Following the stock picks of billionaire investors can help you find profitable investments over the long term. These investors typically conduct in-depth research on companies that are not accessible to small investors.
Chase Coleman of Tiger Global Management and Daniel Loeb of Third Point are two billionaire money managers with a long track record of growing their assets safely. Here are two of their top stocks to buy right now.
1. Chase Coleman, Tiger Global Management: Nvidia
Chase Coleman founded Tiger Global Management in 2001 and today has an estimated net worth of more than $5 billion, according to Forbes. Tiger Global has an impressive track record of delivering market-beating returns for its clients over the past two decades, and one of its largest positions in the first quarter was Nvidia (NASDAQ: NVDA) — one of the best-performing S&P 500 stocks in recent months.
Companies buy as much graphics processing units (GPUs) because they can get their hands on it to train artificial intelligence (AI) models. Meta-platforms Nvidia plans to have 350,000 of Nvidia’s H100 chips in its computing infrastructure by the end of the year. These powerful chips are in short supply due to high demand, and Nvidia expects that situation to continue.
The central processing units (CPUs) that have powered data centers for years are being supplanted by more powerful GPUs, driving unprecedented growth for Nvidia’s data center business. Nvidia has a long history of growth and above-average returns for shareholders, but its current growth is off the charts, with revenue up 262% year over year in its most recent quarter.
The company won’t continue to triple its revenue every year, but investors who hold the stock patiently over the next few years should see healthy returns. Nvidia will continue to innovate with new AI products and solutions to drive long-term growth.
Earlier this year, Nvidia announced its new Blackwell computing platform that will enable leading cloud service providers to take data processing to the next level. The company expects demand for Blackwell and the new H200 data center GPU to outstrip supply in the near term.
Nvidia expects revenue of about $28 billion for its fiscal second quarter, up 107% from a year earlier. That level of demand makes the stock a no-brainer.
2. Daniel Loeb, Third Point: Semiconductor Manufacturing in Taiwan
Daniel Loeb is the founder of Third Point and has an estimated net worth of over $3 billion, according to Forbes. With the demand for AI chips on the rise, it’s no surprise to see another top chip company in a billionaire’s portfolio. Third Point held a significant stake in the leading chipmaker Semiconductor Manufacturing in Taiwan (NYSE: TSM) at the end of the first quarter.
Taiwan Semiconductor leads the industry with over 60% of the global foundry market share by 2023. As a foundry, it manufactures semiconductor products for other companies. All major chipmakers, including Nvidia, have relationships with TSMC, which puts the company in a strong competitive position.
TSMC’s revenue grew 12.5% ​​year-on-year in the first quarter in U.S. dollar terms, driven primarily by demand for high-performance chips. But growth is expected to accelerate in the near term as some of the company’s end markets are still recovering, including smartphones, which account for 38% of TSMC’s business.
Management expects second-quarter revenue to be between $19.6 billion and $20.4 billion, up 27% from a year earlier, at the midpoint of its forecast. TSMC is working to expand its U.S. manufacturing capacity, reflecting a favorable outlook for chip demand.
TSMC has a long history of delivering exceptional returns to shareholders, and its profitable business model has fueled a growing dividend for shareholders since 2004. It’s a relatively safe stock to ride the wave of AI chip demand over the next decade.
Should You Invest $1,000 in Nvidia Right Now?
Before you buy Nvidia stock, consider this:
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Randi Zuckerberg, former head of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Ballard has positions in Meta Platforms and Nvidia. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
2 Billionaire-Owned Stocks to Buy Right Now was originally published by The Motley Fool
