Artificial Intelligence (AI) has the power to revolutionize our lives – at least if big tech is to be believed. Many products have already hit the market, like ChatGPT, and while they have made a splash, the true impact of the technology has yet to be felt. This promise of the future is generating incredible growth for companies involved in AI.
Top money managers are snapping up shares of these companies as they try to wring as much value as possible from tech’s explosive growth. Funds with more than $100 million in assets under management must report their transactions quarterly to the Securities and Exchange Commission on Form 13F. Luckily for us, it’s common knowledge.
Knowing where the “smart money” is flowing can help you make smart decisions, but it should only be part of your information gathering. It turns out that smart money isn’t always so smart – and besides, many managers are selling shares of the following five stocks.
1.Nvidia
Unsurprisingly, the company that made the most hedge fund purchases was Nvidia (NASDAQ:NVDA). It has captured the imagination of the investment world after positioning itself as the go-to chipmaker for all things AI.
Its revenue growth has been incredible, and all this while keeping costs relatively low. The chart below measuring its net profit growth over the past three years shows when AI took off.
Fund managers bought $15.9 billion worth of stocks last quarter. The largest purchases were $6.2 billion from Vanguard and $1.8 billion from Vanguard. black rock.
2. Amazon
One of my favorite pieces of AI, Amazon (NASDAQ:AMZN), runs the world’s largest cloud computing operation, Amazon Web Service (AWS), controlling more than 30% of the cloud market and investing heavily to maintain this share. It is partnering with Nvidia to equip its data centers with the latest and most powerful chips, and has invested $4 billion in OpenAI competitor Anthropic.
Fund managers bought $14.4 billion worth of stocks last quarter. The largest purchases were $2.5 billion (Vanguard) and $1.9 billion (BlackRock).
3.Microsoft
Another solid AI game, Microsoft (NASDAQ:MSFT), supports OpenAI, the creator of the most popular AI application, ChatGPT. When OpenAI released ChatGPT-3 to the public, it became the most rapidly adopted technology in history. For much of the public, ChatGPT, when it comes to AI knowledge, is unaware of Anthropic’s offer or offer. Alphabet‘s.
Microsoft is number 2 in the cloud and is gradually eating into AWS’ market share. Its partnership with OpenAI means Microsoft has the world’s most widely used AI application on its servers. And Microsoft also equips them with Nvidia chips.
Fund managers bought $13.1 billion worth of stocks last quarter. The largest purchases were $2.8 billion (BlackRock) and $1.3 billion from Geode Capital Management.
4. Apple
This one is different from the previous three. Apple (NASDAQ:AAPL) shares fell for much of last year as investors worried it was lagging behind in AI.
But the company finally jumped on board this month, unveiling Apple Intelligence, its cleverly named AI offering. Its products will have all sorts of AI enhancements (maybe now Siri will actually know what I’m asking it to do).
Crucially, the improvements will require too much computing power for many older products in Apple’s lineup, forcing users to upgrade to the newer (and more expensive) models. That will help boost the company’s sagging iPhone sales, a critical part of its bottom line.
Fund managers bought $11.8 billion worth of stocks last quarter. The largest purchases were $1.3 billion (Geode Capital) and $983.9 million by Lazard.
5. Broadcom
Like Nvidia, Broadcom (NASDAQ:AVGO) provides hardware to the AI industry. They don’t compete with each other, leaving Nvidia to dominate the main chip market. But one of the most crucial components of AI data centers is the one that allows all of those chips to talk to each other fairly quickly and seamlessly, and that’s where Broadcom comes in. Broadcom is a leading designer, manufacturer and supplier of semiconductor and infrastructure software products. Its product offerings serve the data center, networking, software, broadband, wireless, storage and industrial markets.
The company has also made key acquisitions that have generated immense growth, as shown in the revenue table below. (This also indicates an inflection point close to that in Nvidia’s chart above.)
Fund managers bought $11.8 billion worth of stocks last quarter. The largest purchases were $1.6 billion (Vanguard) and $1.5 billion from Jennison Associates.
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Suzanne Frey, an executive at Alphabet, 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. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Alphabet, Amazon, Apple, Microsoft and Nvidia. The Motley Fool recommends Broadcom 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.
Billionaires Just Invested About $67 Billion In These 5 Artificial Intelligence (AI) Stocks was originally published by The Motley Fool
