Apple Apple can often seem like the only game in town given the intense scrutiny and widespread attention the company receives courtesy of its incredible stock performance and blockbuster iPhone sales. But it turns out hedge funds have just as much a vested interest in the company’s success as mom and pop investors.  Nearly one in five stockpicking hedge funds owned at least some Apple shares at the close of 2015, according to a report from Goldman Sachs. Given its weighting as 4% of the S&P 500 by market cap and 5% by earnings per share, it doesn’t come as a total surprise that funds have such a significant exposure to the iPhone maker, with a stock price up 73% over the last year and a market cap that now tops $750 billion.  “Its size and popularity means Apple will be a key driver of hedge fund returns, as well as broad U.S. equity performance and earnings growth,” says Goldman, though it bears noting that Apple’s share of hedge fund equity assets remains below its prior peak in 2012, when the stock first crossed $700 (and before it split 7-for-1 last June).  As of the fourth quarter, 12% of hedge funds held Apple as one of their 10 largest positions, according to Goldman, down from 20% at the last apex of its popularity in 2012 when 33% of funds owned at least some shares. Though the stock was more widely-held at the end of 2014 than in the prior quarter, some well-known hedge fund managers sold or trimmed their stakes in the run to year-end.  Appaloosa Management’s David Tepper sold a 1.2 million share position, while Greenlight Capital’s David Einhorn sold Apple shares for the fourth-consecutive quarter, paring a 9.2 million share stake to 8.6 million shares. Carl Icahn, the biggest hedge fund holder in Apple with a stake of 52.8 million shares (worth nearly $7 billion at Monday’s prices), didn’t budge in the fourth quarter. In fact, he sent a missive to his Twitter followers earlier this month arguing the company is worth more than $1 trillion.  Whether in hedge fund portfolios or in the hands of average investors, it’s clear that Apple’s massive size and continued success — including a holiday quarter that featured iPhone sales of nearly 75 million units — will keep the stock in the market’s focus.  One figure that sticks out: Courtesy of a 17% rally, Apple is responsible for 27.4% of the S&P 500′s year-to-date return, by far the most significant contributor. (Second-place Amazon.com Amazon.com accounts for just 6.6%.) Though hedge funds have ramped up exposure, mutual fund managers are actually underweight Apple according to Goldman Sachs’ weekly kickstart note.  Shares of Apple were up 2% at $132.14, at fresh record highs. Goldman’s Apple analyst Bill Shope has a $145 12-month target on Apple, but could see the stock as high as $172 if revenue and buybacks prove larger than anticipated thanks to factors like iPhone volume, currency impacts and the success of the yet-to-be-launched Apple Watch.
Apple is still a hedge fund darling, but it's also bringing the market along on its race to record highs.