Top AI Stocks Billionaires Are Betting On

Investing in artificial intelligence (AI) has captured the attention of many, given its potential to transform businesses and everyday life. Over the past year, both large and small investors have eagerly purchased AI stocks, contributing to repeated record highs in the S&P 500.

If you’re contemplating entry into the AI stock market or expanding your current investments, it can be helpful to consider what billionaire investors are doing. These seasoned investors have a proven track record of picking valuable long-term investments.

However, it’s important to remember that aligning with every billionaire’s strategy may not suit your risk tolerance or investment timeline. Furthermore, opinions among billionaires can vary significantly.

Yet recently, a few billionaires have converged on three leading AI companies and invested heavily in them during the second quarter. Notable investors like Ray Dalio from Bridgewater Associates, Ken Griffin from Citadel, and Paul Tudor Jones from Tudor Investment have all significantly increased their stakes. Are these stocks worth considering for your portfolio? Let’s take a closer look.

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1. Nvidia

Nvidia (NASDAQ: NVDA) has become a leading figure in the AI landscape. Known as the world’s premier AI chipmaker, Nvidia’s strong performance has seen its earnings grow by triple digits consistently. As a result, the stock price has surged more than 200% over the past year.

Many billionaires seem confident in Nvidia’s future. For example, Dalio boosted his stake by 831% to 6,556,193 shares, while Griffin raised his holdings by 107% to 2,421,072 shares. Additionally, Tudor Jones increased his investment by 853% to 273,294 shares.

Given Nvidia’s market position and commitment to innovation, which includes annual updates to its chips, its growth potential appears promising. Analysts estimate the AI market could reach $1 trillion by 2030, and Nvidia’s upcoming Blackwell architecture launch by year-end could further enhance growth opportunities.

2. Amazon

While you might associate Amazon (NASDAQ: AMZN) primarily with e-commerce, its influence in the AI sector is growing. Amazon integrates AI to enhance its e-commerce efficiency and provides numerous AI-related services through its Amazon Web Services (AWS) unit.

AWS has made significant strides in the AI sphere, achieving an annualized revenue run rate exceeding $105 billion. As Amazon’s core profit engine, this is excellent for the company’s overall outlook.

Recent investments from billionaires reflect optimism about Amazon’s growth prospects. Dalio raised his stake by 153% to 2,645,567 shares; Griffin increased his holdings by 17% to 7,692,857 shares; and Tudor Jones expanded his position by 28% to 336,407 shares.

For those looking to invest in AI with a more balanced risk approach, Amazon may be an attractive option. The company’s robust e-commerce and cloud computing businesses were already generating substantial revenue before the rise of AI, laying a solid foundation while providing additional growth avenues through AI initiatives.

3. Super Micro Computer

Super Micro Computer (NASDAQ: SMCI) operates largely behind the scenes in the AI sector, manufacturing essential products like servers and workstations for AI data centers. The company collaborates closely with top chip manufacturers like Nvidia to rapidly integrate innovations into its products, which appeals to AI-focused clients.

Supermicro has reported impressive revenue growth over recent quarters, with new opportunities arising from its advancements in direct liquid cooling technology, addressing critical heat issues in AI data centers.

During the second quarter, Dalio opened a new position with 15,777 shares, Tudor Jones purchased 26,165 shares, and Griffin raised his stake by 96% to 201,733 shares. However, potential investors should proceed cautiously; the company has faced scrutiny recently, including a short report in August and a possible Justice Department investigation, which may create short-term uncertainties.

Consider Your Next Investment Wisely

If you’ve ever felt you missed the opportunity to invest in top-performing stocks, now may be a good time to reconsider.

On special occasions, our experts recommend “Double Down” on certain stocks that show significant promise. If you’re anxious because you think you’ve missed the boat, this might be your moment to invest before it’s too late. Here are some noteworthy returns:

• Amazon: Investing $1,000 in 2010 would have made you $21,285!
• Apple: A $1,000 investment in 2008 could be worth $44,456!
• Netflix: If you put in $1,000 in 2004, it would have grown to $411,959!

Currently, we have “Double Down” alerts for three outstanding companies that present a unique investment opportunity.

Check out the 3 “Double Down” stocks »

*Stock Advisor returns as of October 21, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.