• Billionaire money managers are kicking Nvidia to the curb.
  • Baidu and Amazon will replace Nvidia as the AI stocks that billions of investors are watching.

OUR TAKE
Currently, no trend has captured the attention and wallets of investors like artificial intelligence (AI). Many billionaire investors have been strategically moving their capital into and out of certain artificial intelligence stocks.
Nvidia used to be the most popular of the AI stocks. However, with the rise of many other tech companies in the AI space, Nvidia is slowly losing its position.
-Jennifer YU, BTW reporter

Nvidia has become the “infrastructure backbone” of the AI movement. However, we believe that the best time for Nvidia has come and gone. Baidu and Amazon are rapidly developing the field of artificial intelligence, allowing investors to see newer, faster developments.

The decline of Nvidia

In addition to growing external competition from the likes of Intel and Advanced Micro Devices, Nvidia is also likely to face a lot of internal competition for AI chips from its top customers. Microsoft, Meta Platforms, Amazon, and Alphabet, collectively account for around 40% of Nvidia’s sales, yet all four companies are developing high-powered AI chips of their own.

Besides, billionaires might also be turned off by the regulatory headwinds Nvidia is dealing with. China is the world’s second-largest economy, and an initial round of Chinese export restrictions prompted Nvidia to develop the toned-down A800 and H800 chips. However, U.S. regulators ended up restricting exports of these chips to China as well. China is a key market for Nvidia, and these restrictions could reduce its quarterly sales by billions of dollars.

Also read: Chipmaker Groq and a former AMP VP accuse Nvidia of unfair practises

Also read: Nvidia adds record $277 billion in stock market

Baidu

The first AI stock to attract billionaire money managers is China-based Baidu. Although not all billionaire investors will put their funds’ money into China stocks, eight billionaires were buyers of Baidu during the fourth quarter.

Baidu’s two fastest-growing areas in AI are cloud and intelligence-driving. The company’s AI Cloud can allow merchants to use generative AI solutions to tailor ads to individual customers. Apart from that, Apollo Go is the world’s most successful autonomous driving service, with accumulated rides on public roads of more than 5 million since inception.

Baidu is not an AI-focused company compared to Nvidia, and even if the AI bubble bursts, Baidu’s foundational operating segment would likely prevent it from plummeting. That’s one thing that reassures investors.

Amazon

The other AI stock that attracts billionaires to forget about Nvidia is Amazon. Eight successful billionaire investors bought large amounts of Amazon stock in the quarter ending last December.

Amazon is incorporating AI solutions into its operations in several ways. Some of the more intriguing applications include leaning on generative AI solutions within its cloud infrastructure services platform Amazon Web Services (AWS) to help merchants personalize advertising to consumers, and relying on generative AI to improve the quality of merchants’ product listings.

Most people’s impression of Amazon is its market-leading e-commerce platform, but online retail sales contribute very little profit since it’s a low-margin segment. Most of Amazon’s profits need to depend on its ancillary operations: AWS, subscription services, and advertising services.

Of these operations, AWS is a key driver of Amazon’s cash flow growth. Despite only accounting for a sixth of Amazon’s net sales, AWS was responsible for two-thirds of Amazon’s operating income last year.

Before you buy stocks

According to the Motley Fool Stock Advisor analyst team, they identified what they believe are the 10 best stocks for investors to buy now, and Baidu wasn’t one of them. The 10 stocks that cut could produce monster returns in the coming years.

Besides, Amazon’s stock price is also at historically cheap compared to Nvidia. Currently, Amazon shares are trading at less than 13 times the consensus cash flow per share in 2025, which is 44% below Amazon’s average cash flow over the previous five years.