Following the stock selections of billionaire investors can help you find rewarding investments for the long haul. These investors typically conduct in-depth research on the companies not available to a small investor.
Chase Coleman of Tiger Global Management and Daniel Loeb of Third Point are two billionaire fund managers who have a long record of safely growing their assets. Here are two of their top stock holdings 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 over $5 billion, according to Forbes. Tiger Global has an impressive record of earning market-beating returns for clients over the last 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.
Enterprises are buying as many graphics processing units (GPUs) as they can get their hands on for training artificial intelligence (AI) models. Meta Platforms plans to have 350,000 of Nvidia’s H100 chips in its computer infrastructure by the end of the year. These powerful chips have been in short supply due to high demand, and Nvidia expects this situation to continue.
The central processing units (CPUs) that powered data centers for years are being supplanted by more powerful GPUs, which is driving unprecedented growth for Nvidia’s data center business. Nvidia has a long history of delivering above-average growth and returns to shareholders, but its current growth is off the charts, with revenue jumping 262% year over year in the most recent quarter.
The company won’t continue to see its revenue triple every year, but investors who can patiently hold the stock over the next several years should see satisfactory returns. Nvidia will continue to innovate with new products and AI solutions to drive long-term growth.
Earlier this year, Nvidia announced its new Blackwell computing platform that will allow the leading cloud service providers to take data processing to another level. It expects demand for Blackwell and the new H200 data center GPU to outstrip supply in the near term.
Nvidia expects its fiscal second-quarter revenue to be approximately $28 billion, representing a 107% year-over-year increase. This level of demand makes the stock a no-brainer investment.
2. Daniel Loeb, Third Point: Taiwan Semiconductor Manufacturing
Daniel Loeb is the founder of Third Point and has an estimated net worth of over $3 billion, according to Forbes. With the growing demand for AI chips, it’s no surprise to see another top chip company in a billionaire’s portfolio. Third Point held a sizable stake in the leading chip manufacturer Taiwan Semiconductor Manufacturing (NYSE: TSM) at the end of the first quarter.
Taiwan Semiconductor dominates the industry with over 60% of the global foundry market in 2023. As a foundry, it makes semiconductor products for other companies. All the leading chip companies, including Nvidia, have relationships with TSMC, which puts the company in a strong competitive position.
TSMC’s revenue grew 12.5% year over year in the first quarter in U.S. dollars, primarily driven by demand for high-performance chips. But growth should accelerate in the near term, as some of the company’s end markets are still in recovery, including smartphones, which account for 38% of TSMC’s business.
Management expects second-quarter revenue to come in between $19.6 billion to $20.4 billion, or increase by 27% year over year at the midpoint of guidance. TSMC is working to expand its manufacturing capacity in the U.S., which reflects a favorable outlook for chip demand.
TSMC has a long history of delivering outstanding returns to shareholders, and its profitable business model fueled a growing dividend to 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?
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to 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 No-Brainer Billionaire-Owned Stocks to Buy Right Now was originally published by The Motley Fool
