Artificial intelligence (AI) stocks have taken the stock market by storm since the launch of ChatGPT. And it shouldn't come as a surprise that billionaire hedge fund managers and other investors are among the beneficiaries from the breakthrough technology.
A number of them have made millions betting on stocks like Nvidia, which have soared since the early days of the AI boom. But what are they buying now? With the recent round of 13-F filings in the book, let's take a look at a few of the AI stocks that billionaires are getting greedy with.
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1. Microsoft
Microsoft (MSFT 0.22%) has been a popular choice among AI investors since ChatGPT came on the scene. That's because Microsoft is a close partner of OpenAI, the ChatGPT creator, having invested an estimated $13 billion into the start-up. And Microsoft is reaping the benefits, having included OpenAI's technology in a wide range of its products, including Github, its office suite, Bing, and Azure, which has seen significant adoption of Azure OpenAI.
Microsoft stock continued to gain through the first quarter, and is delivering strong results on the top and bottom lines, in part from its AI initiatives.
A number of top investors have taken notice. Among those who bought Microsoft in the first quarter was Stanley Druckenmiller, the longtime manager of Duquesne Capital Management. His Duquesne Family Office fund added 26,150 shares of Microsoft in the quarter, representing its biggest stock holding.
Microsoft also caught the eye of Steven Cohen of Point72 Asset Management, whose fund added 566,749 shares of Microsoft in the first quarter, roughly doubling its stake in the tech giant.
Finally, Ray Dalio's Bridgewater Associates also loaded up on Microsoft stock in the first quarter, adding 381,793 shares of Microsoft in the quarter, upping his stake to nearly 580,000 shares. Microsoft is still a relatively small holding for Bridgewater, the world's biggest hedge fund, but Dalio seems to like what he sees in the stock.
2. Alphabet
Alphabet (GOOG 0.92%) (GOOGL 0.93%) has emerged as Microsoft's top rival in AI, challenging Microsoft since shortly after the launch of ChatGPT.
Alphabet released its own AI chatbot, Bard, shortly after the launch of ChatGPT, and while its AI strategy hasn't always been well received, the search leader has iterated on it, replacing Bard with Gemini. And it recently began including some AI-based answers to some search queries on Google.
Alphabet was also early to invest in AI, acquiring DeepMind nearly 10 years ago. And though Alphabet was hesitant to release new AI products, the launch of ChatGPT has forced its hand -- and it's a strong one, given its dominance of search.
The Google parent's stock has also surged over the last year or so, and, not surprisingly, hedge fund investors are still buying it. First-quarter purchases seem well timed, as the stock just touched an all-time high.
Among the investors buying Alphabet stock in the first quarter are Chris Hohn's TCI Fund Management, which bought 1.05 million shares of Alphabet. Hohn wrote Alphabet a letter in 2022 urging the company to slim down its cost structure, and many of his wishes have come true, including a round of layoffs in early 2023. Hohn seems to like what he sees from Alphabet, given his aggressive purchasing of the stock.
Another buyer of Alphabet in the first quarter was Paul Tudor Jones's Tudor Investments, which added 229,696 shares of Alphabet in the first quarter. Alphabet is still a relatively small holding of Tudor's, and Tudor Jones is known for prioritizing preservation of capital.
Finally, Jeremy Grantham's Grantham, Mayo, Van Otterloo & Company added 1.75 million shares of Alphabet in the first quarter, making it its second-largest holding after Microsoft, and its Alphabet stake is now worth more than $1 billion.
Given their massive sizes and leading positions in the tech sector, Microsoft and Alphabet are likely to continue to win dollars from the world's top investors and remain among the top AI stocks.
