Billionaires Are Buying These 2 Monster AI Stocks Shaping the Future of Technology

Key Points

• Nvidia’s explosive financial growth, driven by the rapid adoption of its AI hardware and software solutions, makes it an exceptional long-term buy-and-hold pick.

• Alphabet’s AI-infused product portfolio, strong financials, and billionaire backing make it a stock investors can buy and hold with confidence.

• 10 stocks we like better than Nvidia ›

Investing in artificial intelligence (AI) companies that are building the required infrastructure for the next-generation technological transformation can be a brilliant long-term strategy for retail investors. Precedence Research estimates the global AI market will grow from $757.6 billion in 2025 to $3.7 trillion in 2034. Many billionaire investors are already capitalizing on this massive growth trajectory by building sizable positions in the leading AI stocks.

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Nvidia (NASDAQ: NVDA) and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) are among the top AI leaders attracting strong interest from billionaire investors, making them equally brilliant picks for long-term retail investors. Here's why.

1. Nvidia

Several billionaire investors bought Nvidia's shares in the second quarter of calendar year 2025. David Tepper's Appaloosa added 1.45 million shares, increasing its stake by a massive 483% from the previous quarter. Dan Loeb's Third Point increased Nvidia's stake by 1.35 million shares worth $285 million. Prominent hedge funds such as Tiger Global Management led by Chase Coleman, SRS Investment Management led by Karthik Sarma, and Coatue Management led by Philippe Laffont, also invested heavily in Nvidia shares in the second quarter. These significant moves highlight strong confidence in Nvidia's growth potential among some of Wall Street's most successful hedge fund managers.

Nvidia's business continues to fire on all cylinders. The company reported record revenues of $46.7 billion, a 56% year-over-year jump, in the second quarter of fiscal 2026 (ended July 27, 2025), with data center sales remaining the key growth catalyst. The new Blackwell-based AI infrastructure systems, such as the GB200 NVL System and GB300 System, are being rapidly adopted by cloud providers and enterprises, including OpenAI, Meta Platforms, and Microsoft. These Blackwell architecture systems are far more power-efficient than earlier Hopper architecture ones -- a crucial differentiator as data centers struggle with rising energy costs.

Nvidia's networking business is also picking up momentum. In the second quarter, networking revenues from the sale of products like Spectrum-X Ethernet, InfiniBand, and NVLink soared 98% year over year to $7.3 billion. Networking has now become a $10 billion-plus annual business and will continue to grow as demand for high efficiency and low latency networking in large AI compute clusters proliferates. More than 5 million developers and 40,000 companies use Nvidia's proprietary Compute Unified Device Architecture (CUDA) software stack to program AI workloads running on the company's hardware. The software ecosystem has created a sticky customer base.

The company still faces risks, including U.S. restrictions on the sale of GPUs to China. While management has excluded China-related H20 revenues from third-quarter guidance, the company is still pursuing regulatory approvals. Nvidia estimates the Chinese AI market opportunity to be worth $50 billion by 2025, expecting it to grow at a 50% annual rate.

At about 39.5 times forward earnings, Nvidia stock isn't cheap. But investors are paying for a company with unmatched technology, a sticky software ecosystem, and explosive demand for its products.

With billionaire investors buying in and AI spending set to surge, Nvidia remains a substantial long-term investment.

2. Alphabet

Many billionaire investors have also bought significant stakes in Alphabet stock in the second quarter of 2025. Prominent among them is Bridgewater Associates, led by Ray Dalio, which added 2.56 million shares and increased its position by 84%. Tiger Global Management, led by Chase Coleman, increased its stake in Alphabet by 3.1%. Pershing Square Capital Management, led by Bill Ackman, also raised its position by 20.8% in Alphabet stock. Subsequently, these billionaire investors have signaled conviction in Alphabet's AI and cloud growth trajectory.

Alphabet's second-quarter fiscal 2025 (ending June 30) performance appears to have reaffirmed this confidence. Revenues grew 14% year over year to $96.4 billion, while net income jumped 19% year-over-year to $28.2 billion. The company demonstrated strength across all of its business lines, including Search, YouTube, and Google Cloud.

Alphabet's strategy of integrating advanced AI capabilities in its core offerings dramatically improved user engagement. Search features such as AI Mode and AI Overviews are rapidly gaining traction. AI Mode already reached 100 million monthly users in the U.S. and India, while over 2 billion monthly users use AI Overviews in more than 200 countries and 40 languages. Alphabet's Gemini app surpassed 450 million monthly active users. The increasing user engagement is translating into improved monetization. Google Search delivered double-digit revenue growth in the second quarter, despite increasing competition from generative AI-powered chatbots. YouTube Shorts is also earning similar revenue per watch hour as compared to traditional YouTube channels, while subscriptions have further diversified the revenue base.

Google Cloud is also a significant growth catalyst, and accounted for a 13% share of the global cloud infrastructure services market in the second quarter -- up from 12% in the previous quarter. It reached an annual run rate of over $50 billion at the end of the second quarter. Google Cloud backlog increased 38% year over year to $106 billion, reflecting rising demand for Alphabet's AI infrastructure, including the broadest range of TPUs, GPUs, storage, and software systems. The company is also working to increase cloud capacity and plans to invest approximately $85 billion in capital investments in fiscal 2025 to accelerate data center and server build-outs.

Alphabet is currently trading at 21.4 times forward earnings, lower than the forward price-to-earnings ratio of 22.9 of the benchmark S&P 500 index. Hence, considering the company's robust Search business, profitable and scaling cloud franchise, increasing AI adoption, strong financials, and reasonable valuation, this billionaire pick seems like a sensible buy-and-hold for long-term investors.

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Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.