AI stocks surge with billionaire backing

What happened: Billionaires, including Donald Trump, Greg Abel of Berkshire Hathaway, and several prominent hedge fund managers like Glenn Greenberg and Ken Griffin, have been increasing their exposure to AI stocks. Adeia Inc (NASDAQ:ADEA), Synnex (NYSE:SNX), NVIDIA Corp. (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOGL), and Advanced Micro Devices, Inc. (NASDAQ:AMD) are among their top picks. Cathie Wood of Ark Invest has also shown interest in post-IPO AI chip company Cerebras Systems. Meanwhile, AI-related memory and storage stocks like Sandisk have surged, up 591% year-to-date.

Market impact: The AI sector has seen a significant boost, with AI-related stocks catapulting to new heights. Companies with strong AI capabilities, such as Alphabet and Meta Platforms, have seen their shares rise, while AI chipmakers like NVIDIA and AMD have also benefited. The AI trend is driving growth in cloud computing and data storage, affecting tech giants and semiconductor companies alike.

What to watch next: Investors should keep an eye on the upcoming earnings reports of these billionaire-backed AI stocks, with NVIDIA set to report on May 24 and AMD on May 31. The progress of AI chipmaker Cerebras Systems post-IPO will also be a key development to watch. Additionally, regulatory decisions and geopolitical risks surrounding AI could impact the sector's trajectory.