NEW YORK ( TheStreet ) — Hedge funds have made Apple (AAPL — Get Report ) their top stock holding, surpassing Priceline (PCLN ). and Google (GOOG ) remains the top holding among mutual funds.

Apple narrowly beat out Priceline and iPhone supplier Qualcomm (QCOM — Get Report ) for first place among hedge fund holdings, as of second-quarter data, according to a Monday analysis be Citigroup equity strategists. Google, meanwhile, retained its leading position among the 50-biggest actively managed mutual funds, the report said.

The iPhone and iPad maker’s popularity among hedge funds comes as managers such as David Einhorn of Greenlight Capital and Carl Icahn of Icahn Associates press for Apple to pay out its cash stockpile to shareholders by way of dividends and share repurchases.

In the second quarter, Apple returned a record $18.8 billion to shareholders by way of dividends and share repurchases. Apple said in April it would increase its quarterly dividend to $3.05 a share as part of a plan to return $100 billion in cash to investors by the end of 2015.

Einhorn, who lobbied for the company’s increasing return of cash to shareholders and its decision to finance such payouts, said in a second-quarter call with investors that he continues to retain an over $1 billion stake in Apple and thinks shares are undervalued, as TheStreet first reported. The hedge fund manager is also maintaining his position in Apple amid expectations of a possible global equity market correction in the second half of the year.

While Einhorn characterizes Apple’s $3.05 a share quarterly dividend and its record-sized buyback as a key support for the firm’s stock as the firm prepares to roll out new iPhone and iPad products, billionaire activist Carl Icahn recently said he thinks the company could return even more cash to investors.

Icahn said in a string of highly followed Tweets this August that he has taken a large position in Apple’s shares on an expectation that the firm will increase its stock buyback program. Such a move would prove shares are undervalued, according to Icahn, who says Apple shares are worth $600. Icahn also said on Twitter he would meet with CEO Tim Cook to discuss the company’s capital planning later this fall.

Overall, the information technology space proved to be the most broadly held sector among hedge funds, while mutual funds appeared to favor a growing position in health care, according to the Citigroup report.

IT names represented one-third of the top holdings positions for hedge funds, marginally ahead of Discretionary names, while Health Care and Energy lost ground, Citigroup said. In contrast, at mutual funds, managers moved away from IT and discretionary stocks and into the healthcare.

In the second quarter, hedge funds continued to underperform the S&P 500. however, the industry’s returns narrowed in on index gains. Hedge funds underperformed the index by 2.9% in the second quarter. Through the first two quarters of 2013, the S&P 500 has climbed 16.3%, while the HFRX Equity Hedge Index has only gained 6%.

Such performance could recover if Apple shares continue to rise from multi-year lows hit earlier in 2013.

— Written by Antoine Gara in New York