It’s been a busy week as usual in the tech sector. Not only are governments in certain regions making life difficult for some companies, but other tech companies have also experienced some man-made setbacks.
In this article, we’ll take a closer look at the notable events that occurred to Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), NVIDIA Corporation (NASDAQ:NVDA), Alphabet Inc (NASDAQ:GOOGL), and Hewlett Packard Enterprise Co (NYSE:HPE) over the past week. We’ll also use the latest SEC filings to determine how hedge funds positioned themselves among the five stocks in the second quarter.
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EU Commission Slaps Apple With Back Taxes
Apple Inc. (NASDAQ:AAPL) was in the headlines this week after the EU commission ordered Ireland to charge the tech company as much as $14.5 billion in back taxes plus interest. The EU commission did so because it felt that Apple was unfairly using various rules to lower its overall tax rate in the continent. Apple CEO Tim Cook responded by saying that the move was “total political crap.” Many experts expect Apple and Ireland to appeal the EU commission’s decision and for the U.S. government to fight for the status quo in terms of taxes. In other news concerning the tech giant, Tim Cook said that the company could repatriate billions of dollars of overseas profits back into the United States as soon as next year. If Apple does that, it will have more money to buy back its stock. Apple currently has over $200 billion in cash and other liquid securities overseas. David Einhorn‘s Greenlight Capital owned 6.8 million shares of Apple Inc. (NASDAQ:AAPL) at the end of the second quarter, down by 17% sequentially.
Facebook Free Internet Initiative Runs Into Fast Fire
Facebook Inc (NASDAQ:FB)‘s initiative to bring internet to tens of millions of people in third-world countries who otherwise wouldn’t be able to afford it ran into a setback after a SpaceX rocket carrying one of Facebook’s internet satellites suffered a fast fire, causing it to blow apart at launch. Due to the fast fire, Facebook’s timeline to bring internet to certain parts of the world (in this case Africa), will likely be postponed for a few months. Although the hundreds of millions of potential users in third-world countries who can’t afford internet won’t make much of a difference in terms of profits in the near-term, they have to potential to make a big difference down the road. 148 hedge funds that we track owned shares of Facebook Inc (NASDAQ:FB) as of the most recent 13F reporting period, down by 16 funds from the end of March.
On the next page, we’ll examine the week’s developments concerning NVIDIA Corporation, Alphabet Inc, and Hewlett Packard Enterprise.
NVIDIA Strikes Up An Alliance With Baidu
NVIDIA Corporation (NASDAQ:NVDA) trended this week after it struck a deal with Chinese search giant Baidu Inc (ADR) (NASDAQ:BIDU) to work together to build a self-driving car. Self-driving cars are the next big thing in tech given the overall market size and the need for robust artificial intelligence software in the vehicles. Many analysts expect the self-driving vehicle market to become huge in China given the country’s population and the strong demand for ride-sharing services. Bulls hope the effort will increase demand for NVIDIA’s GPU’s and other chips in the long run. Of the 749 hedge funds that we track which filed 13F’s for the June quarter, 50 were long NVIDIA Corporation (NASDAQ:NVDA) at that time.
Alphabet Encroaches on Uber’s Turf
Although it owns a sizable stake in the startup and Uber uses Google Maps, Alphabet Inc (NASDAQ:GOOGL) is becoming more and more a competitor to the ride-sharing app. Just this week, Alphabet announced that it will broaden its car-pool program in the fall to allow riders and drivers in San Francisco to commute together when going in the same direction. For now, Alphabet’s car-pooling program isn’t a direct competitor to Uber, as Alphabet won’t get a cut of the revenue and the fees charged will just cover depreciation and gas for the driver. In the future however, given Alphabet’s self-driving research and its ambitious goals, the odds are good that Alphabet will directly challenge Uber. 187 hedge funds in our system owned either the class A or class C shares (or both classes) of Alphabet Inc (NASDAQ:GOOGL) at the end of June.
Hewlett Packard Enterprise Considers Selling a Unit
Hewlett Packard Enterprise Co (NYSE:HPE) was in the spotlight this week after Reuters reported that the company is in talks with private equity firm Thoma Bravo over a potential sale of its software segment. Although Hewlett Packard Enterprise previously received offers of as much as $7.5 billion for the unit according to some sources, the company hopes to garner a sum of between $8 billion and $10 billion from Thoma Bravo. If that occurs, Hewlett Packard’s management could use some of the money to buy back its stock. Hewlett Packard Enterprise is considering selling the unit to focus more on its core storage, networking, and data center competencies. Many analysts believe that selling the software segment is the right choice in terms of unlocking value. 63 funds in our database were long Hewlett Packard Enterprise Co (NYSE:HPE) at the end of the second quarter, up by 12 funds quarter-over-quarter.