6 'Smart Money' Tech Stocks to Buy

Hedge funds are where millionaires and even billionaires funnel their money to find ways to outperform the market.

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Hedge funds are where millionaires and even billionaires funnel their money to find ways to outperform the market. They don’t always live up to the hype, and they’re constantly derided as too expensive. But they command more than $3 trillion in assets, possess a great deal of institutional brainpower and sometimes do produce the returns they promise. So it’s smart to keep watch over the so-called “smart money” when evaluating stocks to buy.

And right now, they love tech stocks.

WalletHub keeps tabs on hedge funds’ quarterly buying and selling actions. They comb through regulatory positions of more than 400 hedge funds, tally their positions in individual stocks, then rank the stocks by their total holdings value.

More than 20% of hedge funds’ top 25 positions are in tech stocks at the moment – and that figure actually widens if you consider all of the tech-esque stocks that fall into other sectors. Amazon.com (AMZN), for instance, shares space with mall retailers and restaurants in the consumer discretionary sector. Other stocks such as Facebook (FB), Netflix (NFLX) and Google parent Alphabet (GOOGL) are part of the new communication services sector.

Here are the six pure-play tech stocks that the hedge funds love most. Each of these companies features a can’t-miss combination of bulletproof balance sheets and strong growth potential.


Data is as of April 25 unless otherwise noted. Companies are listed in reverse order of popularity with hedge funds, according to WalletHub. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ ratings provided by FactSet via WSJ.com.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.