Forget Nvidia? Wall Street's Billionaires Have Their Eyes on This AI Stock

Everyone loves artificial-intelligence stocks—everyone except those who have missed out on the incredible run of Nvidia. But as the market broadens out, value investors and even growth investors might want to consider other AI stocks that are favored by Wall Street's billionaires. While Nvidia has been a standout performer, there are other AI stocks that offer compelling opportunities.

Nvidia, up 240% over the past year, is the third-largest holding in the iShares Russell 1000 Growth ETF, while Exxon Mobil, which occupies the same spot in the iShares Russell 1000 Value ETF, is up just 9.4%. However, signs are emerging that investors are rotating out of growth stocks and into value, and this rotation might be an opportunity to consider other AI stocks.



Wall Street's billionaires have been investing in AI stocks, and one of their favorites is Palantir Technologies (PLTR). Palantir has gained 380% so far in 2024, making it the highest-performing stock in the S&P 500. The company's meteoric rise is attributed to strategic partnerships with influential technology players, the launch of its Artificial Intelligence Platform (AIP) software suite, and steadily accelerating revenue across both the private and public sectors.



Palantir's valuation is high, with a forward P/E ratio of 170 and a PEG ratio over 3, indicating a high degree of valuation expansion. However, the company's fundamentals are strong, with widening profit margins and a transition to consistently positive net income. The high valuation and potential overvaluation should be taken into consideration, but Palantir's growth potential and the support of Wall Street's billionaires make it an attractive long-term investment opportunity.

Another AI stock favored by Wall Street's billionaires is Microsoft (MSFT). Microsoft has a strong presence in the AI market, with its Azure cloud platform and AI services. The company's AI offerings include Azure AI, which provides a range of AI services, and Azure Machine Learning, which enables developers to build, deploy, and manage machine learning models. Microsoft's AI capabilities are supported by its strong financial performance and market position, making it a compelling investment opportunity.



In conclusion, while Nvidia has been a standout performer in the AI market, there are other AI stocks that offer compelling opportunities. Palantir Technologies and Microsoft are favored by Wall Street's billionaires and have strong fundamentals and growth prospects. As the market broadens out, value investors and even growth investors might want to consider these AI stocks as alternatives to Nvidia. However, investors should carefully evaluate the risks and challenges associated with these stocks and make informed decisions based on their investment goals and risk tolerance.