Stocks known as the "Magnificent Seven" have attracted investors' attention in recent times -- and that includes the attention of some of the world's most successful investors. The perfect example is billionaire Ken Griffin, who, through his Citadel hedge fund, holds shares of all of these top technology stocks.
There's reason to pay close attention to the stocks Griffin is buying because he clearly has made many winning bets -- so you could win by following some of his moves. As the best-performing hedge fund ever, Citadel has generated about $74 billion in gains over time for investors. And last year, Citadel brought in more than $8 billion, prompting LCH Investments to name the money manager among 2023's top performers.
Most recently, Griffin has more than doubled his holdings of two Magnificent Seven stocks, players that both are investing heavily in AI and could emerge as winners in an eventual AI revolution. Let's check out these Griffin buys that could boost your portfolio too.
Image source: Getty Images.
1. Meta Platforms
In the fourth quarter of last year, Griffin's Citadel increased its position in Meta Platforms(NASDAQ: META) by 127%, adding more than 1 million shares. Now you may not immediately think of AI when you think of Meta. After all, the company owns Facebook, Messenger, WhatsApp, and Instagram, making it a social media giant. And thanks to this leadership, it generates the lion's share of its revenue by selling advertising across these platforms.
But AI is progressively becoming more and more a part of Meta's business, with the company aiming to include the technology in all of its products and services. For now, you can get a taste of this thanks to Meta's launch of the Meta AI conversational assistant in beta version across apps in certain geographies. By making AI an integral part of the social media experience, Meta may keep users on its apps longer -- and this could encourage advertisers to keep spending on these platforms to reach their target audiences.
Meta has made AI its investment focus this year and plans to bring on 600,000 graphics processing units (GPUs) of compute by the end of the year. The company also aims to become a leader in AI, open sourcing its large language model (LLM) Llama so that Meta's platform may one day be the industry standard.
All of this means now is a great time to follow Griffin into Meta, a company with a solid earnings track record and revenue source -- and potential to win in the AI market over time.
2. Amazon
Citadel lifted its position in Amazon(NASDAQ: AMZN) stock by 227% in the fourth quarter, buying more than 4 million shares. The hedge fund has thousands of holdings, but Amazon is its fourth-biggest position, so it's fair to say this player is one of Citadel's favorites. And for good reason. Amazon could benefit from AI in two ways and both might supercharge earnings over the long term.
First, Amazon itself is using AI to become more efficient and lower its cost to serve. For example, in e-commerce AI helps Amazon determine the fastest delivery routes for package delivery -- this reduces travel time and therefore cost. Amazon also is using AI to help customers find just the right items, and this is likely to keep them coming back.
Second, Amazon's cloud computing business -- Amazon Web Services (AWS) -- sells AI chips and related products and services to customers. And here, Amazon could win big. AWS is the world's biggest cloud company, meaning it has access to an enormous client base. And it's likely that these AWS clients will stick with the cloud provider for AI projects rather than going elsewhere.
AWS is going all in on AI, offering not only chips but also a fully managed service that gives customers access to popular LLMs that they can customize for their own purposes. This means AWS may serve a broad range of AI customers.
All of this should help Amazon -- already a leader in the high-growth businesses of e-commerce and cloud -- benefit from the explosive growth area of AI. And that's why right now is the perfect time to get in on this Ken Griffin stock.
Should you invest $1,000 in Meta Platforms right now?
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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. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Meta Platforms. The Motley Fool has a disclosure policy.
