Billionaire investor Chase Coleman is one of Wall Street's original geniuses. When he was just 24 years old, he founded Tiger His Global Management with funding from his former boss and mentor, iconic hedge fund manager Julian Robertson and his junior. did.
Coleman put $25 million of this seed money into one of the world's most successful hedge fund empires, with approximately $58 billion in assets under management. He is currently ranked 500th on the world's richest list. forbes Net worth is estimated at $5.7 billion.
Coleman is best known for identifying big winners early and making notable investments (among other things). spotify; Facebook, now meta platform (meta -2.21%); and LinkedIn currently owns microsoft (MSFT -0.61%).
He's no stranger to making bold bets, so it's no surprise that Coleman ended 2023 with a whopping 45.8% of Tiger Global Management's stock portfolio invested in just five artificial intelligence (AI) stocks. .
- Metaplatform: 18.8%
- Microsoft: 14.3%
- Amazon (AMZN -0.17%):5.3%
- alphabet (Google -1.58%) (GOOG -1.51%):Four%
- Nvidia (NVDA -0.06%):3.4%
To see why Coleman is so focused on these AI stocks, let's take a look at Coleman's top holdings.
Image source: Getty Images.
1. Metaplatform
Meta Platforms is Coleman's largest holding to date, which isn't surprising since he discovered the company when it was still Facebook.
When it comes to AI, Meta has a long track record of leveraging advanced algorithms to its advantage. The majority of revenue is generated through digital advertising, and AI can be used to show more relevant ads and relevant content to social media users.
2023 has been a banner year for the world's second-largest digital advertiser as ad spending continues to recover. Meta has fueled that growth by providing advertisers with a set of AI-powered tools that help improve results.
The company also pioneered generative AI by developing LLaMA (Large-Scale Language Model Meta AI), a top-of-the-line AI model available on all major cloud platforms, creating an entirely new revenue stream for Meta. I did. The social media company also announced its first-ever dividend.
Meta stock is selling for about 23 times forward earnings, making it cheap compared to the broader market, but this is likely factored into Coleman's investment decisions.
2.Microsoft
Microsoft surprised technology enthusiasts last year by investing $13 billion in ChatGPT creator OpenAI, highlighting potential applications for generative AI. Many big tech companies followed suit, starting an AI arms race.
Microsoft maximized its investment and quickly integrated AI capabilities across a wide range of its most popular productivity tools. The company further reinforced demand by offering its most popular AI models in the Azure cloud.
But one of the biggest opportunities lies with Microsoft Copilot, an AI-powered assistant suite. The ability of these tools to improve user productivity will create strong demand and could generate $100 billion in additional revenue by 2027, according to I/O Fund's Beth Kindig. Azure's growth in the fourth quarter outpaced its competitors, with Microsoft noting that 6 percentage points of its growth was due to increased demand for its AI services.
Microsoft currently trades at a forward price/earnings ratio of 35 times.it is Slight While at a premium to the broader market, the company's history of strong growth and further potential from AI make it a must-own AI stock, which likely gave Coleman even more incentive to buy.
3. Amazon
Amazon also has a long history of deploying AI algorithms to manage its e-commerce business, using AI to recommend products, manage inventory levels, schedule delivery routes, and more.
The company is also jumping on the generative AI bandwagon, using the technology to improve product descriptions, summarize reviews, and refine ads for sellers. Amazon will also offer customer-focused tools to answer questions about specific products.
Additionally, Amazon Web Services (AWS), as a leading cloud infrastructure provider, offers a vast list of popular generative AI models through Bedrock AI. The company is also working on several generations of AI processors (Inferentia and Trainium) to provide improved and lower-cost AI processing for cloud customers.
Despite its meteoric rise over the past year, Amazon's stock is selling for just twice its forward sales, a benchmark for undervalued stocks, which likely went unnoticed by Coleman.
4. Alphabet
Like its rival MetaPlatform, Alphabet derives the bulk of its revenue from its ad tech business, powered by Google searches. Alphabet has a long and distinguished history of using AI to improve search and targeted advertising results, and there is no doubt that a recovery in the digital advertising market will boost the company's fortunes.
Alphabet has been hard at work developing generative AI solutions that incorporate this next-generation functionality into a wide range of its namesake Google and Android products and services.
As a leading cloud infrastructure provider, the company is best positioned to sell AI solutions to cloud clients. Gemini AI, which recently debuted, was hailed by Google as the “largest and most capable AI model.”
Additionally, Alphabet's Vertex AI platform offers a growing suite of more than 130 basic AI models for customers to choose from.
One of the most interesting things about Alphabet stock is its price. Its P/E ratio is just 25 times, a discount to the broader market, and a valuation that Coleman probably couldn't pass up.
5. Nvidia
Nvidia is a leading company accelerating AI adoption. Its processor revolutionized the gaming industry, adapted to the rigors of AI, and has since become the gold standard.
The company's graphics processing units (GPUs) dominate the machine learning and data center markets, with an estimated 95% share in each market. For this reason, Nvidia was the obvious choice for him when the demand for generative AI increased.
While rivals are working hard to develop competing chips, Nvidia's pace of innovation makes it difficult to gain an edge. Further hampering these efforts is the company's heavy spending on research and development, which totaled $6.2 billion (16% of total revenue) in the nine months ended October 29. did.
Despite the triple-digit share price increase, Nvidia's stock remains incredibly cheap, with a price-to-earnings (PEG) ratio of less than 1, the standard for undervalued stocks, something Coleman is acutely aware of. There is no doubt that he did. .
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. Danny Vena has held positions at Alphabet, Amazon, Meta Platforms, Microsoft, and he has Nvidia. The Motley Fool has positions at and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Spotify Technology. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
