are the ones most likely to succeed in the industry. The MSCI World Information Technology Index, which tracks the stocks of large, mid-size, and small U.S. companies within the information technology sector, has returned 3.48% year-to-date (the S&P 500 has delivered 3.16% gains over the same period). In the following article we will take a look at how the hedge funds within our database feel about their favorite technology stocks, which are Apple Inc. (NASDAQ:AAPL), Facebook Inc. (NASDAQ:FB), Google Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com Inc. (NASDAQ:AMZN).
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Unsurprisingly, Apple Inc. (NASDAQ:AAPL) retains its spot as the most popular tech stock among the hedge funds in our database, even though the number of funds with a stake in the tech giant decreased to 142 from 150. The total market value of all hedge funds’ investments in Apple at the end of the latest quarter amounted to $21.27 billion, down from $21.52 billion reported a quarter ago. Apple shares are up nearly 6% year-to-date, although the stock has slumped after the company’s revenue predictions for the fourth quarter came in lower than previously expected and it missed iPhone sales targets in the third quarter. The launch of the iPhone 6S is just around the corner, so Apple will take back the spotlight from its rivals again and will most likely see a boost in its revenue during the fall. It’s no surprise to anyone that Carl Icahn’s Icahn Capital LP is among the largest shareholders in Apple Inc. (NASDAQ:AAPL), holding 52.76 million shares at the end of June.
Facebook Inc. (NASDAQ:FB) received the confidence of the smart money during the second quarter as the number of hedge funds holding shares in the company rose to 133 from 129. Meanwhile, the value of the holdings in Facebook augmented to $8.86 billion from $7.09 billion. Its stock has rallied by 22% this year, but analysts believe that the shares of Facebook are still undervalued. Just a little while ago, MKM Partners, named a “Top Research Performer” by Integrity Research Associates, reiterated a “Buy” rating on Facebook and increased their price target on the company’s stock to $120 from $105. Subsequently, this yields an upside potential of almost 26% from the current price of $95.47. Lone Pine Capital, founded by Tiger Cub Steven Mandel, owns a 9.76 million-share stake in Facebook Inc. (NASDAQ:FB), which accounts for 3.13% of its entire portfolio.
Google Inc. (NASDAQ:GOOG) is another popular tech stock among the hedge funds within our database. The total number of firms invested in the company’s Class A shares stood at 113 at the end of the latest quarter, down by eight from the prior quarter, whereas the value of these investments increased to $8.15 billion from $7.36 billion. By the same token, there are 106 hedge funds that own Google’s Class C shares, compared to 108 funds at the end of the first quarter. Google is currently trying to penetrate the domestic wireless networks market with its new “smart router” that is set to enhance WiFi quality and security. The $200 OnHub Smart Router has been designed to control the “internet of things” inside homes, and is likely to unlock a new revenue stream for the tech giant. Andreas Halvorsen’s Viking Global owns 2.74 million Class A shares and 1.15 million Class C shares of Google, making it one of the largest shareholders of the tech company.
Let’s now move on to Microsoft Corporation (NASDAQ:MSFT), which has seen its share price gain slightly over 1% since the beginning of the year. The hedge funds with positions in the stock fell to 105 from 110, while the value of their aggregate investments contracted to $14.99 billion from $16.13 billion. With Windows 10, Microsoft is doing something really different from what it has been doing so far. In the past, the company was working on new versions of Windows for two or three years before launching them. However, the latest version of Windows is set to receive small updates on a regular basis which users will have to pay for, which will represent a steady stream of revenue for Microsoft from now on. From the 737 actively reporting hedge funds that we track, Jeffrey Ubben’s ValueAct Capital holds a $3.55 billion stake in Microsoft, consisting of 75.27 million shares.
Last but not least, we will take a look at how hedge funds feel about Amazon.com Inc. (NASDAQ:AMZN). 103 hedge funds from our database held positions in the company at the end of the second quarter, up from 96 a quarter ago. The value of the positions in Amazon reached $10.46 billion, increasing from $8.40 billion. The shares of Amazon have skyrocketed in 2015, delivering a gain of over 72% year-to-date. The sharp increase in the company’s share price was mainly supported by its strong financial performance this year. Amazon reported earnings per share (EPS) of $0.19 on revenue of $23.18 billion for the quarter, beating the analysts’ estimates of an EPS loss of $0.14 on revenue of $22.39 billion. Fisher Asset Management, established by Ken Fisher, reported owning 2.49 million shares of Amazon through its recent 13F filing for the June quarter.
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