Another 13F filing period has come to a close and we’ve sifted through the hundreds of filings that were submitted with the SEC by the select group of hedge funds in our database. We’ll be presenting dozens of articles over the coming days detailing the latest noteworthy changes in stock ownership among those hedge funds and what it might mean for the future performance of those stocks, so don’t miss out on our findings.
In this article we’ll focus on the five favorite tech stocks of the billionaires in our database as of June 30. They are (in no particular order, yet) Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), Facebook Inc (NASDAQ:FB), and Amazon.com, Inc. (NASDAQ:AMZN). Read on to find out how these titans of the tech industry ranked among the titans of the investing world.
Through extensive research that covered the 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).
#5 Apple Inc. (NASDAQ:AAPL)
– Number of Billionaires With Long Positions (as of June 30): 15
– Aggregate Value of Billionaires’ Holdings (as of June 30): $4.80 billion
We start with Apple, which checks in at the fifth spot with 15 billionaires being long its shares at the end of June, down from 17 at the end of March. Billionaires Leon Cooperman (Omega Advisors) and John Griffin (Blue Ridge Capital) closed out of their positions during the second quarter, with Blue Ridge Capital’s position having been worth over $211 million at the end of March. Billionaire Warren Buffett (Berkshire Hathaway) buffed his Apple holding by 55% to 15.23 million shares, while Ken Griffin (Citadel Investment) hiked his own Apple stake by 70% to 2.92 million shares.
Apple Inc. (NASDAQ:AAPL) shares are back on the upswing again after having plunged to a 52-week low in mid-May. Apple’s fiscal third quarter earnings report helped to ease tensions concerning the company’s growth, though warning signs still abound, including a big loss of smartphone market share in China during the second quarter. Nonetheless, several analysts believe that Apple’s valuation is extremely attractive at present, with Drexel Hamilton analyst Brian White stating in late-July that shares were trading at just 8.7-times their calendar year 2017 EPS estimate. Drexel Hamilton has a $185 price target on the stock.
#4 Alphabet Inc (NASDAQ:GOOG)
– Number of Billionaires With Long Positions (as of June 30): 17
– Aggregate Value of Billionaires’ Holdings (as of June 30): $4.42 billion
Alphabet’s Class C shares finished fourth (its Class A shares were seventh) with 17 billionaires in our system owning them on June 30, down from 19 at the end of March. Its Class A shares took a more severe tumble, also falling from 19 billionaire shareholders on March 31 to just 13 on June 30. Billionaire Steve Cohen (Point72 Asset Management) sold off his 34,000-share Alphabet Inc (NASDAQ:GOOG) position during the second quarter, while billionaire Thomas Steyer (Farallon Capital) added 84,080 shares to his holding, lifting it to 327,503 shares.
Like Apple, Alphabet’s GOOG shares have also endured a turbulent run this year but are on the upswing at the moment, having gained 8% over the last month. Alphabet’s Google division remains a key driver of the holding company’s top-line growth, as mobile searches surged past the 50% mark in terms of overall searches during the second quarter, while aggregate cost per click declined by just 7% year-over-year, an improvement from the first quarter’s 9% decline and the fourth quarter of 2015’s 13% fall. Alphabet’s cloud services segment is also showing strong growth, though it represents a meager portion of its overall top-line at this point.
We’ll reveal billionaires’ three most-loved tech stocks on the next page.
#3 Amazon.com, Inc. (NASDAQ:AMZN)
– Number of Billionaires With Long Positions (as of June 30): 19
– Aggregate Value of Billionaires’ Holdings (as of June 30): $9.55 billion
Amazon ranks third, as 19 billionaires were long the stock at the end of June, an increase of three quarter-over-quarter. Steve Cohen invested some of the money from that sold off Apple position into Amazon, as his family office added 536,020 Amazon shares to its portfolio during the quarter. Ken Griffin and Chase Coleman (Tiger Global Management) also added large chunks of shares to their holdings, while Israel Englander (Millennium Management) opened a new position of 411,621 shares.
Amazon.com, Inc. (NASDAQ:AMZN) has been a strong performing e-commerce stock this year, having posted gains of 13%. While Wal-Mart Stores Inc. (NYSE:WMT) is investing billions in an attempt to close the e-commerce gap with Amazon, including through its recent $3 billion purchase of Jet.com, many analysts aren’t convinced that the move will do much to help Wal-Mart’s cause. For one, Amazon has a greater than 50-million-subscriber headstart for its fast shipping platform in the U.S., with Wal-Mart recently having launched a cheaper version (though with less features) of its own. Amazon is also well ahead in its efforts to make drone deliveries a reality, which could prove to be pivotal.
#2 Facebook Inc (NASDAQ:FB)
– Number of Billionaires With Long Positions (as of June 30): 20
– Aggregate Value of Billionaires’ Holdings (as of June 30): $7.04 billion
Facebook lands at number two with the same number of billionaire shareholders of its stock as it had a quarter earlier: 20. Billionaire Dan Loeb (Third Point) opened a huge new Facebook position during the second quarter, consisting of 3.75 million shares, while Ray Dalio (Bridgewater Associates) sold off 63% of his Facebook position, leaving it with 23,600 shares.
Facebook Inc (NASDAQ:FB) only seems to be picking up more and more steam with each passing quarter. The dominant social network added 15% more users year-over-year during the second quarter to reach 1.71 billion monthly active users, or about 23% of the world’s population. Even more impressive is the fact that the revenue the company is generating from each user is also increasing by leaps and bounds, rising by 38.4% during the quarter. Of some concern is that Facebook registered mild daily and monthly user dips quarter-over-quarter in North America and Europe. Ad load growth is also slowing, with J.P. Morgan anticipating declines in each of the next two years.
#1 Microsoft Corporation (NASDAQ:MSFT)
– Number of Billionaires With Long Positions (as of June 30): 22
– Aggregate Value of Billionaires’ Holdings (as of June 30): $7.73 billion
Microsoft tops the list of billionaires’ favorite tech stocks, with the total number of such shareholders jumping by five over the second quarter to 22. Some of the billionaires to go long Microsoft during the quarter were Julian Robertson (Tiger Management), Michael Hintze (CQS Cayman), and Andreas Halvorsen (Viking Global). The quant funds run by billionaires Jim Simons and Ken Griffin also made huge additions to their Microsoft holdings during the quarter.
Microsoft Corporation (NASDAQ:MSFT) has not disappointed the score of new billionaire investors thus far, gaining over 13% in the third quarter and hitting its all-time high. Like Amazon and Alphabet, Microsoft also has a burgeoning cloud platform, Azure, one that could even supplant Amazon’s AWS as the leader in the cloud IaaS market thanks to its hybrid cloud model. In July, Microsoft announced that General Electric Company (NYSE:GE)’s Predix platform would be made available on Azure, allowing industrial businesses to make greater use of the data culled from their machines.