A number of meaningful events have occurred in the technology sector this week, including Apple introducing the newest models of its flagship phone, the iPhone 7 and 7 Plus.
In this article, let’s take a look at the news surrounding Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Advanced Micro Devices, Inc. (NASDAQ:AMD), Intel Corporation (NASDAQ:INTC), and Twitter Inc (NYSE:TWTR) last week and use the latest 13F data to see how hedge funds traded the tech stocks in the second quarter.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Apple Inc. (NASDAQ:AAPL) shares were in the spotlight this week after the company introduced the iPhone 7 and 7 Plus, both of which lack headphone jacks, as Apple increasingly trends to a more wireless future. According to the products’ specifications, the new iPhone 7’s will have better processors and the entry level model will have double the storage. In a break from tradition, Apple won’t provide pre-order sales volume and first weekend sales data for the new phones like it has before. Because the company believes the figures are “governed by supply, not demand” initially, Apple thinks the data is not relevant. Apple’s sudden reluctance to share that data could also be due to the company facing rumored supply issues, which might lead to first-weekend sales figures that would be a disappointment. Despite the change, however, Apple’s management has reiterated its financial guidance for the September quarter, of $45.5 billion-to-$47.5 billion in sales and between 37.5% and 38% in gross margin. Warren Buffett‘s Berkshire Hathaway raised its stake in Apple Inc. (NASDAQ:AAPL) by 56% to over 15.2 million shares in the second quarter.
Amazon.com, Inc. (NASDAQ:AMZN) captured investors’ interest this week after two sources speculated on where the company might seek to expand next. First, according to Bloomberg, Amazon is said to be interested in buying up streaming rights to certain live sports events such as rugby and tennis matches. By grabbing the streaming rights, Amazon would offer something that Netflix, Inc. (NASDAQ:NFLX) currently doesn’t. Secondly, according to Business Insider, Amazon is considering opening ‘dozens’ of miniature retail storefronts in malls across the U.S. over the next 12 months. According to the article, the pop-up stores will sell Amazon’s hardware electronics devices such as its Echo speakers and Kindle readers. The ultimate goal of the stores is to drive more traffic to Amazon’s website. 145 funds in our system were long Amazon.com, Inc. (NASDAQ:AMZN) at the end of June.
On the next page, we’ll examine the news that impacted AMD, Intel, and Twitter last week.