What happened

Shares of Block (SQ -2.84%) traded about 3.5% higher as of 11 a.m. ET today after several investment funds in new regulatory filings disclosed that they had raised their overall stake in the digital payments and financial services company.

So what

Coatue Management, a fund focused largely on the tech, media, and telecommunications sectors, disclosed in its recent 13F filing (which shows what stocks a fund bought and sold in any given quarter) that the company more than doubled its stake in Block in the first quarter of this year.

Coatue upped its stake in the company from 2.72 million shares to 5.9 million at the end of the first quarter.

Arrow moving up and right over bar graph with people on top.

Image source: Getty Images.

The hedge fund Lone Pine Capital also significantly increased its stake in Block from 280,000 shares to nearly 3 million shares at the end of the first quarter. Another big hedge fund, Tiger Global, increased its stake in the company from 1.4 million shares to 2.74 million.

Investors were clearly buying the dip on Block earlier this year; the stock is down more than 47% in 2022.

Now what 

Tech and fintech stocks have been sold off heavily this year, as investors are worried about the economy and the future health of the consumer. The market has been less willing to buy into high-growth valuations.

However, only a few weeks ago, Block reported earnings results for the first quarter of the year that, while missing analyst estimates slightly, showed good momentum in business divisions such as the Cash App.

Block's stock has now fallen close to pre-pandemic levels. Given the acceleration of digital trends and payments, I think the business is definitely more valuable now than it was then.