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Billionaire hedge fund manager Daniel Loeb of Third Point Management was busy making adjustments to his portfolio in Q1, trimming some positions while adding new ones.
Among the stocks he bought during the period were three of my favoriteartificial intelligence (AI) stocks, and they're still attractive buys right now.
It has been a couple of years since Loeb had a stake inAlphabet(NASDAQ: GOOGL)(NASDAQ: GOOG), but he opened a new one in Q1, and it's easy to see what he may like about the stock.
While it's best known for Google Search, Alphabet is the most complete AI company, having developed both top-tier AI chips and models.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.Continue » The company's biggest edge is arguably its Tensor Processing Units (TPUs), custom chips it began developing more than a decade ago, and which it optimized its entire ecosystem around.
TPUs give it a big cost advantage when training its AI models and runninginferenceworkloads.
They are also becoming a big new revenue source for Alphabet, as it is leasing them to Google Cloud clients and also sells them directly to select customers.
By having its own AI models, it also saves costs within its cloud computing unit by not always having to pay for third-party LLMs, although it also offers models other than its own.
It also uses its Gemini models to power the AI features across Google Search and other products, which has been driving growth.
Additionally, Alphabet has a big distribution edge (through its ownership of Chrome, Android, and its revenue-sharing deal withApple) and one of the world's largest digital ad networks.
Add it all up, and this is a stock poised to be a long-term winner.
During the first quarter, Loeb also reopened a position inMeta Platforms(NASDAQ: META).
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