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"Follow the money."

That phrase gained notoriety during the Watergate scandal five decades ago. However, it could be useful for investors today looking for stocks to buy.

Much of the big money has poured into artificial intelligence (AI) stocks over the last two years. Nvidia has been an especially significant beneficiary of this trend, with its shares skyrocketing over 9x since the beginning of 2023.

But where would following the money lead investors now? Here are billionaire hedge fund managers' two favorite AI stocks -- and Nvidia isn't one of them.

The top hedge fund billionaires

Forbes ranked the wealthiest hedge fund managers of 2023. The top 10 were:

Jim Simons has since passed away, although his Renaissance Technologies hedge fund remains active. The net worths of the other nine hedge fund managers have changed somewhat since last year, but they're all still multibillionaires.

Most of these billionaire hedge fund managers have invested heavily in AI. Carl Icahn stands out as a notable exception. None of Icahn Enterprises' holdings are AI-related. Michael Platt's BlueCrest Capital also has no AI stocks among its top positions.

Billionaire hedge fund managers' two favorite AI stocks

However, two AI stocks, in particular, are arguably the favorites of the other billionaire hedge fund managers. Amazon (NASDAQ: AMZN) ranked in the top five holdings of seven of the 10 richest hedge fund managers on Forbes' list based on their latest regulatory filings. Microsoft (NASDAQ: MSFT) wasn't too far behind, landing in the top five for half the 10 wealthiest hedge fund managers.

Steve Cohen and Israel England like Amazon the most. The e-commerce and cloud services leader is the largest holding for Cohen's Point72 Asset Management and England's Millennium Management. Amazon is the second-largest holding for David Tepper's Appaloosa Management.

Microsoft ranks as the No. 1 position for David Shaw's D.E. Shaw & Co. It's the second-largest holding for Chase Coleman's Tiger Global Management. And while the tech giant isn't Ken Griffin's biggest position for his Citadel fund, Microsoft is his top AI stock.

Runners up

Although Nvidia wasn't one of billionaire hedge managers' top two favorite AI stocks, it was a close runner-up. The graphics processing unit (GPU) maker was in the top five holdings for four of Forbes' 10 richest hedge fund managers. Perhaps surprisingly, though, Nvidia wasn't the No. 1 AI stock for any of them.

Meta Platforms wasn't too far behind either. It ranked in the top five holdings for three of the individuals on Forbes' list. Meta is the largest position for Coleman's Tiger Global Management.

Should you buy Amazon and Microsoft too?

No one should buy a stock only to follow in the footsteps of billionaire investors. However, I think Amazon and Microsoft have a lot going for them.

Amazon is the world's largest cloud services provider. AI should provide a long-term tailwind for the company's Amazon Web Services unit. Amazon is also using AI extensively in its e-commerce operations to increase efficiency and profitability.

Microsoft continues to reap the rewards from its partnership with ChatGPT creator OpenAI. It has integrated OpenAI's GPT-4 throughout its products. The company is the second-largest cloud service provider and should benefit from the same AI tailwind as Amazon.

As customers continue to move to the cloud to build and deploy AI models, Amazon's and Microsoft's revenue and earnings should grow significantly. Share prices tend to rise with earnings growth over the long term. I view Amazon and Microsoft as great AI stocks to buy right now. Just follow the AI money.

Should you invest $1,000 in Amazon right now?

Before you buy stock in Amazon, consider this:

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.