Why This Billionaire Is Dumping Money Into AI Stocks — Should You, Too?
Written by
J. Arky
Edited by
Amen Oyiboke
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There’s a general rule of thumb when it comes to investing in stocks: if you like a stock, buy the stock, then stick with it and continue to buy more. This has proven to work wonders of wealth for many investors, including the likes of Ken Griffin, one of the most successful billionaires in history.
Griffin came on the investment scene by shorting stocks ahead of the Black Monday market crash in 1987. In 2023, he turned a profit of nearly $7 billion, which sounds like a lot, until you compare it to his hugely successful hedge fund, Citadel, churning out what CNN called “the largest annual windfall on record” of $16 billion.
Now, Griffin has his sights set on investing in artificial intelligence (AI), particularly generative AI, with his top five individual stock holdings in 2023 all pushing their money into companies geared towards AI.
This might be a very smart move, in the professional opinion of David Materazzi, CEO of Galileo FX.
“AI is the new printing press. It’s literally transforming how the world works, learns and creates at a scale never seen before. Ken Griffin’s move signals something clear … AI stocks represent the next frontier of value creation,” said Materazzi.
“With OpenAI aiming for 1 billion users, the potential is obvious: companies that harness AI will dominate. Like the Industrial Revolution, this isn’t optional — it’s a shift that will leave everything else behind. The smartest money bets on inevitability.”
Recently, Griffin sold more than 50% of his stake in AI stock Broadcom, amounting to more than 3.1 million shares, and put the money into another AI stock: Nvidia. Is he on to something the rest of the market doesn’t know?
“Ken Griffin’s significant investments in AI stocks reflect a strategic bet on the transformative potential of artificial intelligence across various industries,” said Michael Kodari, the CEO at KOSEC Securities. “However, retail investors should exercise caution before following suit. The surge in AI-related stocks has led to elevated valuations, with companies like Nvidia reaching market capitalizations exceeding $3 trillion.”
Such high valuations may already incorporate optimistic future growth, limiting potential upside and increasing the risk of a market correction, according to Kodari.
“Vanguard has warned that investors might be overestimating AI’s near-term potential, drawing parallels to the overvaluation seen during the dot-com bubble,” cautioned Kodari. “Therefore, while AI presents substantial long-term opportunities, current market conditions suggest that retail investors should be prudent, focusing on diversified portfolios and avoiding overexposure to potentially overvalued sectors.”
For the average person who is not a billionaire, there are pros and cons to investing in stocks, which always involve risk due to market fluctuation.
You will want to thoroughly assess your financial situation before you put a lot of money into a new, trailblazing stock. However, if you are lucky, it can pay off big time if you get in on the ground floor.
Make sure to speak to a financial advisor before investing in any untested stock, AI or otherwise.
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