Since ChatGPT's launch, artificial intelligence (AI) stocks have been taking the stock market by storm, and it's no surprise that billionaire hedge fund managers and other investors are reaping the benefits of this groundbreaking technology.
Some of them have made millions by betting on stocks such as: NVIDIAhave soared since the early days of the AI boom. But what are they buying now? With the help of recent 13-F filings, we take a look at some of the AI stocks billionaires are coveting.
1. Microsoft
Microsoft (Nasdaq: MSFT) Since its launch, ChatGPT has become a popular choice among AI investors because Microsoft is a close partner of ChatGPT's developer, OpenAI, and has invested an estimated $13 billion in the startup. Microsoft has built OpenAI technology into a wide range of its products, including Github, its office suite, Bing, and Azure, and is benefiting from the growing adoption of Azure OpenAI.
Microsoft's stock price continued to rise throughout the first quarter, and the company posted strong revenue and profit results thanks in part to its AI efforts.
Many top investors are taking notice. Among those buying Microsoft shares in the first quarter was Stanley Druckenmiller, a longtime manager at Duquesne Capital Management. His Duquesne Family Office fund added 26,150 shares of Microsoft in the first quarter, making it the company's largest holding.
Microsoft has also caught the eye of Steven Cohen of Point72 Asset Management, whose fund added 566,749 shares of Microsoft in the first quarter, nearly doubling its holdings in the tech giant.
Finally, Ray Dalio's Bridgewater Associates also increased its stake in Microsoft during the first quarter, adding 381,793 shares during the quarter, bringing its holdings to about 580,000. While Bridgewater's holdings of Microsoft are still relatively small for the world's largest hedge fund, Dalio seems to like the stock.
2. Alphabet
alphabet (Nasdaq: GOOG) (Nasdaq: GOOGL) Soon after its launch, ChatGPT has emerged as Microsoft’s biggest rival in the AI space, challenging the company.
Alphabet released its own AI chatbot, Bard, shortly after ChatGPT's launch, and while the company's AI strategy hasn't always been well-received, the search leader has since repeated this, replacing Bard with Gemini, and also recently started adding AI-based answers to some search queries on Google.
Alphabet was also an early investor in AI, acquiring DeepMind about 10 years ago. Alphabet had been reluctant to release new AI products, but the release of ChatGPT forced them to make the decision, a strong move given their dominance in search.
It's no surprise that hedge fund investors are still buying shares of Google's parent company, which has also seen its stock soar over the past year or so. With the stock just hitting an all-time high, buying in the first quarter seems well timed.
Among the investors who bought Alphabet shares in the first quarter was Chris Horn's TCI Fund Management, which bought 1.05 million Alphabet shares. Horn wrote a letter to Alphabet in 2022 urging the company to streamline its cost structure, and many of his wishes have been realized, including a series of job cuts in early 2023. Horn appears to like Alphabet's moves, given his active purchases of Alphabet shares.
Another buyer of Alphabet in the first quarter was Paul Tudor Jones' Tudor Investments, which bought an additional 229,696 shares of Alphabet during the quarter. Alphabet is still a relatively small holding for Tudor, and Tudor Jones is known for prioritizing capital preservation.
Finally, Jeremy Grantham's Grantham, Mayo, Van Otterloo & Co. added 1.75 million shares of Alphabet in the first quarter, making it the second-largest holding after Microsoft, and its holdings are now worth more than $1 billion.
Given their massive size and leading positions in the tech sector, Microsoft and Alphabet are likely to continue attracting money from the world's top investors and maintain their status as top AI stocks.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet and Microsoft. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Artificial Intelligence (AI) Stocks Billionaires Are Buying Up was originally published by The Motley Fool.
