Key Points
The AI infrastructure build-out is the stock market’s hottest trend since the advent and proliferation of the internet in the mid-to-late 1990s.
Form 13F filings show that Wall Street’s savviest billionaire asset managers have flocked to two AI titans -- but not the ones you may have expected.
Billionaires’ favorite AI stocks are industry leaders with sustainable competitive advantages.
The evolution of artificial intelligence (AI) has, thus far, lived up to its billing as the most game-changing trend since the advent and proliferation of the internet in the mid-to-late 1990s. This multitrillion-dollar global opportunity is attracting investment capital at a never-before-seen clip -- and Wall Street's savviest billionaire money managers have taken notice.
Thanks to quarterly filed Form 13Fs, we know exactly which AI stocks the most successful billionaire fund managers have been buying and selling. What might surprise you is that neither graphics processing unit (GPU) kingpin Nvidia (NASDAQ:NVDA) nor Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) is billionaires' favorite AI stock. That distinction is reserved for Amazon (NASDAQ:AMZN) and Taiwan Semiconductor Manufacturing (NYSE:TSM).
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Image source: Getty Images.
Billionaires love AWS's potential
I reviewed the top-four holdings of nearly 20 billionaire investors and looked for common links in the AI arena. Only two stocks appeared as a top-four holding for at least five billionaires, and Amazon was one of them:
- No. 1 holding for David Tepper at Appaloosa
- No. 1 holding for Seth Klarman at Baupost Group
- No. 2 holding for Chase Coleman at Tiger Global Management
- No. 2 holding for Dan Loeb at Third Point
- No. 4 holding for Bill Ackman at Pershing Square (NYSE:PS)
Although Amazon is best known for its dominant online marketplace, its most impressive growth has come from seizing the bull by the horns as an AI applications giant.
AWS just reported its fastest revenue growth in 18 quarters.
— Fiscal.ai (@Fiscal_ai) July 30, 2026
Up 37% YoY.
Massive acceleration.$AMZN pic.twitter.com/Vx7VBtWPYa
Prior to the AI revolution taking shape, cloud infrastructure services platform Amazon Web Services (AWS) was growing sales in the high teens. Since AWS integrated generative AI and large language model capabilities, year-over-year growth has pushed to an 18-quarter high of 37% as of the June-ended quarter.
The beauty of AWS is that its margins are significantly higher than those seen in Amazon's e-commerce and advertising operations. Even though AWS accounted for less than 21% of net sales through the first half of 2026, this segment has generated 60% of the company's operating income.
Image source: Getty Images.
TSMC is foundational to the AI infrastructure build-out
Whereas Amazon is the preferred AI applications stock for billionaire money managers, they've gravitated to contract chip manufacturing goliath Taiwan Semiconductor Manufacturing (better known as TSMC) as their favorite AI hardware stock:
- No. 1 holding for Chase Coleman at Tiger Global Management
- No. 1 holding for Philippe Laffont at Coatue Management
- No. 2 holding for Stanley Druckenmiller at Duquesne Family Office
- No. 2 holding for Ole Andreas Halvorsen at Viking Global Investors
- No. 3 holding for David Tepper at Appaloosa
The ability of hyperscalers to rapidly expand their AI-accelerated data centers depends on TSMC's chip-on-wafer-on-substrate (CoWoS) capacity. This packaging technology, which connects GPUs and high-bandwidth memory, is essential for rapid data transfers in AI-accelerated data centers.
TSMC's $TSM CoWoS capacity is expected to grow from 675K wafers in 2025 to 1.275M in 2026 and 2.31M in 2027.
— Beth Kindig (@Beth_Kindig) July 31, 2026
The 2027 forecast represents a significant upward revision from the previous estimate of 1.74M, reflecting accelerating AI-driven demand. pic.twitter.com/GPFTeduVRe
TSMC has been expanding its CoWoS capacity at a breakneck pace and has had little trouble locking in future orders at advantageous prices. Clearly, billionaires are pleased with the company's transparent cash-flow runway.
But the best thing about TSMC might just be its dominance in global chip manufacturing beyond AI. It's a key player in manufacturing central processing units and chips used in smartphones and automobiles. If an AI bubble forms and subsequently bursts, TSMC has a solid foundation to fall back on.
Sean Williams has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.