Billionaire Investors Shift AI Stock Holdings: Nvidia Gains Favor as Competition Heats Up

Billionaires Love This Tech Stock. But Will It Continue Its Reign in 2025? | The Motley Fool

Looking for the next big thing in tech investments? Several billionaire-owned hedge funds are heavily invested in one overlooked AI expert, and you might want to follow their lead. In a recent analysis of 16 hedge funds managed by household-name billionaires, four of the funds held lots of Advanced Micro Devices (AMD 1.89%) shares. What's more, the funds that ranked AMD among their ten largest holdings consistently placed the stock among the top four. That's an interesting showing, since AMD isn't one of the commonly chosen "Magnificent Seven" stocks. Its $207 billion market cap barely ranks among the 50 largest stocks in today's market. Have these billionaires figured out something special about AMD? Let's see what the semiconductor designer's business prospects look like in 2025. It should be noted that these billionaires can't dictate AMD's strategy or future to any meaningful degree. Together, these found funds own about 2% of AMD's shares. Seen as a unified block of AMD owners, their 32.5 million stubs would qualify them as the sixth-largest institutional holder today. That's a long way behind Vanguard's and Blackrock's index funds, which hold 149 million and 130 million AMD shares, respectively. But the index fund managers don't assess each stock in their enormous portfolios. They simply reflect the rankings and weightings of various stock market listings, which in turn usually try to paint a fair picture of the stock market from a certain perspective. As a member of at least 21 such indices, AMD is bound to attract large index-fund investments. Hedge funds often push for changes in their most important holdings. However, none of the four AMD holders in the table above are in the habit of playing the activist investor card. With a market cap north of $200 billion, it gets expensive to build a large enough position to influence boardroom votes. Above all else, AMD benefits from the ongoing market boom around generative artificial intelligence (AI). The data center segment, where you see revenues from the AI-training AMD Instinct line of chips, saw third-quarter revenues jump 122% year over year. Data center products accounted for more than half of AMD's total sales in that report, up from 27% in the year-ago period. AMD isn't all about AI and data center growth, since the PC-oriented client division also posted strong results. Revenues rose 29% in that segment amid robust demand for the Zen 5 line of Ryzen processors. But yeah, it's fair to say that the billionaires above are betting on AMD's AI business. The Instinct chips may not outperform market leader Nvidia's (NVDA 3.14%) latest and greatest chips on an apples-to-apples basis, but they offer other benefits such as lower electric power consumption and more affordable prices per chip. For example, the Lawrence Livermore National Laboratory built its latest supercomputer around AMD's Instinct MI3001 accelerators, creating the highest-performance system in the world. On the just-released Top 500 list of high-performance supercomputers, you'll find AMD Instinct chips in half of the top 10. Nvidia's H100, A100, and Grace Hopper chips only show up in three names on that list. Supercomputers aren't the whole market for AI training systems, but AMD is clearly doing something right. You don't win these large system orders by pure luck. So if you're looking for an alternative way to invest in the hardware side of that AI boom, you could do well by following the examples of Laffont, Griffin, Shaw, and Halvorsen. It's not the absolute cheapest AI hardware stock, since arch rival Intel (INTC -0.20%) is wrestling with management changes and a painful strategy shift. But AMD's stock trades at 8.5 times trailing sales and 25 times forward earnings estimates. That's blissfully affordable next to Nvidia's multiples of 29 and 31, respectively. I can't guarantee that AMD will outperform Nvidia, the AI niche, or the market as a whole next year, but the billionaires made large bets on this stock for good reason. I'd rather start buying AMD stock today than add to my Nvidia holdings, and you should at least look into doing the same.

Billionaire Ole Andreas Halvorsen Just Sold All of His Broadcom Stock and Piled Into This Year's Top Dow Jones Performer | The Motley Fool

These stocks each have climbed in recent times, offering early investors solid rewards. The investment community eagerly awaits a particular filing every quarter -- and it's one that offers us a view into the latest moves of the world's top investors. This particular moment happened a few weeks ago when institutional investors managing at least $100 million filed their 13F forms with the Securities and Exchange Commission (SEC). These forms show the latest buys and sells of these expert investors along with information on their current holdings. Why are the rest of us so eager to see the latest 13F filings? They may offer us inspiration for our own portfolios as we search for investing ideas. Of course, these billionaires, like the rest of us, don't score a win with every stock pick. But they do have significant track records of success, so it's worth studying their moves -- and in some cases following them. In the most recent quarter, billionaire Ole Andreas Halvorsen took a big step in the hot area of artificial intelligence (AI), selling all of his Broadcom (AVGO 6.63%) shares and piling into this year's top Dow Jones Industrial average performer. Let's dive in and consider if it could be the right move for you. First, a quick look at this top investor. At the helm of Viking Global Investors, Halvorsen helps manage more than $27 billion in securities falling under 13F reporting requirements. He is known as a "tiger cub," having spent the earlier days of his career working at Julian Robertson's Tiger Management, one of the first hedge funds, before launching Viking back in 1999. In the third quarter, Halvorsen and his team made 23 new purchases and added to 21 current positions, but they also sold out of 22 stocks and reduced holdings of 26. So, they favored selling, but not by a huge degree. It's important to keep in mind that in some cases selling is done to lock in profits and isn't necessarily linked to a loss of faith in a particular company or the market in general. Now, let's consider Halvorsen's big AI move in the third quarter. The billionaire sold his entire position in Broadcom, a company that's seen its shares advance in recent years thanks to its key role in networking. About 99% of today's Internet traffic passes through some sort of Broadcom technology. Halvorsen originally bought the shares in the second quarter of this year, so this wasn't a long-term holding. Broadcom shares may have been a winning investment, though, as they rose 30% from the start of the second quarter through the end of the third quarter. But Halvorsen and his team may have preferred the performance of another AI stock in recent times, one that's heading for the biggest gain in the Dow Jones Industrial Average this year. I'm talking about AI star Nvidia (NVDA 3.14%), which actually joined the Dow Jones recently -- just last month. Halvorsen increased his Nvidia holding in the third quarter by 63%, a signal that the billionaire thinks this top player still has room to run. Nvidia also is a newish holding for Halvorsen, as he first bought the stock in the second quarter of this year. So, could favoring Nvidia over Broadcom be the right move for you? This depends on your investing style and strategy. Broadcom today is much cheaper than Nvidia, trading at 28 times forward earnings estimates compared with Nvidia's 47. And Broadcom also is likely to benefit from growth in the AI market -- cloud service providers are flocking to the company for AI networking and custom AI accelerators. Analysts predict that today's $200 billion AI market should reach $1 trillion by the end of the decade. For investors looking for a bargain AI buy, Broadcom makes a great choice right now. But investors eager to get into a high-growth AI stock still may favor Nvidia even after its 180% gain this year and even considering its valuation. The company dominates the AI chip space and thanks to its pledge to innovate, it's likely to hang onto this leadership. On top of that, Nvidia is launching its new Blackwell architecture over the coming weeks, and this could be a major catalyst for earnings growth and share performance. So both of these stocks make compelling AI buys today, but high-growth investors may favor following Halvorsen's move and piling into Nvidia.

Billionaire Battleground Stock: Philippe Laffont Is Dumping Wall Street's Leading Artificial Intelligence (AI) Stock, While Ole Andreas Halvorsen Can't Stop Buying It

November was a big month for Wall Street. The heart of earnings season, Election Day, and key economic reports (jobs and inflation data), set the tone that lifted the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite to respective record highs. But investors might have missed what can be described as the most important data release of the fourth quarter. Nov. 14 was the deadline for institutional investors with at least $100 million in assets under management (AUM) to file Form 13F with the Securities and Exchange Commission. A 13F allows everyday investors to track which stocks Wall Street's most-successful asset managers have been buying and selling. The latest round of 13Fs should be of particular interest to investors putting their money to work in the artificial intelligence (AI) revolution. According to Sizing the Prize, the analysts at PwC believe AI will increase global gross domestic product by 26% come 2030. However, the outlook for the face of the AI revolution, semiconductor colossus Nvidia (NVDA -2.69%), is mixed among some of Wall Street's most-prominent billionaire money managers. Whereas Coatue Management's Philippe Laffont can't stop selling shares of Nvidia, Viking Global Investors' Ole Andreas Halvorsen has been an avid buyer. Halvorsen's Viking Global gobbles up more than 2.26 million shares of Nvidia When the curtain closed on Sept. 30, Halvorsen was overseeing more than $27 billion in AUM spread across 83 stocks at Viking Global. Since this year began, 2,265,322 shares of Nvidia have been purchased, which is a figure that accounts for the latter's historic 10-for-1 stock split in June. The reason Viking Global's brightest minds, including Halvorsen, can't stop buying shares of Nvidia can be boiled down to market share dominance, innovation, and software integration. According to a study by the analysts at TechInsights, Nvidia accounted for roughly 98% of the graphics processing units (GPUs) shipped to data centers in 2022 and 2023. Even with new GPU competition entering the arena, Nvidia is unlikely to cede much of its monopoly like share. To add to this point, demand for Nvidia's hardware has handily outpaced supply. When the demand for a good outstrips supply, its price will climb until demand tapers. Nvidia has been enjoying a 100% to 300% price premium for its ultra-popular Hopper (H100) GPU, when compared to the price point of Advanced Micro Devices Insight MI300X chips. This otherworldly price premium has sent Nvidia's gross margin through the roof. Halvorsen and his team are likely also looking for Nvidia to retain its innovative dominance in the AI space. The successor Blackwell GPU architecture is aimed at accelerating computing capabilities in six areas, including generative AI solutions. Most importantly, it can increase computing speed while being more energy efficient. Nvidia's CEO Jensen Huang characterized demand for Blackwell as "insane" back in October. Lastly, Halvorsen is likely impressed by Nvidia's integration of its CUDA software platform to keep clients loyal to the brand. CUDA is the toolkit developers use to build large language models and maximize the computing potential of their Nvidia GPUs. Laffont's Coatue jettisoned almost 39.7 million shares of Wall Street's AI darling Despite Nvidia's phenomenal growth rate, not all billionaire investors are buyers. Over a six-quarter stretch (March 31, 2023 through Sept. 30, 2024), Coatue Management's Philippe Laffont, who coincidentally also oversees close to $27 billion in AUM, sent approximately 39.66 million split-adjusted shares of Nvidia to the chopping block, representing 80% of his fund's stake. There's little doubt that benign profit-taking has played at least some role in this persistent selling activity. Shares are up 875% since 2023 began, which is a hefty enough gain to encourage most billionaire money managers to cash in some of their chips. The concern is that there may be more to this selling than just simple profit-taking. For instance, history doesn't bode particularly well for Nvidia. We haven't witnessed a game-changing technology or innovation escape an early stage bubble-bursting event in three decades. All innovations need proper time to mature, and artificial intelligence doesn't look to be anywhere close to a mature technology, as evidenced by most businesses lacking a clear plan to monetize their AI investments. No stock would be more directly clobbered if the AI bubble bursts than Nvidia. Insiders have been dumping shares with regularity since Nvidia split its stock in June. NVDA Shares Owned By Insiders data by YCharts. Coatue's chief might also be taking his cues from Nvidia's insiders, who haven't purchased a single share of their company's stock on the open market in four years. Though not all insider selling activity is necessarily bad news, the only reason insiders buy is if they believe the share price will head higher. Four years without any buying activity paints a clear picture that insiders don't believe their stock is a good value. There are regulatory worries, too, with the Joe Biden administration restricting exports of AI chips and related equipment to China. With the incoming Donald Trump administration looking to play hardball with the world's No. 2 economy by implementing tariffs, it doesn't appear as if Nvidia's situation will improve. Laffont may be honing in on increasing competition for Nvidia, as well. In addition to AMD ramping up production, many of Nvidia's top customers by net sales (i.e., members of the "Magnificent Seven") are developing AI chips of their own. Even with these chips lagging Nvidia's Hopper and Blackwell GPUs in computing speed, they're going to be considerably cheaper and more accessible. In short, Nvidia could lose out on valuable data center space. While Nvidia's eye-popping growth rate has done the talking over the last two years, it's difficult to envision the company bucking three decades of history or avoiding margin contraction as competition picks up and AI-GPU scarcity wanes.

Billionaire Steven Cohen Sold Point72's Entire Stake in Supermicro and Is Piling Into This Game-Changing Artificial Intelligence (AI) Stock Instead

Cohen's Point72 Asset Management swapped out a potentially troubled AI stock for the presumed cream of the crop. In November, Wall Street and investors were privy to a flood of important data releases. Election Day, monthly economic data reports, and earnings season -- the six-week period each quarter where a majority of S&P 500 companies announce their operating results -- make it easy for a meaningful announcement to go unnoticed. For example, investors may have been so swamped by other news events that they completely missed the Nov. 14 deadline to file Form 13F with the Securities and Exchange Commission. A 13F is a required filing for institutional investors with at least $100 million in assets under management (AUM) that provides a concise snapshot of the stocks Wall Street's most prominent money managers are buying and selling. As you may have guessed, no 13F is more anticipated than that of Warren Buffett at Berkshire Hathaway. When you crush the benchmark S&P 500 like Buffett has consistently done over six decades, you're going to draw quite the following. However, Berkshire's "Oracle of Omaha" is far from the only billionaire money manager that investors pay close attention to. For instance, investors also closely follow the trades made by billionaire Steven Cohen of Point72 Asset Management. Cohen's fund closed out the September-ended quarter with more than $39 billion in AUM, which includes various put and call options, as well as common-stock positions. But what really stands out about Point72's trading activity during the third quarter is what Cohen and his team were up to within the artificial intelligence (AI) arena. Cohen's Point72 bids adieu to potentially troubled AI stock Supermicro In Sizing the Prize, the analysts at PwC forecast a $15.7 trillion increase in global gross domestic product by 2030, due to the rise of AI. But history also tells us that not every company tethered to a game-changing trend is necessarily going to be a winner. During the September-ended quarter, Cohen's Point72 Asset Management dumped its entire position in customizable rack server and storage solutions specialist Super Micro Computer (SMCI -1.60%), which amounted to 45,066 shares, as of June 30. This means Cohen's fund exited prior to Supermicro completing its first-ever stock split of 10-for-1 following the close of trading on Sept. 30. On paper, a lot has gone right for Supermicro. Businesses wanting to take advantage of the AI revolution are aggressively spending on data center infrastructure, with the hope of gaining/maintaining first-mover advantages. Supermicro's customizable rack servers have been a top choice by businesses running AI-accelerated data centers. To add to the above, Super Micro Computer has been incorporating Nvidia's (NVDA -0.05%) high-powered graphics processing units (GPUs) into its rack servers. Nvidia's hardware has proven superior to the competition on a computing basis, which has further increased demand for Supermicro's data center infrastructure. According to the company, sales in fiscal 2024 (ended June 30) surged 110% to just shy of $15 billion. Meanwhile, Wall Street's consensus estimate calls for scorching-hot revenue growth of 67% in the current fiscal year to roughly $25 billion. But there were also a couple of clear-cut reasons for Point72's brightest investment minds, including Cohen, to ring the register and head for the exit. In late August, short-seller Hindenburg Research published a report that accused Supermicro of "accounting manipulation, sibling self-dealing, and sanctions evasion." While the company was quick to refute Hindenburg's allegations, it nevertheless delayed the filing of its annual report and, per The Wall Street Journal, is facing an early-stage probe of its accounting practices from federal regulators. To make matters worse, Super Micro Computer's auditor, Ernst & Young, which had previously raised concerns about the company's internal controls, resigned in late October. Even though Supermicro announced earlier this week that a review by an independent special committee expected no restatement of the company's financials, there are simply no certainties until its new auditor signs off on its financial statements and the company files its annual report. Wall Street and billionaire investors loathe uncertainty, which is likely what sent this hypergrowth stock to the chopping block during the third quarter. Cohen can't stop buying the hardware backbone of the AI revolution While Steven Cohen was showing Super Micro Computer to the door, he was stuffing Point72's proverbial pockets with shares of Wall Street's most cutting-edge AI stock, Nvidia. Cohen's fund purchased 1,574,796 shares during the third quarter, which increased its stake by a cool 75% in three months. It should be noted that Point72 also holds call options in Nvidia, which were reduced by 89% during the September-ended quarter. In other words, some of this increase may be the result of Cohen and his team exercising these call options and increasing the number of common shares owned. The most logical reason to buy shares of Nvidia, which I alluded to earlier, is that its hardware is in high demand and superior from a computing standpoint. Orders for the company's flagship H100 GPU (commonly called the "Hopper") and successor Blackwell GPU architecture are backlogged. It's easy to understand why Nvidia's share of the AI-GPU market has been monopoly-like to date. There's little question that Nvidia has been able to use AI-GPU scarcity to its advantage. With demand for the company's hardware handily outstripping supply, it's been able to command $30,000 to $40,000 for each Hopper chip. For some context, this is double to quadruple the price point of Advanced Micro Devices Insight MI300X GPU. A significant price premium has lifted Nvidia's gross margin to the mid-70% range and sent revenue through the roof. Credit should also be given to Nvidia's CUDA platform. CUDA is the software toolkit developers use to build large language models and maximize the computing potential of their Nvidia GPUs. It's effectively been an umbrella that's kept customers contained within Nvidia's ecosystem of products and services. But even Nvidia has its flaws and may not be the slam-dunk investment Wall Street and billionaire Steven Cohen believe it'll be. For instance, Nvidia is likely to lose its otherworldly pricing power and GPU scarcity advantages over the next year. In addition to AMD rapidly increasingly its production, many of Nvidia's largest customers by net sales, which are members of the "Magnificent Seven," are internally developing AI-GPUs of their own. Even though these chips won't have the same computing potential as Nvidia's hardware, they're going to be notably cheaper and more easily accessible. In other words, it creates a situation where Nvidia can lose valuable data center real estate in the coming quarters. The other serious issue for Nvidia is that no game-changing technology or innovation for at least 30 years has avoided an early stage bubble. Investors have persistently overestimated how quickly a new technology would gain utility and be adopted. The lesson is that all technologies take time to mature, and artificial intelligence is unlikely to be an exception. If the euphoria surrounding AI fades, Nvidia and its shareholders would, presumably, feel the pinch.

This Billionaire Just Took a Huge Stake in an Undervalued Artificial Intelligence (AI) Stock | The Motley Fool

Finding undervalued artificial intelligence (AI) stocks isn't easy. There is a lot of fluff in this space, as investors are excited about how game-changing this technology can be. However, there is one stock that I'd consider undervalued in this arena: Alphabet (GOOG -1.01%) (GOOGL -0.99%), the parent company of Google. I'm not the only one who thinks that, either. Billionaire Steve Cohen and his hedge fund, Point72, purchased nearly a $200 million stake in Alphabet during the third quarter, a rather large bet that the stock is undervalued. So, why is Alphabet considered undervalued? It's simple; it trades at a lower valuation than the S&P 500. The S&P 500 is often used as a benchmark to measure companies because it is a broad market index. It gives a good average of all market sectors, even if it is most heavily weighted toward tech (which is by far the largest sector). Right now, the S&P 500 trades at a forward price-to-earnings (P/E) ratio of 23, which is a historically expensive figure. Alphabet trades for about 21.5 times forward earnings, thus its undervaluation moniker. Alphabet owns Google, which is the most used internet search platform by far. However, this dominance has gotten the company into trouble as the Department of Justice seeks to break up part of Google by forcing the sale of its Google Chrome browser. It's unknown how large of an effect this would have on Alphabet, but it clearly would satisfy the DOJ's wishes to strip Alphabet of its monopoly. However, this is far from over. Alphabet will likely appeal the ruling, and the decision could last years until it potentially ends up in the Supreme Court. As a result, factoring this legal dispute into an Alphabet investment thesis becomes difficult. Furthermore, it also gives Alphabet time to build different channels so that it wouldn't be as dependent on the browser to gather information. Because of this, I'm not factoring this DOJ decision into my investment thesis (which may be a mistake years down the road). Alphabet is doing really well right now, and its best performing segment has nothing to do with the DOJ's decision. In Q3, Alphabet's revenue rose 15% year over year, and earnings per share (EPS) rose 37%. While advertising is Alphabet's primary revenue driver (about three-fourths of revenue came from advertising), it only grew 10.4% in the quarter. That's a ways off of its companywide 15% growth, so how did Alphabet's revenue grow overall? The rest of that growth came from my top reason for investing in Alphabet: Google Cloud. Google Cloud is Alphabet's cloud computing wing -- a platform that allows clients to rent computing resources from Alphabet. Google Cloud was doing well before the AI boom, but its growth has really accelerated recently. Google Cloud revenue rose 35% year over year, powered by new workloads coming online drawn by Alphabet's strong AI infrastructure. Google Cloud gives its clients access to the fastest Nvidia GPUs and Google's custom tensor processing units (TPUs), which provide superior performance to GPUs when the workload is configured correctly. Additionally, Google's in-house generative AI model, Gemini, is one of the top offerings in the space and is available to build on Google Cloud. Don't be surprised to see Google Cloud's strength carry on throughout 2025, as it will become a massive part of its business. With a final DOJ resolution likely years away and Alphabet capitalizing on the AI arms race, it seems like a solid investment story. Throw in the fact that it's valued at a lower level than the S&P 500, and it seems like a no-brainer investment.