In this article, we will take a look at the top 5 generative artificial intelligence companies to invest in. To see more such companies, go directly to Top 10 Generative Artificial Intelligence Companies to Invest In.
5. salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Holders: 136
salesforce.com, inc. (NYSE:CRM) accounts for about 3.52% of the total portfolio of The Generative AI ETF by Roundhill Investments. salesforce.com, inc. (NYSE:CRM) was quick to jump in the AI race by launching Einstein GPT, a generative AI platform for customer relationship management. The platform is capable of writing emails, scheduling meetings, summarizing texts and much more.
A total of 136 hedge funds tracked by Insider Monkey had stakes in salesforce.com, inc. (NYSE:CRM) as of the end of the first quarter of 2021.
Vulcan Value Partners made the following comment about Salesforce, Inc. (NYSE:CRM) in its Q1 2023 investor letter:
Salesforce, Inc. (NYSE:CRM) was a material contributor during the quarter. The company has taken numerous positive steps to increase profitability more quickly than expected. Salesforce also improved its corporate governance by recommending three new board members. The company is focused on improving margins, deemphasizing acquisitions, and has expanded its stock buyback plan from $10 billion to $20 billion. We believe Salesforce can pursue these opportunities while continuing to increase its competitive position.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 204
Alphabet Inc. (NASDAQ:GOOG) is at the forefront of the generative AI revolution. In addition to integrating generative AI in its operations, Alphabet Inc. (NASDAQ:GOOG) will allow other companies to use its technologies to develop generative AI applications.
During its first quarter earnings call, Alphabet shared its plans about generative AI tools:
“For developers, we have released our PaLM API alongside our new MakerSuite tool. It provides a simple way to access our large language models and begin building new generative AI applications quickly.A number of organizations are using our generative AI large language models across Google Cloud platform, Google Workspace and our cybersecurity offerings. For years, we’ve been focused on making Search even more helpful, from Google Lens to multi-Search to visual exploration in Search, immersive view in Maps, Google Translate, to all the language models powering Search today, we have used AI to open up access to knowledge in powerful ways. We’ll continue to incorporate generative AI advances to make Search better in a thoughtful and deliberate way.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 220
Meta Platforms, Inc. (NASDAQ:META) announced its own large language model called LLaMA earlier this year. The company already offers a chatbot service for small businesses. Recently, Meta Platforms, Inc. (NASDAQ:META) launched generative AI tools for advertisers that will allow them to test various text copies, images and other media for difference audience to optimize for ROI. In response to a question about generative AI, Mark Zuckerberg touched upon the company’s plans during Meta Platforms’ Q1 earnings call:
“Although there aren’t that many details that I’m going to share at this point, more of this will come in focus as we start shipping more of these things over the coming months. But I do think that there’s a big opportunity here. You asked specifically about advertisers, but I think it’s going to also help create more engaging experiences, which should create more engagement, and that, by itself, creates more opportunities for advertisers. But then I think that there’s a bunch of opportunities on the visual side to help advertisers create different creative. We don’t have the tools to do that over time, eventually making it. So we’ve always strived to just have an advertiser just be able to tell us what their objective is and then have us to be able to do as much of the work as possible for them and now being able to do more of the creative work there and ourselves for those who want that, I think, could be a very exciting opportunity.”
Artisan Value Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q1 2023 investor letter:
“Our top contributors in Q1 were Meta Platforms, Inc. (NASDAQ:META), Warner Bros Discovery (WBD) and FedEx. Following sharp declines in 2022, shares of Meta Platforms have more than doubled since their early November 2022 lows. Last year’s drawdown created a highly favorable risk-reward, which we took advantage of by adding to our position. Management has wisely, in our view, recalibrated its spending plans to focus on profitability amid a weaker advertising environment, increased TikTok competition and Apple’s privacy changes. While investors got ahead of themselves back in 2021, extrapolating pandemic growth rates into the future, Meta is still a highly successful enterprise generating over $120 billion of revenue annually on a run-rate basis and has more than $40 billion in cash on its balance sheet to help it navigate its future course. Recent usage and engagement trends for Facebook and Instagram have been positive, and Reels—Meta’s answer to TikTok—is gaining traction.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 243
Being the biggest player in the Cloud market gives Amazon.com, Inc. (NASDAQ:AMZN) a huge advantage in the software segment related to generative AI. As companies plan launching new generative AI applications, they need the required Cloud resources and scalability solutions. This is where Amazon.com, Inc. (NASDAQ:AMZN) comes in. The company recently announced Amazon Bedrock and Amazon Titan services that are specifically useful for generative AI applications.
Amazon.com, Inc. (NASDAQ:AMZN) is one of the most popular stocks among elite hedge funds as of the end of the first quarter, Insider Monkey’s database shows. A total of 243 hedge funds had stakes in Amazon.com, Inc. (NASDAQ:AMZN) at the end of March. The biggest stakeholder of the company is Harris Associates of Natixis Global Asset Management with a $2.4 billion stake.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Microsoft Corporation (NASDAQ:MSFT) is the best generative AI stock to buy according to hedge funds. Microsoft Corporation (NASDAQ:MSFT) has the credit of mainstreaming the generative AI revolution since its partnership with OpenAI made ChatGPT accessible to literally billions of people via its Bing search engine and forced other players to light a fire under their AI plans.
Microsoft Corporation (NASDAQ:MSFT) leads all stocks in our database when it comes to hedge fund sentiment. Out of the 943 funds tracked by Insider Monkey, 289 hedge funds reported stakes in the company.
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
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