Bill Ackman and David Tepper aren't exactly two peas in a pod. They have quite different investing styles. However, the two men nonetheless share several things in common.

Both started hedge funds -- Ackman with Pershing Square Capital Management and Tepper with Appaloosa Management. Both are multibillionaires. Ackman is currently worth around $4.2 billion, while Tepper's net worth stands close to $20.6 billion.

There's also one other common denominator between these two super-wealthy men. Here's the only artificial intelligence (AI) stock that Ackman and Tepper both own.

Great minds think alike

I won't try to keep you in suspense. The one AI stock that's in Ackman's and Tepper's portfolios is Google parent Alphabet (GOOG 9.96%) (GOOGL 10.22%).

Ackman's Pershing Square holds positions in only eight stocks representing seven companies. The difference in the numbers is due to the hedge fund owning Alphabet's class A and class C shares, which trade under different tickers. Alphabet is the only AI company in Ackman's portfolio.

Name a top AI stock and there's a pretty good chance that Tepper's Appaloosa Management hedge fund owns it. Alphabet ranks as Tepper's fifth-largest position. There are four other AI stocks ahead of it.

As you might expect considering the small number of stocks in Pershing Square's portfolio, Ackman is more heavily invested in Alphabet than Tepper is. Pershing Square owns more than 13.7 million of the tech giant's class A and class C shares combined. Appaloosa owns 2.75 million of Alphabet's class C shares.

What do Ackman and Tepper like about Alphabet?

Ackman hasn't been shy about expressing his views on Alphabet. He stated at the CNBC Delivering Alpha conference last year that he initially invested in the stock because of its attractive valuation.

In early 2023, Alphabet seemed to be well behind OpenAI in developing generative AI applications. The company soon launched its Google Bard app (recently renamed Gemini) but "really fumbled" it in Ackman's words. That led to a sell-off of Alphabet stock. Ackman swooped in.

The billionaire investor also liked Alphabet's AI credentials. He told CNBC's Scott Wapner that the company had "enormous amounts of access to data" -- a key advantage in training AI systems. Ackman noted that Alphabet was designing its own AI chips and had access to massive processing power with Google Cloud. He wrapped up his comments on the company by stating that it "will be a dominant player in AI for the very, very long term."

Tepper hasn't said as much publicly about Alphabet as Ackman has. However, his purchases speak for themselves. His hedge fund bought shares of the AI leader in each of the first three quarters of 2023. Appaloosa hasn't submitted its 13F-HR filing for Q4 yet, but it wouldn't be surprising if its stake in Alphabet is now even higher.

Is Alphabet a smart pick for other investors?

It's not wise to buy any stock just because billionaire hedge fund managers own it. However, I think that Alphabet is a smart pick for retail investors.

The company's advertising business continues to perform quite well despite coming in a little under Wall Street expectations in Q4. I won't complain about $65.5 billion in a single quarter. Google Search's incorporation of Search Generative Experience (SGE) is also showing that users don't mind ads along with generative AI.

Google Cloud remains the biggest growth driver for Alphabet. I think this unit still has tremendous growth prospects ahead as customers move their apps and data to the cloud.

The recent launch of the Gemini Ultra 1.0 AI model is especially encouraging. This AI model beats OpenAI's GPT-4 on many key metrics. Alphabet has also rolled out a subscription model for Gemini Advanced, which is built on Ultra 1.0, that holds the potential to boost revenue going forward.

Perhaps the biggest downside to buying Alphabet stock right now is its valuation. Shares trade at close to 21.6 times expected earnings. That's admittedly high, but I think the company's growth prospects justify a premium price.