Nvidia’s shares surged Thursday after it issued a sales forecast that dwarfed Wall Street’s expectations.
The chipmaker’s stock has gained a staggering 160% within the first five months of this year.
Longtime rival Intel is up just 4% over the same period.
Big-name investors are going all-in on AI
Some of the best-known names in investing are betting big on artificial intelligence stocks.
Bill Ackman recently revealed a $1 billion bet on Google parent Alphabet, while Stanley Druckenmiller pumped a combined $430 million into Microsoft and Nvidia.
Tiger Global founder Chase Coleman, billionaire trader Paul Tudor Jones, and Ark Invest CIO Cathie Wood are all bullish on AI.
Some of the biggest names in investing are piling into artificial intelligence, the theme that has taken markets by storm in 2023.
Billionaire investors including Bill Ackman, Stanley Druckenmiller and David Tepper are betting big on firms at the forefront of the AI race – such as Microsoft, Alphabet and chipmaker Nvidia.
Here’s how seven top players are responding to the AI trend:
1. Bill Ackman
Ackman’s hedge fund revealed Monday that it had plowed over $1 billion into Alphabet in a quarter where the tech giant significantly ramped up its AI efforts.
Pershing Square Capital Management snapped up more than 10 million shares in Google’s parent company – buying about 2.2 million Class A shares and 8.1 million Class C shares, according to a Securities and Exchange Commission filing.
Hedge fund billionaire Coleman said last month that mega-cap stocks like Amazon now look like a good bet again after a brutal 2022, thanks to the rise of AI.
The Tiger Global founder told investors to buy the so-called FAANG stocks – shorthand for Facebook parent Meta, Apple, Amazon, Netflix, and Alphabet – and cited Amazon sellers’ use of ChatGPT to write product listings as an example of how AI was already boosting Big Tech.
3. Stanley Druckenmiller
Druckenmiller loaded up on Nvidia shares and made a new investment in Microsoft last quarter, snapping up two of the best-performing stocks of 2023.
The billionaire investor’s Duquesne Family Office bought a $220 million stake in Nvidia and upped its Microsoft position by $210 million, according to its latest 13F filing, released Monday.
Nvidia, the world’s No. 1 producer of graphics chips needed for high-intensity AI computing, has seen its share price double this year. Microsoft, which was an early investor in OpenAI and has integrated ChatGPT technology into its search engine Bing, is up 30%.
4. Paul Tudor Jones
Large language AI models like ChatGPT will have a massive impact on both the economy and the stock market, according to billionaire investor Jones.
He said Monday that the tool had completely shifted his outlook on both inflation and equities – and he’s now bracing for an AI-fueled “productivity boom” that drags down soaring prices and pushes up stock valuations.
“The introduction of large language models [and] artificial intelligence is going to create a productivity boom that we’ve only seen a few times in the last 75 years,” Jones told CNBC.
5. Morgan Stanley
It’s not just individual investors who are caught up in the AI fanfare.
In a research note last month, Morgan Stanley said that 2023 would be a breakthrough year for the technology, which it believes represents a $6 trillion investment opportunity.
“We see AI accelerating digital transformation and tech diffusion across the economy,” internet analyst Brian Nowak said in the note.
6. David Tepper
Like Ackman and Druckenmiller, the owner of the NFL’s Carolina Panthers made some big bets on AI over the past quarter.
Tepper’s family office Appaloosa Management bought 150,000 Nvidia shares worth around $42 million and 500,000 shares in Cathie Wood’s ARK Innovation ETF, which specializes in investing in disruptive tech.
Wood’s fund plunged last year but is up just under 24% in 2023 thanks to tech stocks’ massive rebound.
7. Cathie Wood
The Ark Invest CIO has never been one to miss out on a disruptive technological trend – and she’s been heralding AI’s potential long before ChatGPT’s explosion in popularity earlier this year.
Nvidia‘s AI-fueled share-price surge has left its longtime rival Intel in the dust.
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The California-based chipmaker’s stock soared 24% on Thursday after it issued a second-quarter sales forecast that crushed Wall Street’s expectations. Investors piled in, betting the company would benefit from the current AI boom.
Nvidia’s shares are now up 160% in 2023, making it comfortably the best performer in the benchmark S&P 500 year-to-date.
Other AI-related stocks also surged on the back of Nvidia’s stellar results – but Intel fell 5.5%, slashing its gains for the year to below 4%.
The two companies have also diverged in terms of market capitalization.
Nvidia’s total market value has soared from $364 billion to $939 billion in 2023, according to data from CompaniesMarketCap – whereas Intel’s has only climbed from $109 billion to $114 billion in the same period.
AI appears to be responsible for the longtime rivals’ mixed fortunes.
Nvidia is the leading producer of the graphics chips needed for high-intensity AI computing, meaning it was well-positioned when the rise of ChatGPT created an “iPhone of AI” moment, CEO Jensen Huang said recently.
In contrast, Intel’s semiconductors tend to be used in data centers – which many have warned could be rendered obsolete by the rise of generative AI.
By not matching its rival’s AI efforts, Intel has “missed the boat, which has hit stock performance and valuation and growth potential,” ROBO Global analyst Zeno Mercer told Bloomberg.
