Money managers are piling into tech stocks

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' is now believed to be the most crowded trade.

This 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 the most overvalued in a decade.

Managers' view of the Nasdaq, an index mostly populated 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 news that President Donald Trump shared intelligence with Russia's foreign minister.

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 tax reform, which could allow companies to return cash held overseas to the US at a lower rate. Tech companies have outsized 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 2,000.