While we here at 24/7 Wall St. have always maintained that original thought among portfolio managers at hedge funds is probably not their best quality, one thing is for sure: They find big winners, and they ride them until there is nothing left. That is one of the big reasons that mega-cap technology still dominates the top hedge fund holdings again this year.
A recent Goldman Sachs report noted that the huge earnings miss by Facebook helped speed up what was already a shift from technology to health care. Despite the change in weighting, technology companies are still the top holdings that matter most to hedge funds.
According to Goldman Sachs, these are the five top holdings at hedge funds the firm covers, in order of which is owned the most.
The huge social media leader has been volatile since the disclosure of user data being compromised, and quarterly earnings were miserable on all metrics. Facebook Inc. (NASDAQ: FB) is the largest social network with over 2.0 billion monthly active users and over 1.4 billion daily active users. The company generates revenue from advertising and from payments, with over 95% of revenue from advertising. It generates close to 50% of revenues in the United States and Canada and is expanding rapidly in international markets.
Its solutions also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile and web on various platforms and devices, which enable people to reach others instantly, as well as enable businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.
The Wall Street consensus price target for the stock is $211.03. The shares closed trading on Wednesday at $173.64 apiece.
This absolute leader in online retail and a dominant player in the cloud storage business remains the top pick at Stifel. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.
The company serves developers and enterprises through Amazon Web Services, which provides computing, storage, database, analytics, applications and deployment services that enable virtually various businesses. AWS is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market.
The posted consensus target was last seen at $2,100.02. The stock closed Wednesday’s trading at $1,904.90 per share.