Facebook Dominates List of Most Popular Tech Stocks Among Hedge Funds

Privacy concerns and slowing user growth haven’t dampened hedge funds’ enthusiasm for Facebook Inc (NASDAQ:FB) in the slightest. The latest hedge fund ownership data compiled by Insider Monkey shows that the social media giant is far and away the most popular stock among the funds that we track, based on the latest quarterly 13F filings, the deadline for which was Tuesday.

It’s an exciting time for Insider Monkey’s subscribers, who are given access to the latest batch of quarterly stock picks shortly after the filing period ends. Those subscribers have good reason to be optimistic about their new stock picks; Insider Monkey’s flagship “Best Performing Hedge Funds Strategy” has returned 107.5% since its May 2014 inception, crushing the S&P 500 by over 40 percentage points during that time. Check out a detailed analysis of Insider Monkey’s past performance and quarterly stock picks for all the details.

In this article, we’ll share the list of the five most popular tech stocks among the hedge funds in our system as of June 30, beginning with the first trillion-dollar public company.

5. Apple Inc. (NASDAQ:AAPL)

Apple Inc. (NASDAQ:AAPL) actually fell to sixth behind NXP Semiconductors NV (NASDAQ:NXPI) as of June 30 in terms of tech stock hedge fund ownership. However, as we don’t traditionally include M&A plays on these rankings, Apple holds on to fifth on the list.

Some hedge funds don’t seem to have been overly impressed with Apple’s fiscal second-quarter results released at the end of April, as multiple hedge funds sold off the stock during the second-quarter, including Ray Dalio’s Bridgewater Associates, Louis Bacon’s Moore Global Investments, and Matthew Tewksbury’s Stevens Capital Management. 90 hedge funds in our system owned the tech giant on June 30, down from 97 on March 31.

Apple Inc. (NASDAQ:AAPL)  became the first publicly-traded U.S company to hit a $1 trillion valuation on August 2, two days after the release of strong fiscal Q3 results. However, Dan Niles of AlphaOne Capital Partners recently told CNBC that the U.S/China trade war should “really concern” investors, noting that China accounted for 18% of Apple’s revenue during its latest fiscal quarter. AlphaOne Capital Partners unloaded most of its relatively small Apple position in Q2.

4. Altaba Inc (NASDAQ:AABA)

Hedge funds were overweight Altaba Inc (NASDAQ:AABA) far more than any other tech stock on this list, owning 37.8% of its shares on June 30, though the number of hedge funds owning the stock declined to 95 from 100 during the second-quarter. Among the funds that were long Altaba on June 30 were David Abrams’ Abrams Capital Management, Paul Singer’s Elliott Management, and Daniel Och’s OZ Management.

Altaba Inc (NASDAQ:AABA) manages the former assets of Yahoo! that weren’t included in that company’s sale to Verizon Communications Inc. (NYSE:VZ). Those assets include billions in cash, a nearly 15% stake in Alibaba Group Holding Ltd (NYSE:BABA) (which its performance closely mirrors) and a diminishing stake in Yahoo! Japan. Altaba agreed to sell a third of its stake in Yahoo! Japan to Softbank in July, which will give the Japanese conglomerate majority ownership of Yahoo! Japan.

Head to the next page to uncover the 3 runaway favorite tech stocks among hedge funds.

3. Alphabet Inc (NASDAQ:GOOGL)

Alphabet Inc (NASDAQ:GOOGL)’s two classes of shares ranked third among hedge funds, with 125 funds owning its class A voting shares and 122 funds owning its non-voting class C shares as of June 30. Those figures were up slightly from 124 and 118 respectively on March 31. Among the owners of both classes of shares were Cliff Asness‘ AQR Capital Management, Ken Griffin’s Citadel Investment Group, and Ken Fisher’s Fisher Asset Management.

Alphabet Inc (NASDAQ:GOOGL) has recently drawn criticism even among its own employees for its plans to re-enter the Chinese market with a censored search engine. Google operated a similar search engine from 2006-2010 before pulling out of the country. Given its dominant global position in search, which netted the holding company over $28 billion in advertising revenue in Q2, the plans raise serious ethical and moral questions. There would be nothing to stop Google from doing the same in any other market, for whatever reason it deems valid, if censorship is not something the company stands against in all facets. Alphabet shares are down by 3% since the announcement.

2. Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) easily holds down second spot, as 161 hedge funds that we follow were long the stock at the end of June, up from 152 a quarter earlier. Jason Karp‘s Tourbillon Capital Partners, Barry Rosenstein’s JANA Partners, and Larry Robbins’ Glenview Capital were among the funds opening Microsoft positions in Q2.

Microsoft Corporation (NASDAQ:MSFT) is in the midst of another strong year on the stock market, gaining 25% year-to-date. Microsoft’s Commercial Cloud continued its rapid ascent in the second-quarter, generating $6.9 billion in revenue, a 53% year-over-year hike. The public cloud service Azure did even better, with revenue soaring by 89% from a year ago. Revenue at LinkedIn jumped by 37%, while Microsoft’s Xbox-specific division and its broader gaming division both rose by over 35%.

1. Facebook Inc (NASDAQ:FB)

A staggering 193 hedge funds were long Facebook Inc (NASDAQ:FB) at the end of June, representing 30% of the 645 hedge funds in our system that filed 13Fs during the latest period. That was an increase from 180 hedge funds on March 31 and kept Facebook comfortably atop the list of the most popular tech stocks among hedge funds, as well as the list of the most popular stocks overall.

While Facebook Inc (NASDAQ:FB)’s own social media platform has had its shares of controversies and continues to lose steam among younger demographics, the company’s Instagram platform is more than making up for it. The platform has pushed past 1 billion monthly active users, the vast majority of which are under 35 years of age, and now accounts for more than 25% of Facebook’s revenue. The platform is estimated to be worth $100 billion now, just six years after Facebook paid a paltry $715 million to acquire it.

Disclosure: None