Paul Tudor Jones: AI Bull Market Has More Room to Rise — 2 Stocks to Watch

Insights from Paul Tudor Jones on AI Stock Growth

Paul Tudor Jones, a renowned hedge fund manager known for predicting the Black Monday crash of 1987, recently shared his thoughts on the future of artificial intelligence (AI) stocks with CNBC. According to Jones, the current rally in AI stocks is far from over and could continue for another year or two. He has even added to his AI positions, although he did not specify which stocks or assets he has invested in. His comments suggest that there is still significant potential for growth in this sector.

Jones also warned that when the AI stock movement eventually comes to an end, the decline could be substantial. This insight highlights the importance of timing and strategy when investing in AI stocks. For investors looking to capitalize on this trend, now might be a good time to consider adding AI-related stocks to their portfolios.

Key AI Stocks to Watch

As the AI market continues to evolve, certain companies are well-positioned to benefit from the ongoing technological advancements. Here are two stocks that could see significant growth in the near term:

1. Microsoft

Microsoft (NASDAQ: MSFT) has been a key player in the tech industry for decades. While the company has lagged behind some of its big tech peers in recent times, it remains a strong contender in the AI space. Concerns about AI tools replacing software have raised questions about Microsoft’s future, but the company’s deeply integrated systems and its use of AI within its software should keep customers engaged. In fact, AI could enhance the performance of Microsoft's software in the long run.

Microsoft’s cloud business, Azure, is also benefiting from the AI boom. In the most recent quarter, Azure and other cloud revenue surged by 40%. This growth indicates that AI is a significant opportunity for Microsoft. The company offers a balance of a well-developed earnings machine and potential bursts of growth, thanks to its involvement in technologies like AI and quantum computing. At 24x forward earnings estimates, Microsoft presents a compelling investment opportunity.

2. Amazon

Amazon (NASDAQ: AMZN) has emerged as a major player in the AI revolution. The company uses AI across its e-commerce operations to improve efficiency and boost earnings. However, the more significant story is Amazon's role in developing and selling AI products and services through its cloud computing division, Amazon Web Services (AWS).

AWS provides customers with everything they need to advance their AI programs, including chips, networking equipment, and a fully managed service called Amazon Bedrock. This has led to tremendous growth, with AWS reaching an annual revenue run rate of $150 billion. Additionally, Amazon designs its own chips, which have seen high demand. The chip business, including in-house designed chips, has reached an annual revenue run rate of $20 billion.

Amazon’s AI strengths position it well for continued growth in the coming quarters. The stock currently trades at 31x forward earnings estimates, which is reasonable given the company’s track record of growth and potential for success in the AI market.

A Second Chance at a Lucrative Opportunity

For investors who feel they may have missed out on the most successful stocks, there is still an opportunity to catch up. Our expert team of analysts occasionally issues “Double Down” recommendations for companies that show strong potential for growth. If you're worried about missing your chance, now could be the best time to invest before it's too late.

Historical data shows the power of these recommendations. For example, if you had invested $1,000 when we recommended doubling down on Nvidia in 2009, you would have seen a return of $548,603. Similarly, investing $1,000 in Apple in 2008 would have resulted in $54,734, and a $1,000 investment in Netflix in 2004 would have grown to $475,926.

Currently, we are issuing “Double Down” alerts for three incredible companies, available to members of Stock Advisor. These opportunities may not come around again soon, so it's worth considering joining the program to stay informed.