AI Stocks: Billionaires' Favorites and Top Contenders in the Tech Race

Microsoft Vs. Apple Vs. Google: Which AI Stock Is A Buy Ahead Of Earnings?

Earnings season is nearly here, and investors are eager to learn how the big tech stocks are monetizing their artificial intelligence investments. Three prominent players with major AI initiatives are Microsoft (MSFT), Apple (AAPL) and Alphabet (GOOGL). Should one of these AI stocks get into your portfolio ahead of the next earnings release? Read on to find out. In earlier years of artificial intelligence development, academia took the lead in developing machine learning models. That trend has shifted, according to the AI Index Report from Stanford University. In 2023, industry -- including companies like Microsoft, Apple, and Alphabet -- produced 51 notable machine learning models. Academic institutions created only 15. With AI producing measurable results in multiple business areas, adoption and demand of AI tools are poised to rise globally. That is a high-level justification to spend money developing more versatile, accurate and creative AI applications. Because the costs of AI development are high, deep-pocketed AI players have an advantage in the AI race. Microsoft, Apple and Alphabet are among the largest public companies in the U.S. Each has the resources and global brand recognition to develop and monetize AI solutions to customers around the world. The table below shows the market capitalization, dividend yield and trailing 12-month (TTM) EPS for Microsoft versus Apple stock and Google stock, officially known as Alphabet. If you are interested in dividend yields, you wouldn't describe any of these as the best 2024 stocks. Investors don't buy MSFT stock, Apple stock or Google stock for the cash income -- the motivation is capital appreciation with some downside protection related to the size of these companies. Size creates access to capital and access to capital is an important life raft during hard times. Microsoft develops software for personal and business computing, maintains a platform for enterprise application development and sells the Xbox gaming console and related content. Microsoft also owns and runs the business networking website LinkedIn. Microsoft is building AI resources for its consumer and business customers. Products to watch include Copilot and Microsoft Cloud. In its third quarter fiscal year 2024 earnings release, Microsoft reported 17% revenue growth, 20% net income growth and 20% diluted EPS growth. Cloud computing services were big drivers of the topline growth. Cloud grew 23%, while Azure and other cloud services grew 31%. MSFT stock is up 24% this year, after gaining 57% in 2023. Apple designs, makes and sells smartphones, tablets, smartwatches, laptops and personal computers. The company also runs the App Store, which distributes applications for its devices, sells cloud storage and operates the cashless payment service Apple Pay. Apple's AI strategy centers on building powerful AI features into its devices. These features are collectively branded as Apple Intelligence. Apple Intelligence can write, create images, organize the email inbox, use applications and learn to simplify tasks based on user behavior. Apple has said this AI offering will safeguard user data better than other tools available. Apple Intelligence will debut in 2024, but only newer devices will support it. The AI tools will initially be free, with monetization coming indirectly via device sales. Apple Insider reports that Apple Intelligence may at some point adopt a subscription model for advanced features. For the fiscal second quarter ended on May 2, 2024, Apple reported record Services revenue and an all-time high for active installed devices across all products and geographies. Sales fell 4.3% and net income dipped 2% versus the prior-year quarter. Diluted EPS increased by $0.01. AAPL stock is up 21% in 2024, with growth following the May announcement of Apple Intelligence. Apple bounced back from a tough 2022 with 43% growth in 2023. Alphabet, formerly known as Google, runs Google Search, sells online advertising, maintains the Google Cloud computing platform, offers online storage and productivity software and manages the Google Play store. Alphabet also designs and sells Google Pixel smartphones. Alphabet's AI roadmap puts the company in competition with OpenAI's ChatGPT and chip designers Nvidia (NVDA) and Advanced Micro Devices (AMD). Key initiatives: For the first quarter of 2024, Alphabet reported 16% sales growth in constant currency, 57% net income growth and 61% growth in diluted EPS. CEO Sundar Pichai cited strong performance from Search, Youtube and Cloud. After a decline in the first two months of the year, Alphabet stock rebounded to 37% year-to-date growth. GOOGL was also up 58% in 2023. The table below includes high-level income statement, balance sheet, cash flow and valuation metrics for Microsoft, Apple and Alphabet. Over the last 12 months, Microsoft generated the lowest revenue but outperformed Alphabet on net income. All three companies produced operating cash flow in the range of $107 billion to $111 billion. Alphabet has strong balance sheet characteristics, with lower debt and higher cash than the two competitors. Alphabet also has the lowest PE ratio of the three, while Microsoft has the highest. Microsoft, Apple and Google are each approaching AI from slightly different angles: At some point, all three companies will likely compete head-to-head with subscription-based AI assistants or chatbots. According to Grand View Research, the conversational AI market was valued at $7.6 billion in 2022. The compound annual growth (CAGR) expectation is 23.6% between 2023 and 2030. That equates to annual revenues of $41.39 billion by 2030. Apple is well positioned to lead in that segment, thanks to the brand loyalty of its customers and huge installed base of devices. Apple's efforts to protect user data while it personalizes AI experiences is also a differentiator. Microsoft is likely to shine in the business market, assuming Copilot evolves into a necessary efficiency tool for Microsoft Office users. The value of Google's strategy is still unclear. The company looks to be forcing itself into the AI space rather than innovating new, truly helpful solutions. The inclusion of AI overviews into Google Search, for example, puts Search in direct competition with ChatGPT and every other AI assistant. But unless users want Search to function like ChatGPT, this is a risky move that could damage the brand reputation for both Search and Gemini. A quick search of "how to turn off AI overviews in Google" returns multiple articles explaining how to block this feature -- indicating many users don't appreciate the change. AI is wildly popular among investors right now, but there are risks ahead. Three to note are the uncertain regulatory future, fast-changing customer expectations and the amount of funding required to develop AI models. Despite the risks, researchers see the overall AI market growing substantially over the next six years. Grand View Research expects a CAGR of 25.6%, driving annual revenues to $219 billion in 2030, from $55.82 billion in 2024. That growth will require significant upfront investment. Goldman Sachs predicts annual AI investments will stretch up to $200 billion by 2025, with measurable productivity gains to follow as AI adoption rises. If the stock market were rational, those numbers would set the stage for a waiting game. But investors are naturally predictive, pricing in value long before it hits the bottom line. This proactive approach lends itself to volatility, as investors can be easily swayed when the future is uncertain. Here's the takeaway. Investing in AI now has strong upside in the long run, but the road ahead will be rocky. In the AI race, MSFT stock is a safer choice than AAPL stock or GOOGL stock in the near term and long term. Microsoft has a natural distribution system with access to consumers and business customers via its software products and Microsoft Cloud. Apple has potential to dominate, but this is harder to predict until Apple Intelligence gets into customers' hands. Google's strategy is the least certain. Without unique innovations, there are risks to competing directly with AI power hitters and reshaping Search, which has historically been the company's cash cow. In the short-term, only Microsoft is likely to report an earnings boost that's directly related to AI. It will come from the company's Cloud services. Alphabet's cloud business is also growing, but from a much smaller base versus Microsoft. My bet is on MSFT, which is why it's the only stock of the three that I own directly.

Missed Out on Nvidia? Billionaires Are Buying These 3 Artificial Intelligence (AI) Stocks Hand Over Fist

The surge in artificial intelligence (AI) stocks has not escaped the attention of billionaires. As opportunities emerge, investing disclosure requirements show they have deployed significant amounts of capital into AI stocks like Nvidia. This is important because some investors follow the lead of these top-tier investors and mimic their transactions hoping for similar results. While these billionaires buy stocks for many reasons that have little to do with the investing goals of their followers, fortunately, their positions do occasionally benefit average investors, especially if they happen to pick some solid stocks to get behind. At first glance, investors may find it puzzling that Appaloosa Management, the fund run by billionaire David Tepper, took a position in Alibaba. In 2022, the stock faced a delisting threat when the Chinese company resisted allowing the Securities and Exchange Commission (SEC) to see its internal financial audits because of its association with the Chinese Communist Party. Although the U.S. and China eventually resolved that issue, the tenuous relationship between the countries put tremendous pressure on the stock. As a result of the turmoil, Alibaba's stock price fell to almost 20% less than its initial public offering (IPO) price from 10 years ago. This drop comes despite Alibaba's net income more than tripling over that time. That caused its P/E ratio to fall briefly into the single digits, and its current earnings multiple of 18 is far below any comparable conglomerate. With the stock trading at a heavily discounted price, Tepper increased the size of his Alibaba position by more than 11,000% over the last year. The markets may vindicate this move over time. The stock price has remained steady so far this year, though it is down about 75% from its 2020 high. Still, if Alibaba can find a way to ease investor concerns, Tepper's fund and those who invest along with him could experience a significant payday as the stock finally prices in its growing profits. 2. Alphabet Alphabet has been a top AI innovator since it introduced the technology to its Google Search platform in 2001. Nonetheless, AI investors soured on the stock when OpenAI introduced a vastly improved version of ChatGPT in early 2023, creating the impression that the Google parent was behind the curve. Billionaire investors like Bill Ackman saw this as a buying opportunity, so much so that 13% of his Pershing Square portfolio is tied up in this stock. As late as the fourth quarter of 2022, Pershing Square did not own any Alphabet stock. Buying at the time Pershing Square did may have been the right move. More recently, Alphabet has responded with its own generative AI product, Google Gemini. It has also combined its AI research under the Google DeepMind umbrella. Considering its $108 billion in liquidity, it will likely buy any AI innovation it cannot invent in-house. Additionally, despite perceptions, the stock has risen by around 60% over the last year, and its 29 P/E ratio makes it the most inexpensive company with a market cap above $2 trillion. That positions Alphabet to offer both safety and a higher likelihood of further gains. 3. Microsoft The opportunity in Microsoft was of particular interest to Stanley Druckenmiller, the manager of the Duquesne Family Office fund. He saw that Microsoft's CEO, Satya Nadella, had returned the tech giant to prominence as a leader in cloud computing. Succeeding in the cloud today means leading in AI. Druckenmiller began buying shares at the low point of the 2022 bear market and increased the purchases as Microsoft's partnership with generative AI specialist OpenAI came to light. Now, it makes up around 11% of the Duquesne fund. The company built on that deal, integrating search engine Bing with ChatGPT to better enable it to compete with Google Search. Additionally, it launched Copilot, an AI-powered chatbot that combines the ChatGPT large language model and Microsoft's tools to create deliverables on command through one's natural language. Amid its innovations, it holds around $80 billion in liquidity, giving it tremendous optionality. Indeed, optimism around AI has helped Microsoft stock rise by nearly 40% over the last year. At a P/E ratio of about 39, Microsoft has become a moderately valued AI stock, but given its resources and leadership in AI, the stock should continue to rise over time. Should you invest $1,000 in Alibaba Group right now? Before you buy stock in Alibaba Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Alibaba Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Missed Out on Nvidia? Billionaires Are Buying These 3 Artificial Intelligence (AI) Stocks Hand Over Fist | The Motley Fool

Billionaires know the opportunity in AI goes well beyond Nvidia. The surge in artificial intelligence (AI) stocks has not escaped the attention of billionaires. As opportunities emerge, investing disclosure requirements show they have deployed significant amounts of capital into AI stocks like Nvidia. This is important because some investors follow the lead of these top-tier investors and mimic their transactions hoping for similar results. While these billionaires buy stocks for many reasons that have little to do with the investing goals of their followers, fortunately, their positions do occasionally benefit average investors, especially if they happen to pick some solid stocks to get behind. Let's take a look at three billionaires and explore why they took positions in Alibaba (BABA 1.44%), Alphabet (GOOGL -0.27%) (GOOG -0.28%), and Microsoft (MSFT -0.25%). The exercise might lead to some insight that can be useful to your investing journey. At first glance, investors may find it puzzling that Appaloosa Management, the fund run by billionaire David Tepper, took a position in Alibaba. In 2022, the stock faced a delisting threat when the Chinese company resisted allowing the Securities and Exchange Commission (SEC) to see its internal financial audits because of its association with the Chinese Communist Party. Although the U.S. and China eventually resolved that issue, the tenuous relationship between the countries put tremendous pressure on the stock. As a result of the turmoil, Alibaba's stock price fell to almost 20% less than its initial public offering (IPO) price from 10 years ago. This drop comes despite Alibaba's net income more than tripling over that time. That caused its P/E ratio to fall briefly into the single digits, and its current earnings multiple of 18 is far below any comparable conglomerate. With the stock trading at a heavily discounted price, Tepper increased the size of his Alibaba position by more than 11,000% over the last year. The markets may vindicate this move over time. The stock price has remained steady so far this year, though it is down about 75% from its 2020 high. Still, if Alibaba can find a way to ease investor concerns, Tepper's fund and those who invest along with him could experience a significant payday as the stock finally prices in its growing profits. Alphabet has been a top AI innovator since it introduced the technology to its Google Search platform in 2001. Nonetheless, AI investors soured on the stock when OpenAI introduced a vastly improved version of ChatGPT in early 2023, creating the impression that the Google parent was behind the curve. Billionaire investors like Bill Ackman saw this as a buying opportunity, so much so that 13% of his Pershing Square portfolio is tied up in this stock. As late as the fourth quarter of 2022, Pershing Square did not own any Alphabet stock. Buying at the time Pershing Square did may have been the right move. More recently, Alphabet has responded with its own generative AI product, Google Gemini. It has also combined its AI research under the Google DeepMind umbrella. Considering its $108 billion in liquidity, it will likely buy any AI innovation it cannot invent in-house. Additionally, despite perceptions, the stock has risen by around 60% over the last year, and its 29 P/E ratio makes it the most inexpensive company with a market cap above $2 trillion. That positions Alphabet to offer both safety and a higher likelihood of further gains. The opportunity in Microsoft was of particular interest to Stanley Druckenmiller, the manager of the Duquesne Family Office fund. He saw that Microsoft's CEO, Satya Nadella, had returned the tech giant to prominence as a leader in cloud computing. Succeeding in the cloud today means leading in AI. Druckenmiller began buying shares at the low point of the 2022 bear market and increased the purchases as Microsoft's partnership with generative AI specialist OpenAI came to light. Now, it makes up around 11% of the Duquesne fund. The company built on that deal, integrating search engine Bing with ChatGPT to better enable it to compete with Google Search. Additionally, it launched Copilot, an AI-powered chatbot that combines the ChatGPT large language model and Microsoft's tools to create deliverables on command through one's natural language. Amid its innovations, it holds around $80 billion in liquidity, giving it tremendous optionality. Indeed, optimism around AI has helped Microsoft stock rise by nearly 40% over the last year. At a P/E ratio of about 39, Microsoft has become a moderately valued AI stock, but given its resources and leadership in AI, the stock should continue to rise over time.

AI Stocks: 9 Biggest Companies in 2024

Artificial intelligence (AI) may be an emerging technology, but there are plenty of billion-dollar companies in this space. As the market has grown over the past few years, AI technology has made strong inroads into several key industries, including logistics, manufacturing, finance, healthcare, customer service and cybersecurity. While AI-driven advancements in robotics have received the most press in recent years, the latest buzz has centered around OpenAI's ChatGPT. This intelligent chatbot shows how quickly generative AI is advancing, and has attracted the attention of heavyweight technology companies such as Microsoft (NASDAQ:MSFT), which has reportedly invested billions of dollars in the privately held OpenAI. Alphabet (NASDAQ:GOOGL) has also released its own AI chat tool, Google Gemini. On a global scale, Fortune Business Insights predicts that the AI industry will experience a compound annual growth rate of 20.4 percent between 2024 and 2032 to reach a market value of more than US$2.74 trillion. Here the Investing News Network profiles some of the biggest AI stocks by market cap on US, Canadian and Australian stock exchanges. Data for this AI stocks list was gathered on June 27, 2024, using TradingView's stock screener. American AI stocks According to Tracxn Technologies, the number of US AI companies has more than doubled since 2017 with over 75,740 companies working in the sector today. One of the major factors fueling growth in the American AI market, states Statista, is "the growing investments and partnerships among technology companies, research institutions, and governments." Below are three of the top US AI stocks organized by market cap. In addition to the reported billions Microsoft is committed to investing in OpenAI, the technology behemoth has built its own AI solutions based on the chatbot creator's technology: Bing AI and Copilot. OpenAI officially licensed its technologies to Microsoft in 2020. An update to Windows 11 in 2023 integrated the Bing chatbot into the operating system's search bar, allowing users to interact with the chatbot directly with Microsoft's Edge browser, Chrome and Safari. Microsoft's moves into generative AI have translated into higher revenues for its Azure cloud computing business and a higher market capitalization as the tech giant pushed past the US$3 trillion mark in January 2024. In late May, Microsoft unveiled its Copilot+ Windows PCs, the company's first range of AI PCs, which the company says are the "fastest, most intelligent Windows PCs ever built." The global leader in graphics processing unit (GPU) technology, NVIDIA is designing specialized chips used to train AI and machine learning models for laptops, workstations, mobile devices, notebooks, and PCs. The company is partnering with a number of big name tech firms to bring a number of key AI products to market. Through its partnership with Dell Technologies (NYSE:DELL), NVIDIA is developing AI applications for enterprises, such as language-based services, speech recognition and cybersecurity. The chip maker has been instrumental in the build out of Meta Platforms' (NASDAQ:META) AI supercomputer called the Research SuperCluster, which reportedly uses a total of 16,000 of NVIDIA's GPUs. In the first quarter, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) and NVIDIA released the world's first multi-die chip specifically designed for AI applications: the Blackwell GPU. Blackwell's architecture allows for the increased processing power needed to train larger and more complex AI models. In early June, NVIDIA saw its market cap zoom past the US$3 trillion mark to surpass that of Apple (NASDAQ:AAPL). On June 18, its valuation jumped to as high as US$3.34 trillion to briefly pass Microsoft before pulling back. Alphabet holds court with both Microsoft and NVIDIA as part of the tech sector's Magnificent 7, and its foray into AI has similarly brought the tech giant much success. Alphabet's market cap surpassed the US$2 trillion mark in April. It would seem investors still remain confident in the potential for growth in Alphabet's AI ventures despite its hiccups in the rollout of its subsidiary Google's AI chatbot Gemini, formerly called Bard. "While the headlines haven't been favorable, Google's role in generative AI products will present massive growth opportunities for the stock," said Sylvia Jablonski, chief executive officer at Defiance ETFs. In early April, Google introduced a custom AI chip designed for its cloud services customers. Set to be delivered later this year, the technology uses British semiconductor company Arm Holding's (NASDAQ:ARM) AI architecture. In the same week, Google revealed its new A3 Mega AI processor based on NVIDIA's H100 Technology. Recognized as a world-leading AI research hub, Canada ranks fifth out of 62 countries in the Global AI Index. Since 2017, the Canadian government has invested hundreds of millions of dollars into accelerating the research and commercialization of AI technology in the country through the Pan-Canadian Artificial Intelligence Strategy. Recent research by IBM (NYSE:IBM) says Canadian businesses are increasingly adopting AI, with 37 percent of IT professionals in large enterprises reporting that they have deployed the technology in their operations. Montreal-based CGI is among the world's largest IT systems integration companies, and offers a wide range of services, from cloud migration and digital transformation to data analysis, fraud detection and even supply chain optimization. Its more than 700 clients span the retail, wholesale, consumer packaged goods and consumer services sectors worldwide. Through a partnership with Google, CGI is leveraging the Google Cloud Platform to strengthen the capabilities of its CGI PulseAI solution, which can be integrated with existing applications and workflows. CGI is aggressively working to expand its generative AI capabilities and client offerings, and reportedly is planning to invest US$1 billion into its AI offerings. In early March, the company launched Elements360 ARC-IBA, an AI powered platform for brokers and insurers to settle accounts in the UK broking industry. Descartes Systems Group provides on-demand software-as-a-service (SaaS) solutions. The multinational technology company specializes in logistics software, supply chain management software and cloud-based services for logistics businesses. AI and machine learning enhancements to Descartes' routing, mobile and telematics suite are helping the company's customers optimize fleet performance. "AI and ML are perfect extensions to our advanced route optimization and execution capabilities," Ken Wood, executive vice president at Descartes, said. "From dynamic delivery appointment scheduling through planning and real-time route execution, we've used AI and ML to improve our ability to deliver the next level of fleet performance for customers." Ontario-based OpenText is one of Canada's largest software companies. The tech firm develops and sells enterprise information management software. Its portfolio includes hundreds of products in the areas of enterprise content management, digital process automation and security, plus AI and analytics tools. OpenText serves small businesses, large enterprises and governments alike. OpenText's AI & Analytics platform has an open architecture that enables integration with other AI services, including Google Cloud and Azure. It can leverage all types of data, including structured or unstructured data, big data and the internet of things to quickly create interactive visuals. Early in the year, OpenText launched its Cloud Editions 24.1, which includes enhancements to its OpenText Aviator portfolio. "Leveraging AI for impactful results depends on reliable data - without it, even the most skilled data scientists will struggle," OpenText CEO and chief technology officer Mark J. Barrenechea stated. "By expanding the Aviator portfolio in conjunction with our world class information management platform, Cloud Editions 24.1 empowers customers with the tools and insights needed to get ahead." AI investment in Australia is expected to reach AU$5.7 billion in 2026, according to research firm IDC. The biggest spenders when it comes to AI in Australia are the banking industry, the federal government, professional services and retail. New Zealand-based technology company Xero provides cloud-based accounting software for small- and medium-sized businesses. The company's product portfolio also includes the Xero Accounting app, Xero HQ, Xero Ledger, Xero Workpapers and Xero tax tools. Xero has made a number of AI enhancements to its platform in recent years, including bank reconciliation predictions that save time and reduce errors, and Analytics Plus, a suite of AI-powered planning and forecasting tools. In March, the company launched its Gen AI assistant, named Just Ask Xero, or JAX. Some of its features include the automation or streamlining of repetitive and time-consuming tasks; the ability to anticipate tasks based on previous user actions and the ability to make cashflow projections on request. TechnologyOne is another large enterprise technology software firm in Australia. In fact, it is the country's largest enterprise resource planning SaaS company. TechnologyOne has a client base of over 1,200, including customers in the government, education, health and financial services sectors across Australia, New Zealand and the UK. The company's research and development center is targeting cloud-based technology, artificial intelligence and machine learning. Municipalities such as Shoalhaven in the UK are using TechnologyOne AI-based SaaS solutions to manage city services, including waste management and road maintenance. TechnologyOne's H1 2024 financial results highlighted its 15th year of record first half revenue, profit and SaaS fees. Israeli semiconductor IP company Weebit Nano develops silicon oxide-based resistive random-access memory (ReRAM) technologies. The company seeks to address the need for significantly higher-performance and lower-power computer memory technology. Weebit's products can be used to enable edge AI applications and AI systems such as neuromorphic computing. An advancement in AI and machine learning, neuromorphic computing is based on architectures designed to function in the same way as the human brain's operation. Weebit says its ReRAM cell "functions similarly to a synapse in the brain, making it a promising solution for neuromorphic computing." The company is collaborating with research partners in academia and industry to further develop the use of ReRAM for neuromorphic computing. Google and Microsoft are battling it out for king of the AI hill. While Goldman Sachs sees Alphabet's Google as leading the AI race, other analysts are pointing to Microsoft as the clear frontrunner. Microsoft stands to benefit in a big way from its billions of dollars investment in OpenAI's ChatGPT as advancements in generative AI may have the potential to increase the company's revenues for its Azure cloud computing business. Which country is doing best in AI? North America is the global hotspot for advancements in AI technology and is home to the majority of the world's largest AI providers. Of the countries in this region, Canada's AI industry is showing the fastest growth, according to a report by Deloitte. Techopedia positions the US as the primary hub for AI development, and many of the world's leading tech giants are headquartered there. According to the report, China comes in a close second. What is Elon Musk's AI company? In November 2023, Elon Musk launched Grok, a new AI technology company based in Nevada. While not much is known about the company yet, Musk said he is starting it as a "third option" to ChatGPT and Google Gemini; its product will be named TruthGPT. Does Tesla have its own AI? Tesla (NASDAQ:TSLA) has developed proprietary AI chips and neural network architecture. The company's autonomous vehicle AI system gathers visual data in real time from eight cameras to produce a 3D output that helps to identify the presence and motion of obstacles, lanes and traffic lights. The AI-driven models also help autonomous vehicles make quick decisions. In addition to developing autonomous vehicles, Tesla is working on bi-pedal robotics. Don't forget to follow us @INN_Technology for real-time news updates! Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Billionaire Hedge Fund Managers' 2 Favorite Artificial Intelligence (AI) Stocks (Hint: Nvidia Isn't 1 of Them)

That phrase gained notoriety during the Watergate scandal five decades ago. However, it could be useful for investors today looking for stocks to buy. Much of the big money has poured into artificial intelligence (AI) stocks over the last two years. Nvidia has been an especially significant beneficiary of this trend, with its shares skyrocketing over 9x since the beginning of 2023. But where would following the money lead investors now? Here are billionaire hedge fund managers' two favorite AI stocks -- and Nvidia isn't one of them. The top hedge fund billionaires Forbes ranked the wealthiest hedge fund managers of 2023. The top 10 were: Data source: Forbes. Jim Simons has since passed away, although his Renaissance Technologies hedge fund remains active. The net worths of the other nine hedge fund managers have changed somewhat since last year, but they're all still multibillionaires. Most of these billionaire hedge fund managers have invested heavily in AI. Carl Icahn stands out as a notable exception. None of Icahn Enterprises' holdings are AI-related. Michael Platt's BlueCrest Capital also has no AI stocks among its top positions. Billionaire hedge fund managers' two favorite AI stocks However, two AI stocks, in particular, are arguably the favorites of the other billionaire hedge fund managers. Amazon (NASDAQ: AMZN) ranked in the top five holdings of seven of the 10 richest hedge fund managers on Forbes' list based on their latest regulatory filings. Microsoft (NASDAQ: MSFT) wasn't too far behind, landing in the top five for half the 10 wealthiest hedge fund managers. Steve Cohen and Israel England like Amazon the most. The e-commerce and cloud services leader is the largest holding for Cohen's Point72 Asset Management and England's Millennium Management. Amazon is the second-largest holding for David Tepper's Appaloosa Management. Microsoft ranks as the No. 1 position for David Shaw's D.E. Shaw & Co. It's the second-largest holding for Chase Coleman's Tiger Global Management. And while the tech giant isn't Ken Griffin's biggest position for his Citadel fund, Microsoft is his top AI stock. Runners up Although Nvidia wasn't one of billionaire hedge managers' top two favorite AI stocks, it was a close runner-up. The graphics processing unit (GPU) maker was in the top five holdings for four of Forbes' 10 richest hedge fund managers. Perhaps surprisingly, though, Nvidia wasn't the No. 1 AI stock for any of them. Meta Platforms wasn't too far behind either. It ranked in the top five holdings for three of the individuals on Forbes' list. Meta is the largest position for Coleman's Tiger Global Management. Should you buy Amazon and Microsoft too? No one should buy a stock only to follow in the footsteps of billionaire investors. However, I think Amazon and Microsoft have a lot going for them. Amazon is the world's largest cloud services provider. AI should provide a long-term tailwind for the company's Amazon Web Services unit. Amazon is also using AI extensively in its e-commerce operations to increase efficiency and profitability. Microsoft continues to reap the rewards from its partnership with ChatGPT creator OpenAI. It has integrated OpenAI's GPT-4 throughout its products. The company is the second-largest cloud service provider and should benefit from the same AI tailwind as Amazon. As customers continue to move to the cloud to build and deploy AI models, Amazon's and Microsoft's revenue and earnings should grow significantly. Share prices tend to rise with earnings growth over the long term. I view Amazon and Microsoft as great AI stocks to buy right now. Just follow the AI money. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Best Stocks to Invest $1,000 In Right Now | The Motley Fool

The stock market soared in the first half of the year, with the S&P 500 confirming a bull market as it reached a record high -- but the benchmark didn't stop there. Instead, it went on to reach additional highs, and technology stocks led the way. Investors have been feeling optimistic for general reasons, such as the possibility of interest rate cuts ahead. And they've also been getting excited about growth companies, in particular those involved in a potentially game-changing technology: artificial intelligence (AI). Though the S&P 500's 14% increase in the first half and the gains by many tech stocks might seem like a lot, this positive momentum could be far from over. History shows us that, for the S&P 500, a solid first half often leads to a solid second half. As for AI, we're in the early days of the growth story, with analysts predicting today's $200 billion market will reach beyond $1 trillion by the end of the decade. All of this means today it's a great idea to invest in AI stocks that are just getting geared up for growth. Let's check out the best stocks to invest $1,000 in right now. (And with that amount, you can pick up all three of these potential AI winners.) Oracle (ORCL 1.41%) isn't the biggest cloud services provider today, but it's one of the fastest-growing players. The company, once most known for its database strengths, has transitioned to put its focus on cloud infrastructure and services, and this has shown itself to be a wise move. Over the past two quarters, Oracle signed its biggest sales contracts ever thanks to demand for large language model (LLM) training. This training is a key step in AI because once an LLM is trained, it then can go on to do the critical job of solving complex problems. The company said in recent quarters that AI infrastructure demand has been exceeding supply even as Oracle opens new data centers and expands existing ones. All of this has helped cloud infrastructure revenue take off, soaring 42% in the most recent quarter, and the growth in contracts has boosted remaining performance obligations (RPO), or the revenue to be expected from those contracts, by 44% to $98 billion. Considering all of this, Oracle stock looks dirt cheap today, trading at 22x forward earnings estimates. Intel (INTC 2.96%) fell behind in the AI race, but that doesn't mean we should turn our backs on this tech giant. The company, a powerhouse in the world of central processing units (the main processor in a computer), has put a new focus on AI and recently announced some exciting new products. Aiming to power the era of the AI personal computer, Intel released the Intel Core Ultra mobile processor family. The AI PC, with the ability to smoothly handle AI tasks brings AI into the hands of the general PC user. It's still too early to say whether the product will take off, but if it does Intel should reap the rewards. Intel also has released its Gaudi 3 accelerator, a chip that has shown 50% better inference than Nvidia's current top-performing chip, H100, and 40% better power efficiency -- and all this at a lower price. Even though Nvidia continues to release better and better chips and should easily maintain its lead, Intel's latest product clearly could carve out market share -- and generate growth for the company. Intel shares trade for about 31x forward earnings estimates, a very reasonable entry point for this company that's just getting started along its AI growth path. You probably know Meta Platforms (META -2.70%) best for its social media apps Facebook, Messenger, WhatsApp, and Instagram. But Meta has put a major focus on AI, and as a matter of fact said the technology will be its biggest investment area this year. What is Meta planning? The company aims to develop AI across its products and services and offer AIs that all of us can use for both leisure and professional tasks. The company started by recently launching Meta AI, a new virtual assistant -- as Meta says, this tool can help you with anything from creating a menu from what's in your fridge to preparing for an exam. Meta is in the investment phase right now, but eventually these efforts should result in revenue growth. It's important to remember that most of Meta's revenue comes from advertising. If we as users spend more time on Meta thanks to its AI tools, advertisers may spend more and more on the platform to reach us. Even though Meta shares have climbed about 50% this year, the stock only trades for 26x forward earnings estimates -- a bargain considering the company's profitability now and potential AI growth to come.

The Best Stocks to Invest $1,000 In Right Now

The stock market soared in the first half of the year, with the S&P 500 confirming a bull market as it reached a record high -- but the benchmark didn't stop there. Instead, it went on to reach additional highs, and technology stocks led the way. Investors have been feeling optimistic for general reasons, such as the possibility of interest rate cuts ahead. And they've also been getting excited about growth companies, in particular those involved in a potentially game-changing technology: artificial intelligence (AI). Though the S&P 500's 14% increase in the first half and the gains by many tech stocks might seem like a lot, this positive momentum could be far from over. History shows us that, for the S&P 500, a solid first half often leads to a solid second half. As for AI, we're in the early days of the growth story, with analysts predicting today's $200 billion market will reach beyond $1 trillion by the end of the decade. All of this means today it's a great idea to invest in AI stocks that are just getting geared up for growth. Let's check out the best stocks to invest $1,000 in right now. (And with that amount, you can pick up all three of these potential AI winners.) Oracle (NYSE: ORCL) isn't the biggest cloud services provider today, but it's one of the fastest-growing players. The company, once most known for its database strengths, has transitioned to put its focus on cloud infrastructure and services, and this has shown itself to be a wise move. Over the past two quarters, Oracle signed its biggest sales contracts ever thanks to demand for large language model (LLM) training. This training is a key step in AI because once an LLM is trained, it then can go on to do the critical job of solving complex problems. The company said in recent quarters that AI infrastructure demand has been exceeding supply even as Oracle opens new data centers and expands existing ones. All of this has helped cloud infrastructure revenue take off, soaring 42% in the most recent quarter, and the growth in contracts has boosted remaining performance obligations (RPO), or the revenue to be expected from those contracts, by 44% to $98 billion. Considering all of this, Oracle stock looks dirt cheap today, trading at 22x forward earnings estimates. 2. Intel Intel (NASDAQ: INTC) fell behind in the AI race, but that doesn't mean we should turn our backs on this tech giant. The company, a powerhouse in the world of central processing units (the main processor in a computer), has put a new focus on AI and recently announced some exciting new products. Aiming to power the era of the AI personal computer, Intel released the Intel Core Ultra mobile processor family. The AI PC, with the ability to smoothly handle AI tasks brings AI into the hands of the general PC user. It's still too early to say whether the product will take off, but if it does Intel should reap the rewards. Intel also has released its Gaudi 3 accelerator, a chip that has shown 50% better inference than Nvidia's current top-performing chip, H100, and 40% better power efficiency -- and all this at a lower price. Even though Nvidia continues to release better and better chips and should easily maintain its lead, Intel's latest product clearly could carve out market share -- and generate growth for the company. Intel shares trade for about 31x forward earnings estimates, a very reasonable entry point for this company that's just getting started along its AI growth path. 3. Meta Platforms You probably know Meta Platforms (NASDAQ: META) best for its social media apps Facebook, Messenger, WhatsApp, and Instagram. But Meta has put a major focus on AI, and as a matter of fact said the technology will be its biggest investment area this year. What is Meta planning? The company aims to develop AI across its products and services and offer AIs that all of us can use for both leisure and professional tasks. The company started by recently launching Meta AI, a new virtual assistant -- as Meta says, this tool can help you with anything from creating a menu from what's in your fridge to preparing for an exam. Meta is in the investment phase right now, but eventually these efforts should result in revenue growth. It's important to remember that most of Meta's revenue comes from advertising. If we as users spend more time on Meta thanks to its AI tools, advertisers may spend more and more on the platform to reach us. Even though Meta shares have climbed about 50% this year, the stock only trades for 26x forward earnings estimates -- a bargain considering the company's profitability now and potential AI growth to come. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Oracle wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, and Oracle. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Billionaire Hedge Fund Managers' 2 Favorite Artificial Intelligence (AI) Stocks (Hint: Nvidia Isn't 1 of Them) | The Motley Fool

Most of the world's wealthiest hedge fund managers are investing heavily in AI. And they especially like two AI stocks. That phrase gained notoriety during the Watergate scandal five decades ago. However, it could be useful for investors today looking for stocks to buy. Much of the big money has poured into artificial intelligence (AI) stocks over the last two years. Nvidia has been an especially significant beneficiary of this trend, with its shares skyrocketing over 9x since the beginning of 2023. But where would following the money lead investors now? Here are billionaire hedge fund managers' two favorite AI stocks -- and Nvidia isn't one of them. Forbes ranked the wealthiest hedge fund managers of 2023. The top 10 were: Data source: Forbes. Jim Simons has since passed away, although his Renaissance Technologies hedge fund remains active. The net worths of the other nine hedge fund managers have changed somewhat since last year, but they're all still multibillionaires. Most of these billionaire hedge fund managers have invested heavily in AI. Carl Icahn stands out as a notable exception. None of Icahn Enterprises' holdings are AI-related. Michael Platt's BlueCrest Capital also has no AI stocks among its top positions. However, two AI stocks, in particular, are arguably the favorites of the other billionaire hedge fund managers. Amazon (AMZN -0.29%) ranked in the top five holdings of seven of the 10 richest hedge fund managers on Forbes' list based on their latest regulatory filings. Microsoft (MSFT -0.25%) wasn't too far behind, landing in the top five for half the 10 wealthiest hedge fund managers. Steve Cohen and Israel England like Amazon the most. The e-commerce and cloud services leader is the largest holding for Cohen's Point72 Asset Management and England's Millennium Management. Amazon is the second-largest holding for David Tepper's Appaloosa Management. Microsoft ranks as the No. 1 position for David Shaw's D.E. Shaw & Co. It's the second-largest holding for Chase Coleman's Tiger Global Management. And while the tech giant isn't Ken Griffin's biggest position for his Citadel fund, Microsoft is his top AI stock. Although Nvidia wasn't one of billionaire hedge managers' top two favorite AI stocks, it was a close runner-up. The graphics processing unit (GPU) maker was in the top five holdings for four of Forbes' 10 richest hedge fund managers. Perhaps surprisingly, though, Nvidia wasn't the No. 1 AI stock for any of them. Meta Platforms wasn't too far behind either. It ranked in the top five holdings for three of the individuals on Forbes' list. Meta is the largest position for Coleman's Tiger Global Management. No one should buy a stock only to follow in the footsteps of billionaire investors. However, I think Amazon and Microsoft have a lot going for them. Amazon is the world's largest cloud services provider. AI should provide a long-term tailwind for the company's Amazon Web Services unit. Amazon is also using AI extensively in its e-commerce operations to increase efficiency and profitability. Microsoft continues to reap the rewards from its partnership with ChatGPT creator OpenAI. It has integrated OpenAI's GPT-4 throughout its products. The company is the second-largest cloud service provider and should benefit from the same AI tailwind as Amazon. As customers continue to move to the cloud to build and deploy AI models, Amazon's and Microsoft's revenue and earnings should grow significantly. Share prices tend to rise with earnings growth over the long term. I view Amazon and Microsoft as great AI stocks to buy right now. Just follow the AI money.