Why Tesla Motors Inc (TSLA), Microsoft Corporation (MSFT) and Three Other Stocks Are in Spotlight Today

In addition to interest rate sensitive financial names, a number of big name technology companies are in the spotlight today for various reasons.

In this article, let’s analyze why traders are talking about General Electric Company (NYSE:GE), Microsoft Corporation (NASDAQ:MSFT), Tesla Motors Inc (NASDAQ:TSLA), Mobileye NV (NYSE:MBLY), and Alphabet Inc (NASDAQ:GOOG). Let’s also use the latest regulatory data to determine how the smart money was positioned towards the five companies at the end of June.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

Count General Electric Company (NYSE:GE) as the latest multi-national to agree to invest billions into Argentina. Although investors are probably more accustomed to hearing major energy companies agreeing to invest billions to unlock Argentina’s shale potential, Reuters has reported that General Electric will invest an eleven-figure sum, $10 billion, into the South American country over the next decade. Specifically, GE will spend billions to construct several power plants that will add approximately 1 gigawatt of capacity to Argentina’s grid. Under new leadership, multi-national companies are finding the country increasingly hospitable for investment. That means good things for both GE and Argentina, as it means there will be more demand for GE’s energy.  Warren Buffett’s Berkshire Hathaway owned over 10.5 million shares of General Electric Company (NYSE:GE) at the end of June.

Although it might have missed the boat on search and mobile, Microsoft Corporation (NASDAQ:MSFT) certainly doesn’t plan on missing the AI revolution. According to Bloomberg, Microsoft has developed Hanover, an AI machine-learning project that helps cancer-fighting doctors find the right/better treatments for their patients. Specifically, researchers at Oregon Health & Science University’s Knight Cancer Institute are using Hanover to find drug cocktails to fight acute myeloid leukemia. Given how big the healthcare sector is, Microsoft could have another growth sector if the product is successful/and improves over time. The smart money likes Microsoft. Of the around 750 funds that we track, 131 are long Microsoft Corporation (NASDAQ:MSFT) as of the end of the last quarter.

On the next page, we find out why Tesla Motors, Mobileye NV, and Alphabet are in the spotlight.

Investors are keeping an eye on Tesla Motors Inc (NASDAQ:TSLA), Mobileye NV (NYSE:MBLY), and Alphabet Inc (NASDAQ:GOOG) after Federal regulators issued guidelines on Monday for the automated vehicle industry, making it clear that the government thought America’s highways and roadways would be safer if more vehicles were driven by software/machines rather than people. According to the CDC, 33,700 people died from motor vehicle accidents in 2014, making vehicle crashes one of the leading causes of death in the United States.

The director of the National Economic Council Jeffrey Zients was quoted as saying by The New York Tymes: “We envision in the future, you can take your hands off the wheel, and your commute becomes restful or productive instead of frustrating and exhausting’. He added that automated vehicles “will save time, money and lives.”

The government’s tacit approval of automated/semi-automated driving technology is good for Mobileye NV (NYSE:MBLY), which currently has a leading market share in the sector. The news also partly vindicates Elon Musk, who has said that automated driving will save more lives on balance than it will cost. Musk’s Tesla has been criticized before for adopting the latest semi-self-driving technology too quickly. Not to be left out, the news is also good news for Alphabet, which has researched self-driving cars for many years now.

In terms of favorite stocks among the smart money crowd, Alphabet Inc (NASDAQ:GOOG) wins a gold medal, with 135 funds from our database holding class A shares and 126 funds reporting a bullish position in the class C stock as of the end of June. Elon Musk’s Tesla Motors Inc (NASDAQ:TSLA) wins the silver, with 36 top funds owning shares during the same time frame. Given its smaller size, Mobileye NV (NYSE:MBLY) is third on our list, with 25 funds tracked by Insider Monkey reporting stakes as of the end of the second quarter.

Disclosure: none