These Billionaires Made Big Bets on These AI Stocks, but Should You Buy Them?

With the major market indexes sitting close to new highs, some of the most prominent billionaire investors continue to favor well-entrenched industry leaders that are involved in artificial intelligence (AI).

Chase Coleman’s net worth is estimated at more than $5 billion, according to Forbes. His company, Tiger Global Management, continues to hold a stake in Nvidia (NASDAQ: NVDA)the leading supplier of AI chips, which has delivered a 447% return to shareholders over the last 18 months.

Andreas Halvorsen is CEO of Viking Global Investors and has a net worth estimated at more than $7 billion. The firm oversees a multibillion-dollar stock portfolio, and its largest investment in the second quarter was Amazon (NASDAQ: AMZN).

These stocks are showing weakness following their latest earnings results, but their lower share prices might be setting up more gains in 2025. Here’s why.

1. Nvidia

Chase Coleman’s company disclosed an equity portfolio worth over $21 billion at the end of the second quarter. The sixth-largest position in the portfolio was leading AI chip supplier Nvidia, a stake worth $1.1 billion.

Shares of Nvidia recently pulled back off their highs following its latest earnings results. The company posted another strong quarter, with revenue up 122% year over year, but the stock’s advance over the last year left investors looking for better guidance for near-term growth.

Nvidia is gearing up for the launch of its next-generation Blackwell graphics processing unit (GPU). Management expects the chip to start generating billions in revenue in the fiscal fourth quarter, but next quarter’s guidance calls for revenue to be approximately $32.5 billion. While that represents an impressive year-over-year increase of about 80%, Wall Street analysts were looking for more.

Nvidia’s near-term guidance was not as strong as investors wanted, but it’s a positive sign that the company continues to experience strong demand for the current generation of GPUs, while the upcoming Blackwell chip should drive strong revenue next year.

With the stock down, investors have a great opportunity to buy shares at a better value point. The stock is now trading at a price-to-earnings (P/E) ratio of 27, which is an average valuation for the S&P500 index. The stock’s recent dip could be setting up for another run next year.

Looking into 2025, the biggest risk to Nvidia’s momentum would be a slowdown in spending across the data center market, but Tiger Global seems to see more upside potential in the stock. The company maintained its position and didn’t sell any shares in the second quarter.

In the recent earnings call, Nvidia said that demand for both the H200 and Blackwell GPUs is already running ahead of supply, which points to another year of robust growth that could send the stock to new highs next year.

2. Amazon

Andreas Halvorsen’s Viking Global Investors disclosed a stock portfolio worth more than $26 billion at the end of Q2. Its largest holding was Amazon, with a stake worth $1.7 billion.

Amazon shares are down for reasons similar to Nvidia. The stock entered the second-quarter earnings report trading at a higher valuation, which meant investors had high expectations for the company’s outlook. Amazon continued to show significant increases in operating profit and accelerating revenue growth in cloud services, but third-quarter guidance was lower than expected.

Amazon expects third-quarter operating profit between $11.5 billion to $15 billion, which doesn’t show improvement over the previous quarter’s operating profit of $14.7 billion, but managers said during the earnings call they still see “a number of opportunities to further reduce costs, ” which signals more profitable growth to come.

Amazon typically sees headwinds to operating profit during Prime Day deals when retail prices are discounted. However, the company continues to invest in areas that should see further margin improvement in the retail business over the long term, such as automation and robotics, expanding same-day delivery capabilities, and further optimizing inventory placement at regional facilities.

Amazon is also ramping up investments in generative AI and cloud computing infrastructure to support growth in Amazon Web Services. Most global IT spending is still on-premises, which provides a long runway of growth for Amazon’s most profitable business.

The shares are worth buying on the dip. The stock is trading at a fair forward P/E of 30 based on 2025 earnings estimates. Analysts expect Amazon’s earnings to grow 23% per year over the next several years. Assuming the stock continues to trade at the same P/E, the stock should be worth a lot more in another five years.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.