Billionaire Daniel Loeb Was Buying 3 of My Favorite AI Stocks in Q1. Here's Why It's Not Too Late to Buy Them.
Written by Geoffrey Seiler for The Motley Fool -> As the most complete AI company, Alphabet looks well positioned to be a long-term winner. Meta Platforms has been one of the best companies at using AI to drive revenue growth. While its stock slid after its recent quarterly re
As the most complete AI company, Alphabet looks well positioned to be a long-term winner.
Meta Platforms has been one of the best companies at using AI to drive revenue growth.
While its stock slid after its recent quarterly report, Broadcom still has huge potential to grow its custom chip design business.
Billionaire hedge fund manager Daniel Loeb of Third Point Management was busy making adjustments to his portfolio in Q1, trimming some positions while adding new ones. Among the stocks he bought during the period were three of my favorite artificial intelligence (AI) stocks , and they're still attractive buys right now.
It has been a couple of years since Loeb had a stake in Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) , but he opened a new one in Q1, and it's easy to see what he may like about the stock. While it's best known for Google Search, Alphabet is the most complete AI company, having developed both top-tier AI chips and models.
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The company's biggest edge is arguably its Tensor Processing Units (TPUs), custom chips it began developing more than a decade ago, and which it optimized its entire ecosystem around. TPUs give it a big cost advantage when training its AI models and running inference workloads. They are also becoming a big new revenue source for Alphabet, as it is leasing them to Google Cloud clients and also sells them directly to select customers.
By having its own AI models, it also saves costs within its cloud computing unit by not always having to pay for third-party LLMs, although it also offers models other than its own. It also uses its Gemini models to power the AI features across Google Search and other products, which has been driving growth. Additionally, Alphabet has a big distribution edge (through its ownership of Chrome, Android, and its revenue-sharing deal with Apple ) and one of the world's largest digital ad networks.
