Demand for technology stocks has increased over the past year or so, with technology-focused Nasdaq Composite To new heights. The rapid adoption of artificial intelligence (AI) is making that burden even greater.
Like many investors, billionaires are intrigued by the possibility of profiting from these next-generation algorithms and are investing in AI stocks like there's no tomorrow. A recent Motley Fool study sheds light on the most popular technology stocks held by billionaire hedge fund managers.
Few people will be surprised. Nvidia (NASDAQ:NVDA) It's near the top of the list. The company's graphics processing units (GPUs) help fuel his AI processing, driving his triple-digit sales and profit growth and making plenty of headlines last year.what are they maybe But what's surprising is that two AI technology stocks are owned by more hedge funds, and the other is neck-and-neck with Nvidia.
Take a look at the three tech stocks (not named NVIDIA) most widely held by billionaire hedge fund managers.
Billionaires' favorite tech stocks
Motley Fool researchers looked at 16 hedge funds run by billionaires to see what some of the wealthiest investors have in their portfolios. The data was obtained by reviewing each fund's Q4 2023 13F Form, a quarterly report filed by institutional investors with the Securities and Exchange Commission (SEC) at the end of each quarter. The report discloses portfolio holdings.
The study then compiled a list of technology stocks that were among the top 10 holdings of multiple hedge funds surveyed. And the results spoke for themselves.
Alphabet: Top 10 holdings of 11 hedge fund billionaires
alphabet (NASDAQ:Google) (NASDAQ:GOOG) Eleven hedge fund billionaires topped the list.
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Renaissance Technologies (Jim Simmons).
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Bridgewater Associates (Ray Dalio).
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BlueCrest Capital Management (Michael Platt).
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Millennium Management (Israel/England).
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Tiger Global Management (Chase Coleman).
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E. Shaw & Company (David Shaw).
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Two Sigma Investments (John Overdeck and David Siegel).
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Children's Investment Fund (Christopher Horne).
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Soros Fund Management (George Soros).
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Caxton Associates (Bruce Kovner).
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Viking Global Investors (Andreas Halvorsen).
The power of Google search gives the company access to the vast treasure trove of data it needs to properly train its generative AI models. The company's search business is also the foundation of its industry-leading digital advertising business, which captured about 30% of the market last year.
Bill Ackman, a fan and billionaire, elaborated on Pershing Square Capital's reasons for making a large investment in Alphabet. “We continue to believe that we are one of the companies that is expanding.” He went on to say that the stock's compelling valuation (while still attractive) currently trades at less than 27 times trailing 12-month earnings, making it one of the cheapest AI technology stocks. I mentioned that it is one of the brands.
Metaplatform: Top 10 Stock Holdings of 11 Hedge Fund Billionaires
meta platform (NASDAQ:Meta) (NASDAQ:GOOG) Eleven hedge fund billionaires also topped the list.
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Citadel (Ken Griffin).
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Renaissance Technologies (Jim Simmons).
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Bridgewater Associates (Ray Dalio).
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Millennium Management (Israel/England).
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Tiger Global Management (Chase Coleman).
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E. Shaw & Company (David Shaw).
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Tudor Investment Corporation (Paul Tudor Jones).
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Courtet Management (Philippe Laffond).
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Two Sigma Investments (John Overdeck and David Siegel).
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Caxton Associates (Bruce Kovner).
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Viking Global Investors (Andreas Halvorsen).
The company boasts the world's most widely used family of social media platforms. Approximately 3.2 billion people visit the site every day and 4 billion people stop by each month. This allows companies to obtain large amounts of data. Meta has surprised technology enthusiasts by developing its own Large-Scale Language Model Meta AI (LLaMA). LLaMA is now available for rental on all major cloud platforms, creating a whole new revenue stream.
AI performance aside, Bridgewater Associates' Ray Dalio recently talked about some of the most popular tech stocks on the market, saying he sees “Alphabet and Meta as a little undervalued.” Dalio has a point, which may help explain Meta's popularity among the billionaire crowd. Meta currently sells for about 25 times forward earnings, a discount compared to his current 27 times forward earnings. S&P500.
Microsoft: Top 10 holdings of 10 hedge fund billionaires
microsoft (NASDAQ: MSFT) It has partnered with Nvidia, a leader in the industry that is home to 10 hedge fund billionaires.
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Citadel (Ken Griffin).
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Bridgewater Associates (Ray Dalio).
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Millennium Management (Israel/England).
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Tiger Global Management (Chase Coleman).
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E. Shaw & Company (David Shaw).
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Tudor Investment Corporation (Paul Tudor Jones).
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Courtet Management (Philippe Laffond).
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Two Sigma Investments (John Overdeck and David Siegel).
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Children's Investment Fund (Christopher Horne).
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Caxton Associates (Bruce Kovner).
While Microsoft's software products and recurring revenue are undoubtedly attractive, the company has a big catalyst tied directly to AI. In other words, his Copilot, a generative AI-powered assistant, is a suite of helpers deeply integrated into the company's most popular products and services.
Copilot streamlines an ever-growing list of time-consuming tasks and helps users improve their productivity. In fact, the initial version was so successful that Microsoft has rolled out a number of his Copilots, job-specific, for sales, customer service, and finance industries, with the potential for similar success in these industries. there is.
It remains to be seen how much of an impact this program will have on Microsoft's revenue, but the numbers will likely be significant.Third Points billionaire Dan Loeb suggests CoPilot adoption “could increase” [Microsoft’s] Microsoft's generative AI efforts could generate $143 billion in additional revenue by 2027, says Evercore ISI analyst Kirk Mattern. It suggests that there is a sex.
At a forward price/earnings ratio of 35x, Microsoft stock isn't as cheap as the other two stocks in this trio, but consider the following: The company already has a clear path to profiting from AI, and it could be profitable.
Should you invest $1,000 in Nvidia right now?
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Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Danny Vena has held positions at Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Forget Nvidia: These are the three tech stocks billionaires can't stop buying.
