3 Popular Stocks Billionaires Bought Up in the First Quarter

It can pay substantial dividends to follow the smart money billionaires in certain stocks. And while some hedge funds may get things wrong, I do think that investors should be on high alert if there are several big names plowing considerable sums into a handful of names.

Indeed, second-quarter moves are due to be revealed soon, but in this piece, we’ll have a review of three of the larger big-money buys that billionaire investors have taken a liking to. As to whether they’ll still be bought up in Q2 remains to be seen, but let’s just say I wouldn’t be surprised if there’s more buying activity as the recent rally in the S&P 500 begins to run out of steam. Without further ado, let’s just get right into the names:

Microsoft

Microsoft (NASDAQ:MSFT) stock was scooped up by more than a dozen funds in the first quarter, and it’s easy to imagine why. The enterprise software behemoth is pretty much the safe, blue-chip way to bet on artificial intelligence (AI). It has a relationship with OpenAI and Sam Altman, as well as its own AI ambitions.

And while the Microsoft-OpenAI ties could get a tad more complicated as Sam Altman’s firm goes down the for-profit route, I wouldn’t make too much of the matter. At the end of the day, Microsoft has the right to use OpenAI’s tech until 2030, even if Microsoft’s stake were to be reduced drastically. Personally, I’d be more encouraged if Microsoft were to swap out ChatGPT for one of its own models (like MAI or its smaller Phi models) at some point over the next five years.

In any case, Microsoft is a one-stop shop for AI these days. And with a modest 31.9 times forward price-to-earnings (P/E) multiple, it’s still probably not too late to buy. With the stock at fresh all-time highs, it seems like the big money was right to place big bets in MSFT stock. The big questions we’ll all await in the coming weeks and months are whether the big money took profits or doubled down on strength in Q2. Regardless, Microsoft is a sound buy and one that’s leading the AI race, in my opinion.

Meta Platforms

Meta Platforms (NASDAQ:META) is another easy buy for investors seeking AI growth at a modest multiple. Like Microsoft, Meta has enjoyed an explosive rebound off those mid-April lows. And while the big money is likely in the green as shares inch closer towards highs, I do think that Meta is a name best held for the long haul. Despite climbing 144% in the last two years, shares still look modestly priced at 27.1 times trailing P/E.

Mark Zuckerberg has made a lot of long-term investors big money. As the firm enters the realm of AR (augmented reality) and AI glasses while bringing aboard boatloads of tech talent, I think things could become that much more interesting. The recent pick-up of Scale AI, I think, is a smart bet that could pay off huge dividends in as little as a few years.

While there was also a good amount of selling in Meta in Q1, it’s the new buys that I think deserve the most attention.

Taiwan Semiconductor

Taiwan Semiconductor (NYSE:TSM) was another name that experienced quite a few big-money bets in the first quarter. The semi fab giant has enjoyed a V-shaped surge that may not be over with as new highs come within sight. Despite U.S.-China tensions, it seems like the secular boom in AI is enough to power a level of growth that investors can no longer ignore.

Indeed, a Chinese invasion of Taiwan remains a risk, but one that I think is already baked into today’s very reasonable multiple (25 times trailing P/E). As the AI boom expands into the second half, Taiwan Semi is a name to stick with as it further enhances its operating efficiencies while readying for the next wave of AI chips. With a robust growth quarter in the books and a nice 1.54% dividend yield to collect while you wait, TSM stock certainly looks like the timeliest breakout buy of the Q1 hedge fund favorites.