Nvidia and Microsoft: Billionaire Ken Fisher Pours More Money Into the Biggest AI Stocks

2025 is now almost upon us and will bring with it a new president to the White House. The stock market has kept up momentum since Trump’s election win, but it’s no guarantee it will keep pushing ahead. In fact, as investing legend Ken Fisher notes, an interesting phenomenon takes place in both the first and second of years of a president’s terms.

“You have way more negative years in the first and second,” said the Fisher Investments founder and executive chairman. “They’re actually only up about 60% of the time, down 40% of the time. It’s hard to get through both first and second without a negative year.”

However, the billionaire does throw another interesting detail into the mix.

“When they’re not negative, they tend to be up huge,” he said. “So 2025 becomes a year, where as you move into the year you better get it right because if you don’t get it right, you get it really wrong.”

Fisher has been planning ahead for what he thinks is coming next, and he evidently believes the current biggest trend, AI, has legs. He has been busy scooping shares of those operating in the space, but not just any names – shares of Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT) – the biggest AI stocks out there.

Let’s take a closer look and see why Fisher, who has a net worth of $11.2 billion, has been pouring millions into these AI stalwarts.

Nvidia

We’ll start with the classic AI name. No company has made more of the opportunity afforded by AI than Nvidia. The chip maker has used it to such an extent that it is now the world’s most valuable company. It’s a stunning story of growth that doesn’t seem likely to tail off anytime soon.

While the company is now the undisputed AI leader, it initially set out to develop high-performance GPUs (graphics processing units) to power gaming and multimedia applications.

Although gaming was once Nvidia’s primary focus and main breadwinner, the company eventually expanded into other sectors, leveraging the power of its GPUs, which have become essential for machine learning, AI, and deep learning, thanks to their ability to perform massive computational tasks.

These days, Nvidia’s chips are the processors of choice in the AI space, a sector completely dominated by the company. And by the look of the latest set of quarterly results, it’s a position is unlikely to vacate anytime soon.

For the fiscal third quarter (October), Nvidia reported record revenue of $35.08 billion – a 93.6% year-over-year surge that outpaced analysts’ expectations by an impressive $1.95 billion. The Data Center segment, driven by demand for Nvidia’s AI chips, was the standout contributor, generating $30.8 billion, a 112% increase compared to the prior year. On the bottom line, adjusted EPS came in at $0.81, surpassing forecasts by $0.06.

Looking ahead to the January quarter (FQ4), Nvidia guided for revenue of $37.5 billion, plus or minus 2%, slightly ahead of the market’s $37.1 billion forecast, continuing its trend of beat-and-raise displays.

You can bet Fisher must be pleased with all that. He bought 3,283,380 NVDA shares in Q3, worth $481.5 million at the current share price. With his ownership of 96.72 million shares, NVDA represents Fisher’s 3rd biggest holding.

The AI colossus also has a fan in Craig Hallum analyst Richard Shannon, who sees Nvidia holding onto its dominant position for now.

“We continue to look for potential impact from merchant and in-house accelerators, but still do not see it,” Shannon explained. “NVDA’s position in the supply chain and software ecosystem prevents too much movement away from their ecosystem in at least the next few quarters. With a one-year cadence that should drive continual hardware performance and a full-stack system, we don’t see a major shift away at this time,” Shannon opined.

Quantifying his stance, Shannon rates NVDA shares a Buy while his $175 price target (increased from $165), suggests the stock will gain another 23% in the year ahead. (To watch Shannon’s track record, click here)

Not many on the Street are arguing with that take. NVDA claims a Strong Buy consensus rating, based on a mix of 39 Buys vs. 3 Holds. At $174.87, the average price target is practically the same as Shannon’s. (See NVDA stock forecast)

Microsoft

Nvidia is currently top of the market cap pile but not that long ago that spot belonged to Microsoft, one of the most influential tech companies in the world, and one which has had a big part in shaping the current digital landscape. Microsoft revolutionized personal computing with its Windows operating system, which remains a cornerstone of its business. Over the years, the company has diversified its offerings, from the ubiquitous Microsoft Office to its Xbox gaming consoles, cloud computing through Azure, and various other endeavors.

More recently, AI has become a big focus. The company has integrated AI across its ecosystem, from smarter features in Office tools like Excel and Word to advanced cloud AI services through Azure. Microsoft is also a significant player in generative AI, with its investment in OpenAI (the creators of ChatGPT) and the incorporation of OpenAI’s technology into products like Microsoft 365 Copilot.

However, concerns around slowing growth for its Azure cloud service have tainted the stock’s performance in recent times, which has lagged the broader markets this year.

Nevertheless, the company has still been able to deliver strong performances, as was evident in the September quarter readout. Revenue climbed by 16.1% year-over-year to $65.59 billion, thereby beating the Street’s forecast by $1.03 billion. At the other end of the scale, EPS of $3.30 beat analyst expectations by $0.19.

Meanwhile, Fisher has been keeping the faith. He loaded up on 636,713 shares in Q3, a stake currently valued at almost $262.8 million. MSFT shares account for Fisher’s 2nd biggest holding (27.9 million shares).

The company also has a fan in Wedbush analyst Daniel Ives, who highlights the AI work as a key for the bull case.

“MSFT has started focusing on building an agentic world that translates into real-time business outcomes with organizations able to securely build, deploy, and scale AI agents that support multiple models with built-in enterprise-grade security as more organizations look to leverage AI for mission-critical applications across user ecosystems with improved quality and faster responses,” Ives explained. “We believe this is the next step on the AI strategic vision for Microsoft and would not be surprised to see an accelerated M&A strategy to help drive this next software stack layer of its AI platform.”

“While there remains plenty of Street skeptics on this stalwart, we believe that MSFT remains in the driver’s seat in this AI Revolution as the company continuously adapts its product portfolio to generate elevated use cases for its tech stack leading to accelerated adoption of its growing ecosystem,” the analyst went on to add.

Conveying his confidence, Ives rates MSFT as Outperform (i.e., Buy) while his $550 price target suggests the stock will gain ~32% over the one-year timeframe. (To watch Ives’ track record, click here)

Overall, among the 30 most recent analyst ratings, 27 are bullish, while only 3 remain cautious with Hold ratings, culminating in a Strong Buy consensus. The shares are expected to appreciate by 19% in the months ahead, considering the average target clocks in at $496.84. (See MSFT stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.