Tech stocks had a great performance in 2017, with many analysts and investors praising them with aiding the rally and record highs registered by the S&P 500 and NASDAQ Indexes. The so-called FAANG stocks (Facebook Inc (NASDAQ:FB), Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL)-owned Google) soared by over 47% last year and were solely responsible for 5.2 percentage points of the 24% gain registered by the S&P 500.
Moreover, after strong gains last year, the consensus on the Street is that tech stocks are still on fire and are poised for a double-digit growth this year, although there are some opinions that due to high valuations, many big investors will exit these stocks, which in turn might create a correction, as the one that we have witnessed earlier this year.
Nevetheless, technology is constantly developing and there are always new trends, such as Artificial Intelligence, Virtual/Augmented Reality, or Blockchain. Therefore, the tech sector will always be in the investors’ crosshairs. Even big and well-established tech companies that offer more safety are looking into new ways to diversify their businesses and tap into new markets for growth.
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When it comes to picking which tech stocks to invest in, there are many different opinions regarding the company size, industry, valuation, or other factors. At Insider Monkey, we are looking at where smart money prefers to invest its capital and we track over 600 hedge funds to get an idea about the collective sentiment among hedge funds towards various stocks. We use this data to identify the best stocks in the small-cap space, which we then use in our small-cap strategy, which has outperformed the broader market by over 20 percentage points in the last four years. But we also can look at what stocks hedge funds like or dislike outside small-caps. One particular group of investors that we will focus on in this article are billionaires.
Billionaire investors are an interesting group to follow. On the one hand, these are people that have earned their fortunes through generating substantial returns for their clients and we can assume that they have the skills and expertise to build a more complex picture of a company than retail investors. However, billionaires also manage large amounts of capital, which means that they can’t be as flexible as smaller funds and they often have to trade higher returns for a smaller level of risk.
We can’t get the reasoning behind a billionaire’s investment in a particular stock, but focusing on their collective sentiment, we can identify their favorite stocks. For this article, we have compiled a list of five technology stocks that saw the largest number of billionaire investors holding long positions in as of the end of 2017.