Artificial intelligence (AI) stocks have taken the stock market by storm since the launch of ChatGPT. And it should come as no surprise that billionaire hedge fund managers and other investors are among the beneficiaries of the breakthrough technology.
Some of them have made millions betting on stocks like Nvidia, which have skyrocketed 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 some of the AI stocks that billionaires are getting greedy with.
1.Microsoft
Microsoft (NASDAQ: MSFT) has been a popular choice among AI investors since ChatGPT came onto the scene. That’s because Microsoft is a close partner of OpenAI, the maker of ChatGPT, which has invested an estimated $13 billion in the startup. And Microsoft is reaping the rewards, having incorporated OpenAI’s technology into a wide range of its products, including Github, its office suite, Bing, and Azure, which has seen significant adoption of Azure OpenAI.
Shares of Microsoft continued to rise in the first quarter, delivering strong results both above and below the line, thanks in part to its AI initiatives.
A number of top investors have taken notice. Among those who bought Microsoft in the first quarter was Stanley Druckenmiller, a longtime manager of Duquesne Capital Management. His Duquesne Family Office fund added 26,150 shares of Microsoft this quarter, representing its largest shareholding.
Microsoft also caught the attention of Steven Cohen of Point72 Asset Management, whose fund added 566,749 shares of Microsoft in the first quarter, roughly doubling his stake in the tech giant.
Finally, Ray Dalio’s Bridgewater Associates also repurchased Microsoft stock in the first quarter, adding 381,793 shares of Microsoft in the quarter, increasing its stake to nearly 580,000 shares. Microsoft is still a relatively small holding for Bridgewater, the world’s largest hedge fund, but Dalio seems to like what he sees in the stock.
2. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has become Microsoft’s biggest rival in AI and has been challenging Microsoft since shortly after the launch of ChatGPT.
Alphabet released its own AI chatbot, Bard, shortly after ChatGPT’s launch, and while its AI strategy wasn’t always well received, the search leader has iterated on this and replaced Bard with Gemini. And recently it started adding some AI-based answers to some searches on Google.
Alphabet was also early to invest in AI, acquiring DeepMind almost a decade ago. And while Alphabet has been hesitant to release new AI products, the launch of ChatGPT has forced it to do so – and it’s a strong choice, given its search dominance.
Shares of the Google parent company have also soared over the past year, and it’s no surprise that hedge fund investors are still buying these stocks. The first-quarter purchases seem well timed, as the stock just hit an all-time high.
Among the investors who bought Alphabet shares in the first quarter is 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 the stock.
Another buyer of Alphabet in the first quarter was Paul Tudor Jones’ Tudor Investments, which added 229,696 shares of Alphabet in the first quarter. Alphabet is still a relatively small Tudor holding, and Tudor Jones is known for prioritizing capital preservation.
Finally, Jeremy Grantham’s Grantham, Mayo, Van Otterloo & Company added 1.75 million shares of Alphabet in the first quarter, making it the second-largest holding company after Microsoft, and its stake in Alphabet is now over $1 billion worth.
Given their massive size and leading positions in the technology sector, Microsoft and Alphabet will likely continue to win dollars from the world’s best investors and remain among the top AI stocks.
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Suzanne Frey, a director 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 holds positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
2 Artificial Intelligence (AI) Stocks Billionaires Are Buying by Hand was originally published by The Motley Fool
