According to a recent report by TipRanks, billionaire investor Steve Cohen is doubling down on artificial intelligence (AI), seeing it not as a speculative bubble but as a durable force in technology akin to the ’90s tech revolution. Cohen, the head of Point72, is reportedly setting up a new hedge fund specifically for AI investments, signaling strong belief in the sector’s growth potential.
Cohen’s current investment strategy through Point72 includes significant new stakes in Advanced Micro Devices (AMD) and Alphabet (GOOG, GOOGL), both recognized leaders in the AI space. His interest in AMD stems from the company’s aggressive push into AI-capable semiconductor chips.
AMD’s latest offerings, like the Ryzen 7 9800X3D for gaming and the Instinct MI300A APU for supercomputing, showcase its intent to compete with Nvidia (NVDA) in the AI chip market. With a market cap of around $221 billion – based on ticker’s previous close of $136.50 – AMD is positioning itself as a key player, backed by partnerships with tech giants like Meta (META), Microsoft (MSFT), and Oracle (ORCL). Cohen’s acquisition of 871,731 shares of AMD in the third quarter reflects his confidence in AMD’s future in the AI industry, projected by Statista to hit $92 billion by 2025.
On the other hand, Cohen’s investment in Alphabet underscores his faith in the company’s expansive reach in AI, particularly through its dominance in digital advertising. Alphabet’s recent quarterly performance, with revenues reaching $88.3 billion and an EPS of $2.12, a 37% increase year-over-year, highlights the robustness of its business model, centered around online search which commands nearly 90% of the market.
Cohen’s purchase of 1,159,225 shares of GOOGL – at last check, trading at $169.46 – in the same quarter points to his expectation of continued growth in Alphabet’s AI-driven services. The search giant’s AI efforts touch multiple aspects of its business and beyond. In search, AI personalizes user experiences, improves results, and powers features like “Multisearch,” allowing combined image and text queries.
AI also drives Google’s ad platforms, optimizing delivery and targeting—crucial for Alphabet’s core revenue stream. Gemini AI, a versatile model handling text, code, audio, images, and video, plays a central role in Alphabet’s strategy, enhancing services across Google Cloud, Workspace, and more. In hardware, Google’s Pixel phones use AI for advanced photography features like Night Sight. Google Assistant and Waymo, Alphabet’s autonomous driving company, showcase AI’s potential beyond traditional tech spaces. DeepMind’s ongoing research pushes AI boundaries, with applications in healthcare and gaming.
Cohen’s investments in AMD and Alphabet likely signal his confidence in their potential to harness AI for driving innovation, expanding market share, and achieving revenue growth across diverse industries.
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