With Nvidia’s meteoric rise amid the artificial intelligence (AI) boom, many investors are wondering if it’s time to take profits. Some of the world’s top hedge fund managers are already making moves, cutting back their Nvidia stakes and shifting capital into other AI-driven opportunities. Surprisingly, they’re betting big on a few resilient stocks that are well-positioned to benefit from the continued AI revolution. Let’s dive into three of these supercharged picks and why they’re catching the attention of some of the most successful investors.
CrowdStrike (NASDAQ: CRWD) Cybersecurity in the Age of AI
CrowdStrike might not seem like an obvious AI play at first, but its services are essential in the increasingly digital and AI-driven world. As businesses rely more heavily on cloud infrastructure and artificial intelligence, the need for robust cybersecurity solutions only grows. CrowdStrike, a leader in endpoint security and threat detection, plays a critical role in this ecosystem.
During the brief COVID-19 recession in 2020, CrowdStrike’s revenue growth accelerated as companies scrambled to protect their networks and data amid the shift to remote work. Fast forward to today, and the demand for its services is stronger than ever. Despite facing challenges like a recent software update glitch that caused IT outages, CrowdStrike quickly implemented strategies to retain customers and minimize the impact, forecasting only a $60 million revenue headwind out of its $3.9 billion in annual recurring revenue.
CrowdStrike’s ability to weather multiple economic disruptions and maintain robust growth makes it a standout AI play. With AI-driven cybersecurity becoming a necessity, this stock is well-positioned to continue growing even in tough economic environments.
Microsoft (NASDAQ: MSFT) A Recession-Proof Powerhouse with AI Upside
Microsoft has long been one of the most reliable tech companies, with a track record that shows resilience even during recessions. During the 2007–2009 financial crisis, Microsoft’s revenue and profitability remained strong. In fact, it actually grew its sales during most quarters of the downturn, highlighting its ability to adapt and innovate even when the broader economy is struggling.
Fast forward to today, Microsoft has evolved far beyond its origins in PC software. Now a leader in cloud computing with Azure, it’s also integrating AI capabilities across its platforms, including its flagship product Microsoft 365 and even its gaming division with AI-powered tools. This diversification, combined with its strategic AI investments, has allowed Microsoft to capitalize on the AI revolution without being overly dependent on any one segment.
Given Microsoft’s proven ability to thrive during uncertain times and its leadership in AI, it’s easy to see why fund managers are flocking to this stock. Billionaire investors are betting on Microsoft’s long-term growth potential as AI transforms industries globally.
Invesco QQQ Trust (NASDAQ: QQQ) Diversifying AI Exposure Through a Tech-Focused Index
While Nvidia has been a top AI play, billionaire investors like Ken Griffin and Israel Englander are shifting capital into the Invesco QQQ Trust (QQQ), which offers exposure to a broad range of tech stocks that are also benefiting from the AI boom. The QQQ tracks the Nasdaq-100 index, which is heavily weighted toward technology companies that are leveraging AI to drive future growth.
These billionaires aren’t completely abandoning Nvidia, but they are diversifying by reallocating significant capital into the QQQ. This move provides exposure to not only Nvidia but also other AI-driven companies like Microsoft, Alphabet, and Amazon, all of which are core holdings within the index. For investors looking to gain broad exposure to AI technology without the risks of holding individual stocks, QQQ presents an excellent option.
In fact, during the second quarter of 2023, billionaire hedge fund managers Cliff Asness, Steven Cohen, and Ken Griffin each made substantial increases to their QQQ positions—some by over 500%. Their decision reflects a strategic approach to capitalize on AI’s long-term potential while spreading out risk across multiple high-growth tech companies.
