In this article, we will take a look at the 15 stocks billionaire Ray Dalio’s Bridgewater is crazy about.
Ray Dalio, a seasoned global macro investor with over 50 years of experience, founded Bridgewater Associates from his two-bedroom apartment in New York City and led the firm for most of its 47-year history. Over the years, Dalio has been regarded as one of the most influential investors, renowned for accurately predicting major financial trends, including the 2008 financial crisis. TIME magazine recognized him as one of the “100 Most Influential People in the World” for the significant impact of his insights on global macroeconomic policies.
Bridgewater Associates has since become one of the world’s largest and most successful hedge funds. Known for its innovative use of macroeconomic analysis to shape investment strategies, particularly in global markets, the firm introduced groundbreaking approaches like the “Pure Alpha” strategy. These methods, designed to perform consistently across varying economic conditions, solidified Dalio’s reputation as a visionary in asset management.
Ray Dalio’s China Bet
Ray Dalio began investing in China in 2023, allocating approximately $3 billion to the market. He has previously suggested that a significant economic restructuring might be necessary to support China’s economy. One of the key challenges is the country’s struggling property sector, where declining prices and developer defaults have heightened economic risks. Speaking at the 2024 Milken Institute Asia Summit in Singapore, Dalio compared the situation to Japan’s economic stagnation beginning in 1990. “They need to have a restructuring of the debt. It’s a very complicated and politically charged thing,” he remarked.
Despite these challenges, Dalio highlights the immense potential of the world’s second-largest economy, home to the largest and rapidly growing middle class. Millions of Chinese citizens enter the middle class each year, and if the government can successfully restructure debt in critical sectors like housing, China’s long-term growth prospects remain significant. While the country’s debt-to-GDP ratio has nearly tripled over the past decade—fueling skepticism as sectors like real estate struggle under mounting debt payments—Dalio envisions a “beautiful deleveraging” process. Having coined the term after the 2008 crisis, the billionaire believes this approach could make holding cash in banks unattractive, encouraging investment and economic revitalization. Although concerns about China’s debt burden persist, it’s notable that the country has historically doubled its GDP roughly every five years, and if it manages to address its debt and leverage issues, Dalio’s strategic bet could yield significant returns.
That said, the billionaire highlighted the need for caution when investing in China, emphasizing that every country experiences economic cycles with periods of growth and decline. He advised against over-concentrating investments in any single nation, including China, to prevent it from disproportionately influencing a portfolio. He stressed that the critical factor is carefully managing the size and structure of such investments to balance risk and opportunity effectively.
The “All-Weather” ETF
Bridgewater Associates recently partnered with State Street’s asset management division to expand into the retail investment market, marking a strategic shift for the hedge fund. Announced on November 19, the collaboration will introduce the “All-Weather” ETF, which leverages one of Ray Dalio’s most renowned strategies. Bridgewater will act as a sub-adviser, providing a tailored daily model portfolio for the fund.
This move reflects a growing trend among hedge funds venturing into the $14 trillion ETF market, which has flourished due to its liquidity, tax efficiency, and typically lower fees. Originally developed in 1996 to manage Ray Dalio’s trust assets, the All-Weather strategy employs a risk-parity approach. Instead of concentrating heavily on high-risk assets like stocks, the strategy diversifies across asset classes, including bonds and commodities, using leverage on lower-risk investments to achieve comparable returns with reduced volatility.
Ray Dalio of Bridgewater Associates
Our Methodology
We examined Bridgwater Associates’ stock portfolio from the third quarter of 2024. The stocks are ranked based on the firm’s stake value in each holding.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
15. Visa Inc. (NYSE:V)
Bridgewater Associates’ Stake Value as of Q3: $167.6 million
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V), a global leader in digital payments, operates across more than 200 markets, connecting 4 billion account holders with over 130 million merchants and 14,500 financial institutions, making it a key enabler of the global economy. Visa’s adaptable business model thrives across diverse demographics and regions, catering to preferences influenced by age, income, and geography. The company is well-positioned to capitalize on emerging digital trends, including the rapid growth of e-commerce and digital wallet adoption in high-growth markets like Asia, as these regions increasingly transition to cashless systems.
On October 30, Macquarie reaffirmed its Outperform rating on Visa Inc. (NYSE:V) and raised the price target to $335 from $300, citing the company’s strong fourth-quarter performance, which exceeded expectations due to robust revenue momentum. Macquarie highlighted Visa’s fiscal 2025 guidance, which anticipates continued growth, including a recovery in China—a market that posed challenges during fiscal 2024.
For fiscal 2025, Visa Inc. (NYSE:V) forecasts net revenue growth in the high single-digit to low double-digit range, aligned with its 10% growth target, and projects adjusted EPS growth at the higher end of the low double-digit range. Despite recent restructuring impacting 1,400 employees, Visa Inc. (NYSE:V) plans to reinvest anticipated cost savings into talent acquisition and growth initiatives to sustain its market leadership.
14. PDD Holdings Inc. (NASDAQ:PDD)
Bridgewater Associates’ Stake Value as of Q3: $ 168.7 million
Number of Hedge Fund Holders: 78
PDD Holdings Inc. (NASDAQ:PDD) is a global commerce group with two flagship ventures: Pinduoduo, a leading e-commerce platform, and Temu, an online marketplace rapidly expanding in Europe and North America with significant potential to capture a sizable share of the global online retail market.
On November 22, Benchmark analyst Fawne Jiang lowered the price target for PDD Holdings Inc. (NASDAQ:PDD) shares to $160 from $185 while maintaining a Buy rating. This adjustment followed a notable sell-off after the company’s Q3 2024 results fell short of expectations. The underperformance was attributed to slower international growth and a profitability reset due to increased domestic investments, a strategy the company had previously outlined.
In its Q3 2024 earnings report, PDD Holdings Inc. (NASDAQ:PDD) posted a 44% year-over-year revenue increase to RMB 99.4 billion. However, revenues and non-GAAP net profit missed market expectations by 3% and 6%, respectively. The shortfall was linked to the introduction of a fee reduction and merchant support program, which increased the cost of goods sold as the company subsidized logistics fees in remote areas. Despite these challenges, the commerce company continued to demonstrate robust revenue growth.
13. Merck & Co., Inc. (NYSE:MRK)
Bridgewater Associates’ Stake Value as of Q3: $176.5 million
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK), headquartered in Rahway, New Jersey, is a renowned American multinational pharmaceutical company with historical ties to the original Merck Group, founded in Germany in 1668. Internationally recognized as Merck Sharp & Dohme (MSD), it is celebrated for its groundbreaking innovations in pharmaceuticals and vaccines.
On November 19, JPMorgan reiterated its Overweight rating and $145 price target for Merck & Co., Inc. (NYSE:MRK) after the company reported positive Phase 3 trial results for a subcutaneous formulation of its cancer drug Keytruda. The trial successfully met its dual primary pharmacokinetic endpoints, marking a critical milestone in reinforcing the long-term sustainability of the Keytruda franchise in the U.S.
In its Q3 2024 earnings report, Merck & Co., Inc. (NYSE:MRK) recorded a 4% revenue increase, reaching $16.7 billion, driven by strong sales of Keytruda and the recent launch of Winrevair. The company also highlighted significant clinical advancements and new FDA approvals, bolstering its oncology portfolio. Additionally, the pharma giant announced a quarterly dividend of $0.81 per share on November 19, payable on January 9, 2025, to shareholders of record as of December 16, 2024.
Oakmark Equity and Income Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:
“Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical firm with leading oncology, vaccine and animal health franchises. Premier products in Merck’s portfolio include Keytruda, Gardasil, Winrevair and Bravecto. Outsized contributor Keytruda is an immuno-oncology drug that treats several cancers and tumors. Keytruda is an astounding clinical and commercial success that is on track to become one of the best-selling prescription drugs to date. Investor angst surrounding Keytruda’s pending U.S. patent expiration in 2028 presented a chance to buy shares at a discounted valuation. We believe opportunities to extend Keytruda’s duration through life cycle management are underappreciated. More importantly, discounted cash flows from products already on market cover today’s entire stock price, meaning there is minimal value ascribed to a promising pipeline with strong sales potential. We believe Merck is led by a capable management team that looks to reinvest these cash flows in an accretive manner.”
12. Constellation Energy Corporation (NASDAQ:CEG)
Bridgewater Associates’ Stake Value as of Q3: $199.65 million
Number of Hedge Fund Holders: 78
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy provider with a robust clean energy portfolio of over 23,000 megawatts, including nuclear, solar, wind, and hydroelectric power plants. Impressively, nearly 90% of its annual energy output is derived from carbon-free sources.
In its latest financial results, the company delivered strong performance, reporting earnings of $2.74 per share, surpassing analyst estimates for the third time in four quarters. Quarterly revenue reached $6.55 billion, up from $6.11 billion in the prior year, underscoring Constellation Energy’s consistent growth and financial stability.
In September, both Wells Fargo and Morgan Stanley raised their price targets for Constellation Energy Corporation (NASDAQ:CEG) following the restart of the Crane Clean Energy Center, formerly Three Mile Island Unit 1. The restart coincided with a 20-year power purchase agreement (PPA) with Microsoft, highlighting growing demand for clean energy from major tech firms. Wells Fargo increased its target from $250 to $300, citing Microsoft’s commitment to decarbonization and preference for reliable nuclear energy. Morgan Stanley raised its target from $233 to $313, emphasizing the PPA’s significance, which secures pricing at approximately $100/MWh.
11. Lam Research Corporation (NASDAQ:LRCX)
Bridgewater Associates’ Stake Value as of Q3: $225.28 million
Number of Hedge Fund Holders: 58
Lam Research Corporation (NASDAQ:LRCX) is a leading technology company specializing in equipment and services essential for semiconductor manufacturing, a cornerstone for powering artificial intelligence. The company’s strategic edge stems from the rapid adoption of AI technologies, driving demand for its solutions.
Lam Research Corporation (NASDAQ:LRCX) commands a strong position in the semiconductor equipment market, particularly in the NAND segment, where it holds over 30% market share in capacity upgrades. This dominance positions the company advantageously as demand for memory solutions accelerates. The company’s edge is further reinforced by its focus on the “4 Horsemen” technologies: Gate All Around (GAA), Backside Power, Advanced Packaging, and Dry Resist, which are poised to drive growth beyond the pace of the overall wafer fabrication equipment market.
Deutsche Bank revised its outlook on Lam Research Corporation (NASDAQ:LRCX) on October 24, lowering the price target to $75 from $88 while maintaining a Hold rating. This adjustment followed the release of the company’s earnings report, which showed strong performance driven by robust demand for advanced DRAM technology, solid sales in China, and growth in its Customer Support Business Group, particularly in spares, services, and upgrades. While the short-term results exceeded expectations, Deutsche Bank flagged concerns about the 2025 outlook, noting a lack of detailed guidance and potential headwinds from an economic slowdown in China and a tepid recovery in other markets. The bank now projects Lam Research’s CY25 revenue growth at 10% year-over-year, down from its prior estimate of 16% and below the consensus forecast of 18%.
Artisan Partners mentioned Lam Research Corporation (NASDAQ:LRCX) in its Q2 2024 investor letter. Here is what the fund said:
“The top contributors to performance for the quarter were Alphabet, Lam Research Corporation (NASDAQ:LRCX) and Elevance. Lam Research shares rose 10% during the quarter and are up 67% over the past year, primarily due to optimism around the pending investment cycle in semiconductor capital expenditures. Lam is one of the largest equipment manufacturers used to make semiconductor chips. This equipment, commonly referred to as WFE (wafer fabrication equipment), is expected to experience significant growth due to a combination of a cyclical rebound in memory chips and growing demand for new AI-related chips. Lam’s product portfolio is particularly well positioned to benefit from both trends and should grow even faster than the overall market. Its shares now trade at ~30X prior peak earnings, which suggests this dynamic is well understood by the market and is mostly priced in.”
10. Walmart Inc. (NYSE:WMT)
Bridgewater Associates’ Stake Value as of Q3: $229.6 million
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT), the world’s largest brick-and-mortar retailer, operates an impressive 100,000 locations globally, leveraging its financial strength to maintain competitive pricing and steady margins in a notoriously low-margin industry. Additionally, Walmart’s international expansion, especially in high-growth markets like Mexico and India, presents significant opportunities to drive future growth and strengthen its global footprint.
High-margin revenue streams, such as Marketplace and Supplier Advertising, are steadily growing and enhancing Walmart’s financial outlook. Notably, General Merchandise achieved year-over-year growth for the first time in seven quarters. E-commerce also continues to drive performance, with U.S. online sales rising 22% and global sales up 27%, alongside narrowing segment losses.
On November 22, Barclays raised its price target for Walmart Inc. (NYSE:WMT) stock by $12 to $90 following the retailer’s strong third-quarter earnings. The firm highlighted robust U.S. operational performance, particularly in grocery and general merchandise, as well as the ongoing expansion of Walmart’s marketplace. However, Barclays noted potential foreign exchange challenges, as a stronger dollar could impact revenue from the company’s international operations.
9. Johnson & Johnson (NYSE:JNJ)
Bridgewater Associates’ Stake Value as of Q3: $238.2 million
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ), one of the largest global healthcare companies, boasts a diverse portfolio spanning pharmaceuticals, medical devices, and consumer health products. Its offerings range from everyday essentials like Band-Aids and Tylenol to cutting-edge medical devices and innovative prescription drugs.
Stifel analysts recently raised their price target for Johnson & Johnson (NYSE:JNJ) shares to $170 from $160, maintaining a Hold rating. The adjustment follows a strong third-quarter performance that exceeded both Stifel’s and consensus expectations, driven by robust results in the pharmaceutical segment. CFO Joe Wolk provided an optimistic outlook for 2025, projecting over $57 billion in sales within the Innovative Medicine sector despite the anticipated loss of exclusivity for STELARA. Additionally, MedTech sector growth is expected to reach the upper end of its long-term range of 5%-7%.
Further bolstering its outlook, Johnson & Johnson (NYSE:JNJ) reported positive Phase 3 trial results for TREMFYA® in treating ulcerative colitis and Crohn’s disease. The drug demonstrated superior endoscopic remission rates compared to ustekinumab and placebo, particularly among patients who were biologic-naïve or had not responded to previous treatments.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Bridgewater Associates’ Stake Value as of Q3: $240.2 million
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD), based in Santa Clara, California, is a global leader in semiconductor technology. The company specializes in designing advanced computer processors and related technologies, catering to both business and consumer markets. Its operations are divided into key segments: Data Center, Client, Gaming, and Embedded.
In its Q3 earnings report, Advanced Micro Devices, Inc. (NASDAQ:AMD) posted revenue of $6.8 billion, marking an 18% year-over-year increase. This growth was fueled by robust sales of EPYC and Instinct data center products, along with strong demand for Ryzen PC processors. The Data Center segment delivered record-breaking revenue of $3.5 billion, a 122% increase compared to the previous year, while the Client segment experienced a 29% revenue growth.
On November 19, Northland Capital Markets reiterated an Outperform rating for AMD shares, maintaining a price target of $175. The firm’s bullish outlook is driven by the anticipated spike in PC demand by 2025, as Microsoft phases out support for Windows 10. With an estimated 1.2 billion systems currently running Windows 10, Northland projects a significant transition to Windows 11, potentially adding $1.0 to $1.7 billion in revenue for Advanced Micro Devices, Inc. (NASDAQ:AMD) during the 2025 calendar year.
7. Apple Inc. (NASDAQ:AAPL)
Bridgewater Associates’ Stake Value as of Q3: $240.4 million
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL), a globally renowned technology leader, is known for its iconic products like the iPhone, Mac, and Apple Watch, as well as its ecosystem of services, including iCloud and Apple Music.
In its third-quarter earnings, Apple Inc. (NASDAQ:AAPL) reported a record $94.9 billion in revenue, marking a 6% year-over-year increase. CEO Tim Cook attributed this growth to the success of the latest product lineup, including the iPhone 16 series, Apple Watch Series 10, and AirPods 4.
On November 19, Jefferies maintained a Hold rating on Apple Inc. (NASDAQ:AAPL) shares with a price target of $211.84. The firm’s analysis highlighted potential risks to Apple’s gross margins and discounted cash flow (DCF) value due to proposed tariff hikes under a Trump policy scenario. These tariffs could reduce gross margins by 3.0-6.7 percentage points and DCF value by 5-10%, assuming no adjustments in average selling price (ASP) or volume. While Apple Inc. (NASDAQ:AAPL) is working to diversify production outside of China, only 10% of iPhone production has shifted so far. Jefferies focused its analysis on the iPhone, which remains Apple’s largest revenue driver, contributing 52% of total sales.
Madison Sustainable Equity Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Alphabet Inc., Eli Lilly and Company, Qualcomm Incorporated, Microsoft Corporation, and Apple Inc. (NASDAQ:AAPL) were the largest detractors. Apple has been volatile in the last quarter but ended on strength. Early in the quarter, Apple benefited from the introduction of their AI strategy, Apple Intelligence. They followed in September with the new iPhone 16, which also created some excitement. We are underweight to Apple, which has resulted in a headwind for performance.”
6. Amazon.com, Inc. (NASDAQ:AMZN)
Bridgewater Associates’ Stake Value as of Q3: $263 million
Number of Hedge Fund Holders:
Amazon.com Inc. (NASDAQ:AMZN), a tech giant known for its leadership in e-commerce, cloud computing, streaming, and online retail, is also advancing in artificial intelligence (AI) through partnerships with startups like Anthropic and agreements with the U.S. government for AI model testing.
Amazon.com Inc. (NASDAQ:AMZN) recently committed an additional $4 billion investment in Anthropic, a competitor to OpenAI, as it seeks to strengthen its position in the generative AI space. This doubles Amazon’s earlier investment in the firm, which is known for its GenAI chatbot, Claude. The investment, made via convertible notes, will be phased, with an initial installment of $1.3 billion.
On November 22, Truist Securities reaffirmed its Buy rating on Amazon.com Inc. (NASDAQ:AMZN) shares with a price target of $270. The firm noted that Amazon’s North American revenue is trending slightly above consensus estimates for the current quarter, reflecting strong momentum through November 18. This performance aligns with the upper range of industry growth projections for the holiday season.
In its fiscal Q3 2024 results, Amazon.com Inc. (NASDAQ:AMZN) reported net sales of $158.9 billion, an 11% year-over-year increase, driven largely by the robust performance of Amazon Web Services (AWS). AWS revenues surged 19% year-over-year to $27.5 billion, while operating income for AWS rose from $7 billion in Q3 2023 to $10.4 billion in Q3 2024. Looking ahead, the tech giant projects Q4 2024 net sales growth between 7% and 11% year-over-year, signaling continued momentum across its business segments.
5. The Procter & Gamble Company (NYSE:PG)
Bridgewater Associates’ Stake Value as of Q3: $277.3 million
Number of Hedge Fund Holders: 68
The Procter & Gamble Company (NYSE:PG) is one of the world’s largest consumer goods corporations, boasting a portfolio of over 80 iconic brands, including Gillette and Oral-B, catering to consumers globally.
In its fiscal Q1 2025 earnings report, The Procter & Gamble Company (NYSE:PG) fell short of sales and net income expectations but exceeded forecasts for adjusted profit. Sales dipped 1% year-over-year to $21.74 billion, below the $21.99 billion consensus estimate. Net income declined to $3.99 billion from $4.56 billion the previous year, missing the $4.60 billion forecast. However, adjusted profit, which factored in $800 million in restructuring costs related to operations in Argentina and Nigeria, came in at $4.76 billion, slightly above analyst projections.
On November 25, DA Davidson upgraded The Procter & Gamble Company (NYSE:PG) from Neutral to Buy and raised its price target significantly, from $160 to $209. The upgrade was driven by the company’s strong performance in China, where 11/11 sales met expectations, and SK-II, its luxury skincare brand, recorded year-over-year growth following the September launch of its LXP product line. These have bolstered the firm’s confidence in P&G’s ability to achieve organic sales growth of 4%-6% in the second half of fiscal 2025.
4. Microsoft Corporation (NASDAQ:MSFT)
Bridgewater Associates’ Stake Value as of Q3: $374.4 million
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT), a global technology leader, specializes in productivity software, cloud services, and personal computing solutions.
The growing demand for artificial intelligence is fueling a surge in the data center market, where Microsoft Corporation (NASDAQ:MSFT) is well-positioned to capitalize on this trend. Moreover, in the healthcare sector, the company has partnered with Tevogen Bio to accelerate the target identification process for its oncology product, TVGN 920, utilizing Microsoft’s AI and cloud technologies.
In its Q1 FY2025 earnings report, Microsoft Corporation (NASDAQ:MSFT) posted strong results, with revenue increasing 16% year-over-year to $65.6 billion. Azure’s growth of 34% met expectations, although next-quarter guidance of 31%-32% fell slightly short, reflecting delays in data center capacity from third-party providers. Despite this, Azure’s consumption trends remain stable. Meanwhile, Microsoft’s AI segment is poised to exceed a $10 billion annual run rate in the next quarter, highlighting its expanding role in the AI industry.
On November 25, TD Cowen reaffirmed a Buy rating on Microsoft Corporation (NASDAQ:MSFT), maintaining a price target of $475. The update followed announcements at Microsoft’s Ignite conference, where the company unveiled approximately 80 new products and features, many focused on advancing AI capabilities, including innovative AI Agent functionalities.
Carillon Eagle Growth & Income Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (MSFT) traded lower following concerns about the sustainability of its data center buildout for generative artificial intelligence (AI). The company continues to show strong growth in its cloud segment, and management highlighted optimism surrounding demand signals.”
3. Meta Platforms, Inc. (NASDAQ:META)
Bridgewater Associates’ Stake Value as of Q3: $459.2 million
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is a technology leader renowned for its flagship products—Facebook, Instagram, and WhatsApp—as well as its cutting-edge advancements in augmented reality (AR) and virtual reality (VR) technologies.
On November 25, Raymond James added Meta Platforms, Inc. (NASDAQ:META) to its “Analyst Current Favorites” list, highlighting it as one of the firm’s top stock ideas. The firm anticipates a stronger narrative for the social media giant in 2025, driven by advancements in artificial intelligence and monetization opportunities in generative AI. Meta’s updated Deep Learning Recommendation Model (DLRM) is projected to enhance user engagement by mid-single to low-double digits. Additionally, Meta AI, already engaging over 500 million monthly active users, is seen as a potential $10 billion+ revenue driver in sectors such as travel and entertainment, particularly in search and assistant services by 2026.
In its Q3 2024 earnings, Meta Platforms, Inc. (NASDAQ:META) reported impressive results, with earnings per share of $6.03 and revenue of $40.5 billion, surpassing analyst estimates of $5.22 per share and $40.2 billion in revenue. The company’s strategic investments in AI to improve app user experiences and engagement have bolstered its ability to attract high-value advertising campaigns, ensuring continued growth in its core business segments.
Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users. The company generates more than 95% of its revenue from advertising, evenly split between North America and international markets. During the quarter, shares contributed to performance following the release of strong fiscal second quarter operating results, with revenues and earnings beating analyst estimates. Management also raised their fiscal 2024 revenue guidance, citing improved advertising monetization. CEO Mark Zuckerberg stated that AI has played a key role in these successes, as the company is leveraging AI to enhance targeting, measurement, ranking, and ad delivery. Higher user engagement, driven by video ranking, content recommendations, and single video views, has also supported growth. Additionally, the optimization of ad placements within videos and automation of ad campaigns are further boosting monetization.”
2. NVIDIA Corporation (NASDAQ:NVDA)
Bridgewater Associates’ Stake Value as of Q3: $577.3 million
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA), a global leader in graphics computing and networking solutions, continues to see strong demand for its GPUs, particularly in gaming and AI-driven applications.
On October 29, NVIDIA Corporation (NASDAQ:NVDA) introduced its Enterprise Reference Architectures, offering blueprints to assist partners and customers in building AI factories. Subsequently, on November 6, the company announced a collaboration with Hugging Face to accelerate open-source AI robotics research and development, further solidifying its position in the AI space.
In a notable shift compared to the overwhelming analyst sentiment, Phillip Securities downgraded NVIDIA’s stock from a Buy to an Accumulate rating on November 22, attributing the move to recent price action. Despite the downgrade, the firm raised its price target slightly to $160 from $155 in its report. NVIDIA’s fiscal Q3 2025 earnings exceeded expectations, with revenue beating its guidance by 8% and profit after tax and minority interests (PATMI) soaring 109% year-over-year. Philip’s report noted that around 50% of NVIDIA’s data center sales come from hyperscalers, with the remainder split between enterprises and sovereign nations. Looking ahead, NVIDIA Corporation (NASDAQ:NVDA) plans to commence production of its Blackwell products in Q4 2025, with revenue projections exceeding initial estimates of “several billion dollars.”
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“In a reversal from the past two quarters, NVIDIA Corporation (NASDAQ:NVDA) represented our top relative contributor this quarter, despite the modest underperformance, declining -1.7%. In many ways, NVIDIA was a microcosm of the broader market’s heightened volatility. Beneath the placid surface, the company experienced a 27% drawdown followed by a +31% rally, only to repeat the cycle with a -21% drawdown followed by a subsequent 20% rally to finish the quarter. In our view, the stock’s volatility goes beyond fundamental business drivers, but the company in turn benefitted from increasing capital spending budgets from cloud service providers and large enterprises for generative AI (“GenAI”) infrastructure spending. Simultaneously, the stock endured weakness related to the delayed next-generation Blackwell chip, and an earnings forecast that exceeded expectations, albeit not as much as some investors hoped. While we continue to believe NVIDIA is a highly advantaged business, with significant demand for their chips and servers ahead of the need for that hardware from real-world businesses, we are cautious about its growth sustainability since it lacks recurring revenue.”
1. Alphabet Inc. (NASDAQ:GOOGL)
Bridgewater Associates’ Stake Value as of Q3: $726.3 million
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL), a technology leader, operates through a diverse portfolio that includes Google Services, Google Cloud, and Other Bets. Its flagship offerings, such as Search, YouTube, Android, Chrome, and advertising services, maintain a dominant market position, bolstered by cutting-edge advancements in artificial intelligence.
On October 29, Alphabet Inc. (NASDAQ:GOOGL) announced its fiscal Q3 2024 earnings, reporting a 15% year-over-year increase in consolidated revenue, totaling $88.3 billion. The Google Cloud segment, which includes Google Workspace, was a standout contributor, with revenue surging 35% year-over-year. This growth was largely driven by increased adoption of AI infrastructure and generative AI capabilities within its Cloud Platform services.
On November 21, UBS reiterated its Neutral rating on GOOGL shares, maintaining a price target of $192. The firm’s analysis focused on the Department of Justice’s (DOJ) Initial Proposed Final Judgment (PFJ), outlining remedies following a court ruling that classified Google as a monopolist in the search market. UBS noted that the proposed measures align with earlier DOJ frameworks from August and October, potentially posing a long-term risk to Alphabet’s revenue. However, the firm emphasized that any immediate impact on the company’s operations remains unlikely.
Although the implementation of the aforementioned regulatory changes depends on the outcome of appeals and potential Supreme Court proceedings, Alphabet Inc. (NASDAQ:GOOGL) plans to appeal the ruling and pursue an injunction, which would delay any required adjustments to its business practices.
While we acknowledge the potential of GOOGL, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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