Most Popular Stocks Among Hedge Funds: Part 1 – Tech Giants in Spotlight

Amazon.com, Inc. (NASDAQ:AMZN) is the fifth-most popular company among the funds in our database and is another stock that rewarded investors with returns north of 100% last year. Overall, the number of funds bullish on Amazon climbed by 27 to 140 during the last three months of 2015, while the aggregate value of their holdings surged to $17.30 billion from $14.98 billion. Viking Global reduced its stake in Amazon by 450,318 shares to 2.57 million shares, while Lone Pine Capital added 270,250 shares to life its holding to 2.21 million shares.

Even though Amazon.com, Inc. (NASDAQ:AMZN) missed both the top and bottom line estimates last quarter, it still reported its third profitable quarter in a row with EPS of $1.00 on revenue of $35.75 billion, versus estimates of $1.56 and $35.93 billion respectively. In addition, Amazon is showing solid growth in its Web Services segment, which posted revenue of $2.41 billion, up by 69% on the year. Despite the earnings and revenue miss, analysts are still bullish on the stock and think that the company has still room to expand its margins. The stock has a consensus price target of $726.22, which represents upside potential of 36%.

Finally, the number of funds with long positions in Microsoft Corporation (NASDAQ:MSFT) also increased by 27 to 140, while the aggregate value of those holdings grew to $23.42 billion from $19.31 billion, amid a 28% jump registered by the stock during the fourth quarter. Among the funds we track, Jeff Ubben’s ValueAct Capital unloaded 18.65 million shares of Microsoft Corporation (NASDAQ:MSFT) during the quarter, reporting 56.62 million shares held as of the end of December.

Microsoft CEO Satya Nadella is doing a great job transforming Microsoft Corporation (NASDAQ:MSFT)’s business model and moving the company away from its reliance on the PC amid a declining market, and towards subscription-based software and cloud services. The company’s latest financial results topped expectations, but investors were especially pleased to see 5% annual growth in Intelligent Cloud revenue, to $6.34 billion in the fourth quarter, which included a 140% increase in Azure revenue. As the PC market continues to decline, it still accounts for a significant part of Microsoft’s revenue so all eyes will be focused on the company’s cloud segment to see if it can pick up the slack.

Disclosure: None