With the latest round of Form 13-Fs being available, investors can track what the smart money was doing during Q2. Among the most popular buys during the quarter were Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Taiwan Semiconductor (NYSE: TSM). All three of these stocks were ones that I was already bullish on, but after seeing the smart money load up on shares, I’m even more confident in my AI picks.
This trio is a smart and fairly safe way to invest in the AI buildout, and even though they’ve performed strongly over the past few years, now is still a great time to buy.
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Amazon
Amazon was among the most popular stocks to purchase during Q2. Several billionaire-run hedge funds loaded up on shares, including Peter Thiel’s fund, David Tepper’s Appaloosa Management, Philippe Laffont at Coatue Management, and Stanley Druckenmiller at Duquesne Capital, to name a few. Those are a lot of firms loading up on Amazon’s shares, and it’s easy to see why.
Although they didn’t know what Amazon was going to report in Q2, they knew that Amazon’s major data center capital expenditure investments would soon start paying off. That fully emerged in Q2, when Amazon reported 37% year-over-year growth in Amazon Web Services (AWS).
Its legacy commerce divisions also posted solid results, with North American sales rising 16% and International revenue increasing by 15%. Overall, this was one of Amazon’s best growth quarters in a long time, and these funds saw the writing on the wall and purchased shares before Amazon reported.
These trends are still prevalent, and Amazon’s future results are likely to be strong as well. That makes it a great stock to consider buying now, and I’m confident Amazon will be a top performer to end the year.
Alphabet
Alphabet was another popular stock pick, with some of the same firms that bought Amazon stock also loading up on Alphabet. A lot of the same themes prevalent in the Amazon investment echo in Alphabet, as its base business is doing quite well but its cloud computing segment is also doing fantastic, mostly thanks to the increased computing capacity that has popped up from major capital investments.
The company’s Google Cloud revenue soared 82% in the second quarter — a trend that will likely persist over the next few years. This helped drive Alphabet to one of its highest quarterly growth rates in the past decade.
