We have gone through our database of hundreds of 13F filings from hedge funds and other notable investors for the first quarter of 2012, which disclose their long equity positions as of the end of March. There are a few ways for investors to potentially use this information. For one, we have found that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy) and we think that more techniques are possible as well. We also like to see what hedge funds’ favorite stocks are in a number of categories, including tech stocks. Here are the ten tech stocks which the largest number of filers reported owning:
The most popular stock overall- and therefore the tech leader as well- was Apple Inc. (NASDAQ:AAPL). Apple Inc. (NASDAQ:AAPL) regained its place as the most popular stock among hedge funds from AIG, with 148 of the filers we track reporting a position. Apple Inc. (NASDAQ:AAPL) is down 22% in the last year, and its earnings are down on lower margins, but it is a popular value pick given its earnings multiples in the 10-11 range.
Google Inc (NASDAQ:GOOG) was right behind Apple Inc. (NASDAQ:AAPL) in our ranking of tech stocks, with a number of funds taking on new positions in the company during Q1. Billionaire and Tiger Cub Stephen Mandel’s Lone Pine Capital cut its stake slightly, but still had over $1 billion invested in Google Inc (NASDAQ:GOOG) at the end of March (check out Mandel’s stock picks).
96 hedge funds and other notable investors reported a position in QUALCOMM, Inc. (NASDAQ:QCOM) in their filing. Fisher Asset Management, managed by billionaire Ken Fisher, was one of the filers interested in the communications equipment company; it had 8.9 million shares in its portfolio at the end of the quarter (find Fisher’s favorite stocks).
We show eBay Inc (NASDAQ:EBAY), which owns a growing payments business (including PayPal) as well as its online auction site, as the fourth most popular tech stock with 93 owners at the beginning of April. Citadel Investment Group was a heavy buyer of eBay Inc (NASDAQ:EBAY); that fund is managed by billionaire Ken Griffin (research more stocks Citadel was buying).
Several hedge funds were selling Microsoft Corporation (NASDAQ:MSFT), causing it to tumble two places in our rankings. Yacktman Asset Management bucked this trend, increasing its stake by 39% between January and March to a total of over 41 million shares- giving it $1.2 billion invested in the stock.
$10.5 billion market cap data center services company Equinix Inc (NASDAQ:EQIX) rose into sixth place in terms of popularity among tech stocks, being owned by 71 funds. Billionaire John Paulson’s hedge fund was one major shareholder in Equinix Inc (NASDAQ:EQIX) (see more stocks Paulson likes).
Also rising in prominence a bit as several hedge funds took new positions- despite low profitability- was Amazon.com, Inc. (NASDAQ:AMZN). SAC Capital Advisors, managed by billionaire Steve Cohen, more than tripled its holdings of Amazon.com, Inc. (NASDAQ:AMZN) to a little over 880,000 shares (here are more stocks SAC owns).
69 hedge funds and other notable investors disclosed ownership of shares of enterprise software company Oracle Corporation (NASDAQ:ORCL). Oracle Corporation (NASDAQ:ORCL) has been one of the top picks of Eagle Capital Management, and that fund owns close to $1 billion worth of the stock after having been a buyer in the first quarter of 2013.
A few hedge funds closed their positions in Priceline.com Inc (NASDAQ:PCLN) but it still managed to make our list as the ninth most popular tech stock. Priceline.com Inc (NASDAQ:PCLN) is a favorite among Tiger Cub funds; their mentor, billionaire Julian Robertson, counted it as one of his picks as well (find more stock picks from Julian Robertson).
Coming in 10th on our list of the most popular tech stocks among hedge funds was Yahoo! Inc. (NASDAQ:YHOO). Billionaire Dan Loeb, manager of Third Point, has taken on a major activist role at the company, helping replace its CEO; that fund owned 62 million shares at the end of March (check out what else it owned).
Disclosure: I own no shares of any stocks mentioned in this article.