This Week in Technology: Tesla, Microsoft, Twitter, and More

It was an eventful week in the technology sector. Not only did several big companies report their latest quarterly results, but also potential M&A activity has perked up.

In this article, we will take a look at the developments that surrounded Tesla Motors Inc (NASDAQ:TSLA), Microsoft Corporation (NASDAQ:MSFT), Twitter Inc (NYSE:TWTR), Time Warner Inc (NYSE:TWX), and AT&T Inc. (NYSE:T) this week. In addition, we will assess the hedge fund sentiment towards the companies in question.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

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Tesla Motors Inc (NASDAQ:TSLA) shares inched up by 1.8% from Monday through Friday, versus the NASDAQ’s 0.83% advance. One reason for the bullishness was Tesla’s announcement this week that all vehicles it currently makes will have full self-driving hardware. If Tesla executes, and its cars become fully autonomous in several years, the company could feasibly compete against Uber and Lyft by allowing Tesla owners to rent out their vehicles to the company’s potential ride-sharing network, Tesla Network. That would not only give Tesla a potential Uber style cut of the revenue from ride sharing, but also it would make Tesla cars more affordable (as the owners of the vehicles can use their cut of the ride sharing fees to pay down their monthly bills). Of the 749 funds we track, 36 funds owned $1.13 billion worth of Tesla Motors Inc (NASDAQ:TSLA)’s stock, which accounted for 4.00% of the float on June 30, versus 39 funds and $1.08 billion, respectively, on March 31.

Microsoft Corporation (NASDAQ:MSFT) surged to an all-time high of on Friday after it reported better-than-expected fiscal first quarter results. During the period, Microsoft earned $0.76 per share on revenue of $22.3 billion, beating the consensus estimates by $0.08 and $590 million, respectively. Sales appreciated by 3% year-over-year, as Azure sales jumped by 116% and the company continued to make headway in the cloud space, with cloud margins improving and the company’s position in the segment strengthening. With its growing cloud sales, the company working to integrate AI to all its products, and the Hololens eventually hitting the market, Microsoft certainly has plenty of growth in the future to support its attractive dividend even if PC sales continue to shrink. Ken Fisher’s Fisher Asset Management raised its stake in Microsoft Corporation (NASDAQ:MSFT) by 1% to 18.37 million shares in the third quarter.

On the next page, we recap the weekly events that occurred to Twitter, Time Warner, and AT&T.