The latest data shows that global hedge funds rushed to snap up shares of tech giants in January, with Amazon (AMZN) emerging as the most favored target. According to a monthly report released by Hazeltree, a company providing treasury and liquidity management software for the alternative investment industry, Amazon was the top-held large-cap stock among the over 700 hedge funds it tracks.
Hazeltree’s report calculates a “crowdedness” score for each stock by sector and region using its proprietary method. This score intuitively reflects the number of hedge funds holding a particular stock. In January’s rankings, Amazon’s long-term crowdedness score reached an impressive 99, indicating it appeared in the most hedge fund portfolios. Following closely was Microsoft (MSFT), securing the second spot in North America with a crowdedness score of 82. AI chip giant Nvidia (NVDA) ranked third with a score of 80, Meta Platforms came in fourth with 72, and Broadcom (AVGO) rounded out the top five with a score of 68.
The report reveals that institutional investors are attempting to find entry points following the tech stock sell-off that extended from late 2025 into early 2026. For instance, Amazon’s stock price has fallen nearly 20% from its peak last October. As of the end of January, the stock was down approximately $11 year-to-date, with its current valuation appearing relatively reasonable, sporting a forward P/E ratio of around 28 times. Market concerns primarily focus on Amazon’s planned massive capital expenditure this year – a whopping $200 billion, representing an increase of about 50% from last year. Many investors view this as a negative signal, worried about over-investment in AI infrastructure with uncertain returns, especially as its core profit driver, Amazon Web Services (AWS), faces intense competition from Microsoft and Alphabet, leading to continued market share loss.
However, most hedge fund managers seem to view this as a long-term positive factor. They believe Amazon must increase its investment in AI infrastructure and capabilities to maintain its leading position and effectively fend off competitive challenges. Wall Street analysts are also generally optimistic. Currently, a substantial 92% of analysts rate Amazon as “Buy,” with the remaining 8% rating it as “Hold.” The median price target for the stock is $285 per share, suggesting a potential upside of about 39% from current levels.
Microsoft and Nvidia are also favored by hedge funds. Microsoft’s forward P/E ratio dropped to 30 times by the end of 2025, prompting investors to enter at what they perceived as undervalued levels, despite the stock being down about 20% year-to-date. Wall Street analysts are also highly bullish on Microsoft, with 92% giving it a “Buy” rating. Its median price target of $600 per share implies a 55% upside potential.
While Nvidia’s trailing P/E ratio remains high at 55 times, its forward P/E ratio is just 29 times. Furthermore, its five-year price/earnings-to-growth (PEG) ratio, which reflects long-term growth expectations, stands at 1. This suggests that, based on future earnings expectations, its long-term investment value is beginning to emerge.
The report concludes by reminding investors that although the actions and views of hedge funds and Wall Street analysts provide important references, investors still need to make independent decisions based on their own research. However, the three tech giants – Amazon, Microsoft, and Nvidia – are undoubtedly key subjects warranting close market attention at present.
