While many different factors can influence the stock market, one of the most important to many retail investors may be the actions of hedge funds. That’s because hedge funds are often known as the smart money to be followed, particularly in times of uncertainty. Notably, one group of stocks that hedge funds have been buying in recent months are tech stocks.

While the tech sector has been volatile recently, many analysts believe it is due for a rebound. Thus, it shouldn’t be surprising to see that hedge funds have been scooping up shares of specific companies. Of course, there is no guarantee that these stocks will go up in value, but they could provide substantial profits for hedge fund investors if the markets rebound next year.

These large institutional investors have the resources and expertise to buy or sell large amounts of stock rapidly, and their decisions can significantly impact the market. If you’re looking for an edge in the tech corner of the stock market, you may want to take a closer look at hedge fund activity. That’s because hedge fund managers are some of the savviest investors and often have access to information that the general public doesn’t.

In picking companies for this list, we include only those growth stocks that saw positive hedge fund activity last quarter. Hence, even if a growth stock experienced a selloff in the last quarter, it is not included in this list.

With that out of the way, let’s look at some tech stocks that hedge funds are buying.

Shopify (SHOP)

Hedge funds increased their holdings by about 9 million shares last quarter.

Shopify (NYSE:SHOP) provides an online platform for e-commerce businesses. Recent sales across Shopify’s ecosystem have been impressive, but a net loss in the third quarter has some investors concerned. This has led to a declining stock price, with SHOP stock dipping more than 68% in the year, as macro concerns compound uncertainty around profitability.

That said, unlike the broader markets, Shopify is one of the tech stocks that hedge funds are taking an interest in right now. The stock has been battered this year, but hedge funds apparently see the long-term value in the company.

There are solid reasons why hedge funds are investing in this e-commerce player. Shopify is a leading back-end processing and middleware service provider for entrepreneurs to develop, manage, and scale their e-commerce businesses globally. Corporations use Shopify to increase sales by cutting operational costs, including manufacturing and marketing expenses.

Recent results for this company’s platform have also been impressive. During this year’s Black Friday and Cyber Monday selling spree, its merchants sold a record $7.5 billion of goods globally. This represents 19% growth from the previous year, despite the unfavorable impact foreign currency rates have had on this metric.

This growth rate shows that Shopify is continuing to provide value to its clientele and end customers. Despite bearish economic conditions, e-commerce activity remains strong. For those taking a long-term view of this sector, now may be the time to consider SHOP stock.

Uber (UBER)

Hedge funds are becoming increasingly active and purchased  3.8 million UBER shares last quarter.

Ride-hailing company Uber (NYSE:UBER) is evolving, and hedge funds appear to be buying into the vision. This vote of confidence from hedge funds comes amid relatively mixed results of late.

While the company was able to offset pandemic losses through its Uber Eats service, write downs for equity investments led the company to report a loss in the latest quarter. That said, bulls on UBER stock may note that the company is working to improve its model. The company is becoming more efficient and is thus becoming more attractive to hedge funds and other investors, particularly at these levels.

Despite inflationary pressures, Uber’s revenue in the third quarter jumped 72% to $8.34 billion from $4.85 billion in the year-ago quarter. A significant chunk of revenue growth is attributable to its November 2021 acquisition of Transplace, a freight company. All of the Transplace bookings were noted as revenue. Nevertheless, Uber’s gross bookings increased by 26% year-over-year, which means the platform remains very popular.

In addition, Uber is looking to diversify its revenue streams. This diversification will allow Uber to maintain its revenue growth, should economic conditions deteriorate. Given the company’s strategic vision for the future, this should bode well for long-term investors. Uber Eats is among the best examples of a strategic pivot that has worked for the company.

The latest potential diversification-based pivot I’m watching is the company’s push into the advertising space. In October, the ride-hailing giant launched a new advertising division that it believes could result in a “$1 billion-plus revenue opportunity by 2024.” Creating a dedicated ad division is a great way to diversify and grow revenue. At the same time, it has the potential to benefit investors greatly over the long-term.

Qualcomm (QCOM)

Hedge funds increased their holdings of Qualcomm stock by 101,600​​ shares in the last quarter.

Qualcomm (NASDAQ:QCOM) has long been a powerhouse in the semiconductor and 5G markets. That said, even this industry leader hasn’t been immune to the recent tech selloff.

Despite poor momentum and price performance of late, hedge funds appear to be seizing on the opportunity to buy shares of Qualcomm at a discount. It appears many in the hedge fund world are betting that the stock will rebound in the coming months. There are a number of reasons for such a view, as Qualcomm’s stock is trading well below its 52-week high.

For the fourth quarter, Qualcomm’s non-GAAP net income rose 22% year-over-year, and revenues of $11.4 billion were also up by 22.1%. For the fiscal year 2022, revenue rose 32% to $44.2 billion, and EPS increased 45% to $12.53 per share.

However, the markets have not responded kindly to these earnings. That’s because muted guidance for Q1 of next year, stemming from softness in demand as a result of lockdowns in China, has investors concerned about the company’s forward-looking growth rate. Growth stocks are skating on thin ice at the moment. Even the slightest hint of negative news around future growth, valuations are prone to compress significantly.

But for long-term bulls, this is the ideal time to strike. Qualcomm did well in a challenging year, and is more than just a chip company. The company holds a massive automotive design-win pipeline of $30 billion. Revenues for this segment grew from $975 million in 2021 to $1.37 billion in 2022. That’s not too shabby, considering where we are in the current cycle.

Even after factoring in the recent selloff, Qualcomm remains one of the most attractive opportunities in the tech sector.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.