Most Popular Tech Stocks Among Hedge Funds

#T3 Microsoft Corporation (NASDAQ:MSFT)

Investors with Long Positions (as of December 31): 140

Aggregate Value of Investors’ Holdings (as of December 31): $23.42 Billion

Microsoft Corporation (NASDAQ:MSFT)’s stock enjoyed a greater than 20% rise, and that prompted similar rises in its ownership among the funds we track as well as the aggregate value of their holdings during the fourth quarter. Though the stock has fallen by over 7% this year, it hasn’t gone below its crucial support near the $49 level, which technical analysts feel is a very positive sign. Microsoft Corporation (NASDAQ:MSFT) has been consistently increasing its dividend for the last couple of years and currently sports an annual dividend yield of 2.80%. This has resulted in a surge in its popularity among fixed income investors. In the last few months there has been evidence that Microsoft’s cloud platform Azure has been gaining some market share from Amazon’s aforementioned AWS. According to analysts there are two main reasons behind it, the primary one being that AWS doesn’t offer programming changes on its platform like Azure does and the secondary one being that Azure is relatively cheaper than AWS . Philippe Laffont‘s Coatue Management boosted its stake in Microsoft by 77% to 13.34 million shares during the October-to-December period.

#2 Facebook Inc (NASDAQ:FB)

Investors with Long Positions (as of December 31): 145

Aggregate Value of Investors’ Holdings (as of December 31): $10.71 Billion

In spite of being the stock with the smallest aggregate value in terms of investors’ holdings among the funds that we track, Facebook Inc (NASDAQ:FB) was the second-most popular tech stock in terms of number of long positions held at the end of the fourth quarter. It is also the only stock in this list that is trading in the green for the year and technical analysts feel that if the stock can hold above the psychologically important $100 mark, it has the potential to rise further in the short-term. However, a few fundamental analysts have become skeptical of the stock’s rapid rise over the past two-and-a-half years. They think that the company’s earnings must catch up fast to the rise in its stock price or the stock could consolidate at its current levels for many months, if not years. On February 2, The Guardian reported that Facebook has set up a ‘social VR’ team to explore the possibilities for virtual reality beyond gaming, which founder Mark Zuckerberg believes will be the next major frontier in online social interactions. Billionaire Stephen Mandel‘s Lone Pine Capital trimmed its stake in Facebook Inc (NASDAQ:FB) by 9% to 9.78 million shares during the fourth quarter.

#1 Alphabet Inc (NASDAQ:GOOGL)

Investors with Long Positions (as of December 31): 154

Aggregate Value of Investors’ Holdings (as of December 31): $15.10 Billion

Google’s class A shares ranked as the most popular tech stock among the investors in our database, while its class C shares also had 142 hedge fund backers. Overall, $29.3 billion worth of Google’s class A and class C shares were held by investors that we track, second only to the Warren Buffett-backed Wells Fargo & Co (NYSE:WFC). Since the start of 2016, there has been a lot of positive news concerning the company, the most prominent being the letter sent to Alphabet on February 4 by the NHTS, which agreed to recognize its artificial intelligence-backed, self-driving system as a ‘driver’. Investors are also happy that like Microsoft’s Azure, the Google cloud platform has also started giving tough competition to Amazon’s AWS. This became evident recently when the leader in streaming music services ‘Spotify’ announced that its migrating to the Google cloud platform, though it’s unclear if that means Spotify will migrate away from AWS in the process of utilize both services. On February 19, analysts at MKM Partners reiterated their ‘Buy’ rating on Google, while upping their price target on it to $950 from $940. Keith Meister’s Corvex Capital initiated a stake in Alphabet Inc (NASDAQ:GOOGL) during the fourth quarter, purchasing 750,000 class A shares of the company.

Disclosure: None