AI Stocks: Billionaires & Big Gains

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It’s a curious thing, isn’t it, how often the very clever people with vast sums of money to invest seem to do… well, better than the rest of us? Not always, of course. Plenty of bright sparks have launched fortunes into the abyss. But when you see a pattern emerge – a cluster of fund managers consistently outperforming the S&P 500 – it tends to pique one’s interest. And, as it happens, a few rather successful individuals have been making some rather noticeable moves in the artificial intelligence arena. We’ve been peering at their quarterly filings – those SEC Form 13Fs, which are essentially public announcements of what these financial wizards have been up to – and a couple of stocks keep popping up.

Specifically, the portfolios of Cliff Asness at AQR Capital Management, Israel Englander of Millennium Management, and Steven Cohen at Point72 Asset Management – all of whom have demonstrated a knack for beating the market over the last three years – have been quietly accumulating shares of Nvidia and Western Digital. It’s not that they’re going all-in, mind you. These are substantial firms managing billions, so even a relatively small percentage of their holdings represents a significant investment. But it’s enough to make one wonder what they see that the rest of us might be missing.

  • Cliff Asness, a fellow who consistently outperforms by a margin (10 percentage points over three years, in his case), has Nvidia as his largest holding, with a smaller stake in Western Digital. Together, they account for 3% of his portfolio.
  • Israel Englander, another market maven (28 percentage points ahead of the S&P 500!), also favors Nvidia as his top pick, supplemented by a modest position in Western Digital, making up 2% of his holdings.
  • And Steven Cohen, with a rather impressive 31 percentage point lead over the S&P 500, mirrors the strategy of his peers, prioritizing Nvidia and adding a touch of Western Digital to his portfolio, constituting 3% of his total investments.

Now, both Nvidia and Western Digital have already enjoyed a rather spectacular run. Since the beginning of 2023, when AI became the buzzword du jour on Wall Street, Nvidia has soared a breathtaking 1,180%, and Western Digital has followed with a respectable 830% gain. You might think these managers would be taking profits, but apparently, they still believe there’s more to come. Which is… intriguing.

Nvidia: Up 1,180% Since January 2023

Nvidia, for those unfamiliar, is the company behind those powerful graphics processing units (GPUs) that make your video games look so realistic. But they’re much more than just gaming chips. These GPUs, also known as data center accelerators, are incredibly efficient at handling the demanding calculations required for artificial intelligence. What really sets Nvidia apart, however, is its full-stack approach. They don’t just sell you the chips; they provide the entire infrastructure – the racks, the networking gear, and, crucially, the software. It’s a bit like buying a car where the engine, chassis, and navigation system are all designed to work seamlessly together.

They’ve developed CUDA, a comprehensive suite of software tools that simplifies the process of building applications for their GPUs. This is a clever move, because it locks customers into the Nvidia ecosystem. It’s like inventing a language that only your machines understand. Competitors like Broadcom are developing their own AI accelerators, and they might even be cheaper, but Nvidia’s integrated approach often results in a lower total cost of operation. As Nvidia’s CEO, Jensen Huang, rather confidently put it, “Our TCO is so good that even when the competitors chips are free, it’s not cheap enough.” A bold statement, to be sure, but one that’s hard to argue with given their current trajectory. The consensus on Wall Street is that Nvidia will continue to dominate the AI infrastructure landscape for years to come, and analysts estimate earnings will grow at a robust 67% annually through 2027. At 46 times earnings, the valuation doesn’t seem entirely unreasonable.

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Western Digital: Up 830% Since January 2023

Western Digital, on the other hand, is a bit of a different beast. They specialize in data storage devices – hard disk drives (HDDs) and, increasingly, solid-state drives (SSDs). HDDs are the older technology, slower and less energy-efficient than SSDs, but also significantly cheaper per terabyte of storage. Think of it like this: SSDs are the sports car – fast and flashy – while HDDs are the reliable pickup truck. Both have their place.

In the world of AI, both SSDs and HDDs play crucial roles. SSDs are ideal for tasks that require speed, like training and running AI models. HDDs, however, are better suited for storing vast amounts of data that aren’t actively being used. It’s a matter of balancing performance with cost. Western Digital led the HDD market in the first half of 2025, narrowly beating out Seagate, and consistently ranks among the top two players, with Toshiba trailing behind. Demand for HDD storage is projected to grow at a healthy 22% annually through 2030, driven by the insatiable appetite of AI infrastructure.

Western Digital recently reported solid financial results, with revenue up 27% to $2.8 billion, fueled by strong demand for HDD storage and a bit of a supply shortage that allowed them to command higher prices. Earnings jumped an impressive 137% to $1.78 per share. Investors have piled into the stock, driving it up 350% in the past year, hoping to capitalize on the HDD shortage. Analysts predict earnings will grow at 26% annually through 2027. At 34 times earnings, the valuation seems reasonable, but it’s worth noting that the HDD market is notoriously cyclical. The current supply shortage won’t last forever, and when it ends, prices will likely fall, potentially impacting future earnings. Wall Street seems to be aware of this risk, as the median target price for Western Digital implies a 10% downside from its current level. It’s a reminder that even the most promising investments come with their share of uncertainties. And that, my friends, is just the way the market works.

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2026-01-20 11:33