Many investors, including a significant number of very wealthy individuals and institutions, are becoming enthralled with AI stocks. According to Goldman Sachs (NYSE:GS), up to $200 billion could be poured into the technology by 2025. If Goldman’s estimate is anywhere close to correct, many AI stocks are going to rally tremendously. As always, emulating the purchases of billionaires is one effective means of determining which equities to buy in a sector. Let’s discuss three top AI stocks that billionaires buy.
Schrodinger (SDGR)
Schrodinger’s (NASDAQ:SDGR) platform uses AI and physics to speed up the drug discovery process.
Bill Gates, one of the world’s most famous billionaires, currently has a $350.76 million stake in Schrodinger. Additionally, multi-billionaire Warren Stephens’ Stephens Investment Management has a $35.4 million stake in SDGR based on his Q1 holdings.
Notably, Investor’s Business Daily gives SDGR a high A- Accumulation/Distribution, indicating high investor interest in the last 13 weeks. Some such institutions are owned by billionaires, while a number of others invest the funds of billionaires.
Schrodinger reported mixed Q2 results on August 2, as its revenue fell 8.5% versus the previous Q2 period. The company also came in $3 million below analysts’ average estimate, while it generated an earnings per share (EPS) 53 cents above the mean estimate. Further, SDGR cut its drug discovery revenue outlook to $50 million. However, it raised its software sales growth guidance to 15%-18%.
On the company’s Q2 earnings call there were discussions with 12 “global biopharma software customers about multi-year, multi-million dollar contracts.” It blamed the reduction in its drug discovery revenue guidance on “timing issues.”
Exscientia (EXAI)
Like Schrodinger, Exscientia (NASDAQ:EXAI) uses AI to speed up and enhance the drug discovery process.
Japanese investment company Softbank Group (OTCMKTS:SFTBY) recently acquired 5.7 million shares of EXAI in the first quarter, which are now worth $47 million. Multi-billionaire Masayoshi Son is Softbank Group’s largest shareholder. Additionally, the Bill and Melinda Gates Foundation has a stake worth $13.16 million. Finally, hedge fund Marshall Wace, led by billionaire Paul Marshal’s, stake in EXAI is worth $11.8 million.
Investor’s Business Daily gives SDGR stock a fairly high B+ Accumulation/Distribution rating, indicating that many institutional investors have been buying the shares in the last 13 weeks.
Super Micro Computer (SMCI)
Super Micro (NASDAQ:SMCI) markets servers are very well-suited for creating AI. One of its servers, for example, supports up to 10 next-gen accelerators, one of which produces AI.
Billionaire Alex Sacerdote’s hedge fund, Whale Rock Capital, raised its stake in SMCI by 42% in Q1. Its shares are now worth nearly $253 million. Multi-billionaire Jim Simons’ Renaissance Technologies raised its stake in SMCI by 22.7% in Q1 and the value of the shares is now nearly $223 million. Finally, hedge fund Marshall Wace bought 436,178 shares of SMCI in Q1, and the total value of the shares is now $150.3 million.
On July 20, SMCI issued an announcement saying that its top line last quarter would come in at $2.15 billion to $2.18 billion. Moreover, the firm reported that its EPS would be $3.35 to $3.45, versus analysts’ mean estimate of $2.21-$2.71.
Investor’s Business Daily gives SMCI stock a high Accumulation/Distribution rating of A-, indicating that many institutional investors have been buying the shares in the last 13 weeks.
On the date of publication, Larry Ramer was long SDGR and SMCI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
