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Billionaire philanthropist Paul Tudor Jones is an iconic Wall Street figure and has been called “one of the pioneers of the modern hedge fund industry.” He runs his hedge fund, Tudor His Investments, which he founded in 1980.
His greatest claim to fame was predicting Black Monday, the famous stock market crash of 1987. Less than a year after his comments, the market plunged more than 22%, the worst single-day decline since the stock market crash of 1929. Shorted the market and his hedge fund earned his 200% profit. So when Jones speaks, Wall Street listens.
The billionaire investor has been very vocal about the vast potential of artificial intelligence (AI). “I do think there will be a large-scale introduction of language models. [and] “Artificial intelligence is going to create a productivity boom that we’ve only seen a few times in the last 75 years,” Jones said.
The Magnificent Seven stocks all have AI in their DNA, so it’s no surprise that some of these market leaders are among Tudor’s core holdings. But interestingly, Jones just downsized that position. microsoft (MSFT -1.14%), reducing stock by 56%. Here are the AI-focused Magnificent Seven stocks he bought on his behalf.
Image source: Getty Images.
1. Nvidia
No discussion of AI stocks would be complete without it. Nvidia (NVDA 1.75%), so it’s no surprise that Tudor has risen to prominence among chipmakers. In the fourth quarter, Tudor Investments raised its stake in Nvidia by 810%, increasing its holdings to 132,000 shares worth about $121 million (as of Thursday’s close). This puts Nvidia in third place, representing about 1% of the portfolio.
The chipmaker pioneered graphics processing units (GPUs), which have become the gold standard for processing AI applications. Nvidia dominates both the nascent field of AI, machine learning, and data centers, where much of the AI processing takes place, with an estimated 95% market share in each. His Nvidia’s long history of supporting AI makes it a powerful vehicle to address the growing demand for generative AI.
Competitors were already racing to develop competing processors, but Nvidia solidified its lead last week with the release of its Blackwell architecture. Its flagship AI processor, his GB200 Grace Blackwell superchip, connects two of his B200 Tensor Core GPUs to a Grace CPU on a single board, working as one giant processor. Big tech companies are already lining up to get their hands on the chip.
Nvidia reported record 265% year-over-year revenue growth and 486% earnings per share (EPS) growth in Q4 2024 (ended January 28), driven by accelerating demand for AI processors Did. Moreover, given the company’s heavy spending on research and development (R&D) and track record of innovation, it will be difficult for rivals to establish itself.
Despite the recent stock price rally, NVIDIA remains reasonably priced relative to its opportunity. The company’s stock is currently selling for 36 times forward earnings, which is impressive considering its triple-digit growth, and Jones probably didn’t forget this fact.
2. Metaplatform
meta platform (meta -0.81%) While it may not seem like the most obvious choice in the AI space, the company has a long history of using AI to further its business goals.
In the fourth quarter, Tudor Investments more than doubled its holdings in Meta Platforms, increasing its holdings to approximately 102,000 shares worth approximately $52 million (as of Thursday’s market close). This puts the Meta platform in the top 15, representing about 0.5% of the portfolio.
One interesting development over the past year or so has been Meta’s foray into large-scale language models. The company has developed LLaMA (Large Language Model Meta AI), one of the leading open source AI models. It is available on all major cloud platforms and opens up an entirely new revenue stream for the company.
Meta recently announced that it is building an AI system that will significantly improve video recommendations. According to Facebook head Tom Allison, Reels testing resulted in “an 8% to 10% increase in Reels watch time,” which means the new AI model is “significantly higher than the previous generation.” This shows that the system is learning from data efficiently.
The company has also introduced a suite of AI-powered tools to simplify the digital advertising process for advertisers on the platform and help them reach their target markets. This will ultimately strengthen Meta’s fortunes, as the company derives the majority of its revenue from digital advertising.
At just 25x forward earnings, the meta. S&P500is valued at 28, which may have been factored into Tudor’s decision.
Smart move?
While I fully support Tudor increasing its stake in NVIDIA and Metaplatform, I have to admit that I am completely baffled by the decision to cut its stake in Microsoft in half. do not have. The company has multiple ways to leverage his AI revolution.
First, the company’s AI-powered Copilots suite continues to grow, with the potential to generate tens or even hundreds of billions of dollars in incremental revenue. The second is the fact that Microsoft Azure is stealing market share from its cloud rivals thanks to its AI efforts. In my opinion, these factors make Microsoft a buy rather than a sell.
I think Mr. Jones made a mistake in cutting back on Microsoft stock, but only time will tell.
Randi Zuckerberg is a former Facebook head of market development and spokesperson, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Danny Vena has held positions at Metaplatform, Microsoft, and his Nvidia. The Motley Fool has positions in and recommends Meta Platform, Microsoft, and Nvidia. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
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