If you're looking for investment ideas, a great place to get some inspiration is in the portfolios of billionaires. Generally, billionaire investors have proven their ability to pick winning stocks and turn those investments into millions and even billions of dollars in returns. So when we see several of these successful investors pile into a few stocks in particular it's time to give those stocks a second look -- and we just may find a great buying opportunity.
Today, billionaires from Ray Dalio of Bridgewater Associates to Israel Englander of Millennium and Chase Coleman of Tiger Global Management each include the following two stocks among their top technology holdings. These companies boast a strong track record of earnings growth and have what it takes to excel in the high-growth area of artificial intelligence (AI) -- and they're reasonably priced too, making them no-brainer buys today. In fact, they're the two top stocks owned by billionaires, according to Motley Fool research.
Let's take a closer look at these two stocks that billionaires love -- and that you should love too.
Image source: Getty Images.
Alphabet
Alphabet (GOOG 0.96%) (GOOGL 0.81%) is best known for a tool you may use every day: Google Search. It's even entered our vocabulary, with many of us saying we'll "Google it" if we need information about something. This has translated into more than 90% share of the search market worldwide and an unstoppable revenue machine -- Alphabet makes the lion's share of its revenue through advertising on the Google Search platform.
Today and into the future, Alphabet's investments in AI should help it strengthen that revenue stream even further. That's because the company's AI models are making search faster and better, and that should keep users loyal and advertisers coming back to reach this target audience. In the most recent earnings report, Alphabet said users applying the new AI features were using search more and reporting higher satisfaction.
Alphabet also is using AI to help advertisers set up their ads, directly improving their experience -- another incentive for them to stick with the company.
But Alphabet isn't only about search. The company also sells hardware and has a growing cloud business called Google Cloud. And cloud is another area where Alphabet may stand out thanks to its AI investments. In the past eight months alone, Google Cloud launched about 1,000 new products and features. And the company is seeing solid growth in its AI offerings. For example, today one million developers are using Alphabet's generative AI tools.
All of this and valuation of only 22 times forward earnings estimates make Alphabet an inexpensive billionaire favorite to buy now -- and hold onto for its AI and general growth potential.
Meta Platforms
Meta Platforms (META 0.35%) offers us a great opportunity right now -- a chance to buy it on the dip, for only 23 times forward earnings estimates. Why did the stock slip recently? Some investors soured on Meta when chief executive officer Mark Zuckerberg emphasized it will take time for the company to monetize its investment in AI.
But this shouldn't be seen as a warning sign. Zuckerberg is being honest about the company's AI path, sharing positive news along with certain realities -- like the fact that such a huge investment doesn't bear fruit overnight. That's something to be appreciated and boosts my confidence in the company as it continues on the AI growth path.
Meta's goal is to roll out AI across its products and services -- and in many instances this involves having an AI tool to help users get things done. The company already has launched Meta AI in some geographies across its apps -- users aren't all fans so far, but it's important to remember that we're still in the early stages of AI so a lot could change over the coming years.
Meanwhile, Meta still is the world's social media leader, owning Facebook, Messenger, Instagram, and WhatsApp. With more than 3.2 billion people using at least one of these daily, it's no surprise advertisers flock to advertise on Meta's apps. And considering the company's solid moat -- this isn't likely to change.
Meta's strong earnings track record also helped it announce its first-ever dividend this year, so the tech player is showing investors it can invest in growth and reward shareholders at the same time. And that makes this stock a no-brainer buy right now at a bargain price.
