Stock-picking hedge funds have become more selective on megacap technology stocks after their drastic rallies, according to VerityData. The research firm identified “fundamental” hedge funds that disclosed 10 to 300 holdings and aggregate holdings of at least $100 million in recent 13F filings. The firm analyzed about 560 hedge funds with disclosed equity holdings totaling approximately $790 billion and identified the companies that most frequently appear among the largest 10 holdings. Microsoft continued to be the most popular stock among those hedge funds, extending its No.1 status to a seventh quarter, according to the data. The analysis showed that 139 funds — four more than the quarter prior — owned the tech name as a top 10 holding. On April 25, Microsoft reported fiscal third-quarter results that exceeded estimates on the top and bottom lines. The company has been increasing its capital expenditures to secure Nvidia graphics processing units for training and running artificial intelligence models. Amazon ‘s popularity increased significantly with 14 more funds adding it as a top holding last quarter, marking its best level since the second quarter of 2022, according to VerityData. The e-commerce giant reported better-than-expected revenue and earnings last quarter. Its advertising revenue grew 24% in the first quarter, outpacing retail and cloud computing. The stock is up roughly 20% this year. Several hedge funds also flocked to Nvidia despite its jaw-dropping advance over the past year, the data said. All eyes are on the chipmaker’s quarterly earnings report on Wednesday as year-over-year revenue growth is expected to top 200% for a third straight period. Nvidia shares are up more than 90% this year after soaring nearly 240% in 2023. Less popular On the flip side, hedge funds dialed back their exposure to Alphabet and Apple last quarter. The data showed that Apple’s popularity declined for the third straight quarter, hitting the lowest level since the second quarter of 2019. The iPhone maker recently got a boost after the company announced that its board had authorized $110 billion in share repurchases , the largest in company history. The firm reported a 10% revenue decline in iPhone sales last quarter, however. Still, the data showed Tesla’ s popularity decline was the most dramatic in the first quarter, going from 18 funds owning it as a top holding at the end of 2023 to just three by March. The electric-vehicle company recently posted a drop in first-quarter revenue , the biggest decline since 2012, as the company weathers the effect of ongoing price cuts.
