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A number of technology-focused hedge funds are generating strong returns so far this year, with technology being the biggest standout of Wall Street this 2017 and generating at nearly 50 percent of the market’s overall rise.

Hedge funds tracked by Morgan Stanley showed that as of end of April, nearly 29 percent of the sector’s exposure in North America was in information technology stocks. This leads to concern that the hedge fund space is already crowding the technology sector.

“I believe that hedge funds are already crowding the tech sector,” Vincent Au, portfolio manager at Gondor Capital Management said. He added, “I believe so especially the Google, Apple, Netflix, and Amazon. The holdings of the hedge funds paint that picture.”

Au’s observation is supported by a recent survey conducted by Bank of America Merill Lynch showing that the strong performance of hedge funds in months is driven by the crowded trade in technology. UBS also released a client note indicating that positions in Tencent, Alphabet, Alibaba, and Facebook have largely contributed to the strong gains of many hedge funds.

Even hedge funds who are not TMT-focused have poured their capital to work in tech stocks and adding Chinese internet stocks such as Alibaba, Tencent, Baidu and Netease to their long portfolios.

But while hedge funds are still bullish on technology, mutual funds have been reducing their positioning in the sector. Indeed, hedge funds maintain that the rally will continue and have raised their net positioning in Info Tech by 82 basis points in the second week of June, ending the quarter 352 basis points overweight relative to the Russell 3000 (25% vs. 21%).

Au continued, “I believe tech stocks as a group are fairly valued and a few individual names are overvalued. As a value investor, it is difficult for me to describe this sector as cheap or inexpensive.”

Although he disagrees with mutual funds’ position that the tech stock rally has ended. “I don’t think it’s fair to lump all tech stocks together as some are in different sectors within technology.”

Au said he is looking at opportunities in software, semiconductors, and storage. Currently, Gondor Capital has exposures in some of the so-called FANG stocks. Gondor has positions in Applied Optoelectronics (AAOI), Apple Inc. (AAPL), Advanced Micro Devices (AMD), Analog Devices, Inc. (ADI), Electronic Arts (EA), Nvidia (NVDA), NXP Semiconductors (NXPI), Texas Instruments Inc. (TXN), and Western Digital Corporation (WDC).

FANG stocks refer to the four major players in the internet space, including Facebook, Amazon, Netflix, and Google.

However, Au said that crowded or not, the bullish view held by hedge funds on technology may be the correct one.

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