Billionaire investors have proven their stock-picking abilities, choosing companies that have helped them multiply their winnings over time. I’m talking about hedge fund leaders like Ken Griffin of Citadel, Jim Simons of Renaissance Technologies, and many others who have committed billions of dollars to technology stocks — stocks that have delivered fantastic returns over the long term and have led the S&P 500 higher in recent times too.
These billionaires are winning by identifying quality companies — in many cases operating in areas that touch our daily lives, like social media, for example — and holding for the long term. They also believe in diversifying their portfolios, an important move that limits losses if one particular technology or company disappoints.
Today, these top investors clearly are optimistic about technology companies moving forward. And four stocks in particular show up most frequently in the top 10 tech holdings of 16 hedge funds analyzed by The Motley Fool. The good news is, you don’t have to be a billionaire to invest like a billionaire and potentially win big over the long term. Let’s take a closer look at the four billionaire-approved tech stocks to consider right now.
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1. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is an example of a company linked to our daily routines. It’s the parent of Google Search, the world’s most popular search engine, holding more than 90% of the market.
Though Alphabet also sells devices and cloud services, Google Search is the company’s crown jewel, with advertising on the platform bringing in the lion’s share of revenue. This is likely to continue thanks to the search engine’s current strength and the efforts Alphabet is making to keep it ahead of the pack.
The company is investing in artificial intelligence (AI), a technology that should boost revenue opportunities across its products in services. AI is making search better and helping Alphabet offer new services to cloud customers, for example.
Alphabet has a long track record of earnings momentum, and this is far from over, with estimates calling for double-digit annual growth over the coming five years.
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2. Meta Platforms
Meta Platforms (NASDAQ: META) represents another company that most of us use daily. Parent of social media apps Facebook, Messenger, WhatsApp, and Instagram, the company says more than 3 billion people use at least one of these platforms daily. Like Alphabet, Meta relies on advertising across these platforms for most of its revenue.
And here, too, we should be optimistic about advertising revenue growth over time. That’s because Meta is working to keep users coming back to its apps by making them better and better — through AI. The company recently launched Meta AI, its conversational assistant, in more than a dozen countries across its apps. Meta has developed its own large language model, Llama, to power Meta AI and its other eventual AI products.
Meanwhile, Meta has not only proven its ability to grow earnings, but it’s also showing it can reward investors at the same time: Earlier this year, it announced its first dividend.
3. Nvidia
Nvidia (NASDAQ: NVDA) is another tech company growing thanks to AI. That’s because Nvidia actually is powering AI through its graphics processing units (GPUs). Once known primarily for use in video games, the GPU now is the engine used to fuel AI training and inference, the key steps that allow AI models to then answer complex questions.
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Nvidia’s chips dominate the market, holding more than 80% share, and the company’s focus on research and development mean this is likely to continue. The chip giant recently announced the upcoming arrival of its Blackwell architecture, along with its most powerful chip ever.
Though cost-conscious customers who don’t necessarily need the highest performance may opt for rival chips, Nvidia has what it takes to hold on to share in the premium chip market.
Thanks to enormous demand in recent years, Nvidia’s earnings have exploded — climbing in the triple digits in the most recent quarter — and this financial strength should support ongoing innovation.
4. Microsoft
Microsoft (NASDAQ: MSFT) has delivered a strong track record of growth in earnings and smart investments over time — note the increase in return on invested capital.
The company sells software that we all know well and also is the world’s second-biggest cloud computing services provider after Amazon. And while Amazon’s worldwide cloud market share has declined from its peak, Microsoft’s share gradually has climbed.
Microsoft also is setting itself up for a potential win in the high-growth area of AI. The company was an early adopter of the technology, investing in OpenAI — creator of chatbot ChatGPT — back in 2019 and then increasing its stake.
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Today, Microsoft offers a variety of AI products and services for businesses through its Azure portfolio, and the company has expanded its Copilot AI companion revenue opportunity too — by introducing a premium service for individuals and rolling Copilot out to businesses of any size.
So investors can count on Microsoft’s ongoing software and cloud strength — with the addition of AI that may supercharge growth down the road.
Should you invest $1,000 in Alphabet right now?
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