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Wall Street is piling into tech stocks

Bank of America Merrill Lynch's survey of fund managers for May showed that "long Nasdaq" was believed to be the most crowded trade.

Facebook Inc. CEO Mark Zuckerberg seen moments after Facebook went public in 2012.

The most popular bet on Wall Street is no longer considered to be on the US dollar's rise.

Bank of America Merrill Lynch's survey of fund managers for May showed that "long Nasdaq" was believed to be the most crowded trade.

That ends a five-month streak of the view that "long dollar" was the most crowded trade. At the same time, money managers thought the dollar was at its most overvalued in a decade.

Managers' view of the Nasdaq, an index populated mostly with tech stocks, serves as a note to contrarians, Bank of America said in a note on Tuesday. And bets on the dollar's rise haven't played out just yet; on Tuesday, the US dollar index fell to a six-month low amid reports that President Donald Trump shared classified intelligence with Russian officials last week.

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On Monday, the Nasdaq, which is up 14% year-to-date, extended its gains for the year to record highs as a strong earnings season wrapped up. According to a FactSet report on Friday, the tech and financials sectors of the S&P 500 tied with the highest percentages of companies reporting earnings above analysts' estimates.

Tech stocks have also been supported by the expectation for changes to the US tax code that could allow companies to return cash held overseas to the US at a lower rate. Tech companies have outsize overseas cash holdings relative to other industries.

The survey further showed that the share of investors who considered stocks to be overvalued increased to 37%, the highest since January 2000.

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