TLDR
- Elon Musk recommended Alphabet and Nvidia stocks during his November 30 podcast appearance with entrepreneur Nikhil Kamath
- Musk stated he doesn’t typically invest in stocks but believes AI and robotics companies will dominate future markets
- Alphabet shares rose 16% in November after posting 35% earnings growth and receiving investment from Berkshire Hathaway
- Nvidia stock fell 15% in November despite year-to-date gains of 37% as investors reassessed valuations
- Both companies trade at competitive price-to-earnings ratios, with Nvidia’s forward P/E at 23 and Alphabet’s at 31
Elon Musk revealed his preferred stock investments outside his own companies during a recent podcast discussion. The tech billionaire named two artificial intelligence leaders as his top picks for future growth.
Musk joined Nikhil Kamath on the “People by WTF” podcast on November 30. Kamath co-founded Zerodha, an Indian financial services firm, and runs the asset management company True Beacon.
The conversation turned to investment strategy, where Musk acknowledged his limited involvement in stock markets. “I don’t really buy stocks,” he explained. “I’m not like an investor. I don’t have a portfolio or anything.”
Despite avoiding traditional investing, Musk identified two Magnificent 7 companies worth attention. Both operate in sectors he considers critical for future economic growth.
“AI and robotics are going to be very important,” Musk said during the podcast. He predicted these industries would generate more value than traditional business sectors.
Alphabet’s AI Advantage
Musk’s first recommendation was Alphabet, the parent company of Google and YouTube. “Google is going to be pretty valuable in the future,” he stated. “They’ve laid the groundwork for an immense amount of value creation from an AI standpoint.”
Alphabet demonstrated strong performance throughout November. The stock jumped 16% during the month, ranking among the best performers on the Nasdaq Composite.
Third-quarter results showed earnings climbing 35% above analyst predictions. The financial performance attracted attention from legendary investor Warren Buffett, whose Berkshire Hathaway added Alphabet shares to its portfolio.
Google launched an enhanced version of its Gemini chatbot system. The upgrade positions Google to challenge OpenAI’s ChatGPT in the conversational AI market.
Reports surfaced that Meta Platforms entered discussions with Google about purchasing Tensor Processing Units. These specialized AI chips could power Meta’s machine learning initiatives.
Alphabet stock has surged 66% year-to-date. The company maintains a price-to-earnings ratio of 31, which analysts consider attractive relative to other major tech stocks.
Nvidia’s Chip Leadership
Musk’s second choice was Nvidia, the leading manufacturer of AI processing chips. “Nvidia is obvious at this point,” he told Kamath during their discussion.
He expanded on why AI-focused companies would control future wealth creation. “Companies that do AI and robotics, and maybe spaceflight, are going to be overwhelmingly almost all of the value,” Musk said. “The output of business services from AI and robotics is so high that it will dwarf everything else.”
Nvidia experienced a 15% decline in November. Investors raised concerns about the company’s valuation after months of rapid gains.
The selloff reduced Nvidia’s forward price-to-earnings ratio to 23. This valuation sits below Alphabet’s current trading multiple, potentially making it more attractive to value-focused investors.
Nvidia stock remains up 37% for the year. The company supplies graphics processing units to technology firms building large language models and neural networks.
Musk’s framework for identifying valuable companies centers on their involvement in AI, robotics, and space technology. Alphabet and Nvidia both meet these criteria through their investments in artificial intelligence infrastructure and research.
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