<\/p>\n
\n \u201c<\/span>Don\u2019t fall into the trap of thinking that every tech company which mentions AI belongs in your portfolio. \u201d<\/span>\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n Artificial intelligence is one of the most revolutionary technologies of our time, as I\u2019ve been\u00a0saying since 2022<\/a>. \u00a0Given Nvidia\u2019s There are still great opportunities to invest in AI\u2019s potential. In an April 2023 column<\/a>, I remarked that AI would be \u201ca multi-trillion dollar revolution.\u201d At the time, I noted that some of the best AI companies included Nvidia, Alphabet I have been a believer in the AI revolution since I started buying Nvidia and\u00a0wrote about it for MarketWatch back in 2016<\/a>. We want to continue to invest in this amazing revolution, but it feels now like a crowded trade. We don\u2019t want to fall into the trap of thinking that every tech company which mentions AI is a good investment. So let\u2019s go through key underlying trends empowering the AI revolution and find the best companies to invest in for the long term.\u00a0<\/p>\n First, it is clear that the most important AI companies are all racing to be the first to achieve artificial general intelligence (AGI). The most likely winners: Meta Platforms The current limiting factor for AI is computing power. Meta and Tesla are dedicating their compute power to training their own AI models. This differs from Microsoft, Amazon.com We\u2019ve come across a few other companies that could be major beneficiaries of the AI revolution. We like Autodesk We\u2019ve also own Cloudflare That said, most AI, software and semiconductor stocks are a crowded trade right now; probably there\u2019ll be a chance to buy at lower prices in the coming year. One of the keys to long-term investing is not overpaying for stocks when they get bubbled-up valuations. Remember that during the dot-com bubble, great companies such as Microsoft and Intel reached truly astronomical stock-market valuations, and it took many years for investors to earn a return if they bought in at the 2000 highs.<\/p>\n We will continue to hold our huge long-term winners including Nvidia, Alphabet, Meta Platforms, Taiwan Semiconductor and Tesla, as these companies are at the cutting edge of AI. We\u2019re excited about the prospects for Autodesk, Cloudfare and Intel. And we will also be on the lookout for the next Nvidia, Alphabet, Meta Platforms, or Tesla.<\/p>\n Disclosure: Willard and\/or the 10,000 Days hedge fund are net long META, GOOG, AMZN, TSLA, INTC, TSM, ADSK, NET, NVDA and net short AI. Positions can change at any time and without notice.<\/em><\/p>\n More: <\/strong>Look out, Super Mi<\/a>c<\/a>ro: Dell is cementing itself as an AI play too<\/a><\/p>\n Also read: <\/strong>\u2018GRANOLAS\u2019 vs. the Magnificent Seven: Which should investors dig into now?<\/a><\/p>\n<\/p><\/div>\n<\/div>\n
\n NVDA,
\n
\n blowout earnings results last month, it\u2019s worth revisiting the AI trend, review our prior picks and update our analysis. <\/p>\n
\n GOOG,
\n
\n and perhaps Microsoft
\n MSFT,
\n
\n I also cautioned against owning smaller-cap AI stocks including C3.ai<\/a>\u00a0
\n AI,
\n
\n Sprinklr CXM
\n CXM,
\n
\n \u00a0BigBear.ai<\/a>\u00a0BBAI
\n BBAI,
\n
\n and\u00a0SoundHound.ai<\/a>\u00a0SOUN
\n SOUN,
\n
\n \u2014 and still do. <\/p>\n
\n META,
\n
\n or Tesla
\n TSLA,
\n
\n Both of these companies are spending huge amounts and giving their best and brightest employees the task of building AGI for their in-house use. <\/p>\n
\n AMZN,
\n
\n Oracle
\n ORCL,
\n
\n and even Alphabet, which are selling their valuable compute resources to third parties for AI training. This results in near-term revenue for these companies, but we think AGI will be the most valuable technology ever created and the cloud providers will regret not having dedicated more of their resources to being the\u00a0first\u00a0to figure out AGI.\u00a0<\/p>\nCasting a wide net<\/h2>\n
\n ADSK,
\n
\n (the maker of engineering software AutoCAD. Its unique and massive dataset consists of plans, drawings, blueprints and designs that the company can use for a generative AI program that will increase the productivity and creativity of engineers and architects. <\/p>\n
\n NET,
\n
\n because its network of edge servers will be used to power the inferencing part of AI all around the world more securely and at much lower latency than the alternatives. We also own Intel
\n INTC,
\n
\n and Taiwan Semiconductor Manufacturing
\n TSM,
\n
\n as we think these companies will be the only companies on the planet with the foundries capable of building the advanced chips needed to power AI.\u00a0<\/p>\n