Artificial intelligence (AI) stocks have become extremely popular since the launch of ChatGPT. Billionaire investors and hedge fund managers are among those benefiting from this technology boom, making millions from AI-related stocks like Nvidia. But what are these wealthy investors buying now? Recent 13-F filings give us a look at two AI stocks that billionaires are heavily investing in.

1. Microsoft

Microsoft (NASDAQ: MSFT) has been a favorite among AI investors, especially since ChatGPT’s debut. Microsoft is a major partner of OpenAI, the company behind ChatGPT, having invested around $13 billion into the startup. This partnership has paid off, as Microsoft has integrated OpenAI’s technology into many of its products, including Github, its office suite, Bing, and Azure. The adoption of Azure OpenAI has particularly driven significant growth.

Microsoft’s stock has continued to rise, showing strong performance in part due to its AI initiatives. Several top investors have noticed:

• Stanley Druckenmiller of Duquesne Capital Management added 26,150 shares of Microsoft in the first quarter, making it his biggest stock holding.
• Steven Cohen of Point72 Asset Management bought 566,749 shares of Microsoft in the first quarter, nearly doubling his fund’s stake.
• Ray Dalio‘s Bridgewater Associates added 381,793 shares in the same period, increasing his total to nearly 580,000 shares. Although it’s a small holding for the world’s biggest hedge fund, Dalio seems optimistic about Microsoft’s prospects.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent company of Google, is emerging as Microsoft’s main AI competitor. Alphabet introduced its AI chatbot, Bard, soon after ChatGPT, and has since replaced it with Gemini. The company has also started incorporating AI-based answers in Google search queries.

Alphabet was an early AI adopter, acquiring DeepMind nearly ten years ago. Despite initially being cautious about releasing new AI products, the success of ChatGPT prompted Alphabet to accelerate its AI efforts, leveraging its dominance in search.

Alphabet’s stock has surged over the past year, and hedge fund investors continue to buy it:

• Chris Hohn‘s TCI Fund Management bought 1.05 million shares in the first quarter. Hohn, who previously urged Alphabet to cut costs, seems pleased with the company’s recent efficiency measures, including layoffs in early 2023.
• Paul Tudor Jones‘s Tudor Investments added 229,696 shares. While still a relatively small part of Tudor’s portfolio, Jones is known for focusing on capital preservation.
• Jeremy Grantham‘s Grantham, Mayo, Van Otterloo & Company purchased 1.75 million shares, making Alphabet its second-largest holding after Microsoft, with a stake worth over $1 billion.

Conclusion

With their massive market presence and leadership in technology, Microsoft and Alphabet are top picks for billionaire investors. As AI continues to advance, these companies are likely to attract even more investment from the world’s wealthiest and most influential investors.