Bill Gates’ former company, Microsoft (NASDAQ: MSFT), would certainly be a top choice among AI stocks for him to consider investing in. It is likely a staple in the portfolios of many AI enthusiasts.
As of the end of December, the Bill & Melinda Gates Foundation Trust had allocated $42.3 billion to U.S.-listed companies, as reported in the charity’s 13F filing. Among the 24 holdings, Microsoft represented a significant portion, comprising one-second of the fund’s assets.
This implies that the average market value of the remaining 23 stocks was approximately $1.2 billion, a substantial amount albeit significantly less than the investment in MSFT.
Within the remaining portfolio, the three largest positions were in Berkshire Hathaway (NYSE: BRK.B), Canadian National Railway (NYSE: CNI), and Waste Management (NYSE: WM). Among these, Berkshire Hathaway stands out as an AI-related stock due to its substantial stake in Apple (NASDAQ: AAPL).
Among the other 20 investments, three companies stand out for their utilization of AI technology and potential as long-term holdings.
Schrodinger (SDGR)
Schrodinger (NASDAQ: SDGR) is the smallest of the trio of AI stocks, with a market capitalization of $1.91 billion, representing 0.60% of the foundation’s holdings.
The company’s AI-driven platform aids drug companies in selecting optimal molecules for their therapies, with a client base that includes the top 20 pharmaceutical firms in the U.S.
Schrodinger generates revenue by licensing its software to companies in the fields of materials design and life sciences, boasting an international clientele of approximately 1,785 entities. In 2023, the company recorded \(159.1 million in software revenue, with 54 clients spending over \)500,000 on its platform. Notably, its technology revenue surged by 17.4% over the past year.
Additionally, Schrodinger earns from its proprietary drug discovery programs, which brought in \(57.5 million in revenue in 2023, up from \)45.4 million the previous year.
With its software’s high gross margins of 87%, Schrodinger reported a profit of \(40.7 million in 2023, a significant improvement from a \)149.2 million loss. The company anticipates a 9.5% growth in technology revenue in 2024, positioning it well for the future.
Deere & Co. (DE)
Deere & Co. (NYSE: DE) is the second-largest holding among the AI stocks, boasting a market capitalization of $111.02 billion, representing 3.3% of the foundation’s assets.
Although DE stock was recommended in March 2023 as a top AI stock to watch over $100, its performance has been modest, with just a 1.5% gain over the past year. However, its five-year annualized return is impressive at 21.8%, outperforming both the U.S. industry and its peers in agriculture and heavy machinery.
Deere has been at the forefront of agricultural innovation since the 1990s, with a focus on implementing machine learning and machine vision technologies to empower farmers in decision-making and enhance agricultural practices for a growing global population.
Despite recent challenges, Deere’s historical performance suggests it may regain momentum, much like it did in 2020.
Danaher (DHR)
Danaher (NYSE: DHR) is the largest of the three AI stocks, boasting a market cap of $183.73 billion and accounting for 0.2% of the charity’s holdings.
While not the smallest investment, Danaher’s stock has experienced fluctuations, dropping from nearly \(300 in September 2021 to a low of \)182.09 in October. However, the company has shown resilience over the past five years.
Danaher, like other businesses in its sector, leverages AI in areas such as predictive modeling and machine learning. The company’s Chief Technology Officer, William Blake, emphasized the role of artificial intelligence in advancing the life sciences industry, particularly in scaling biotech firms and expediting the development of innovative treatments.
Danaher’s commitment to integrating AI technologies into its operations positions it as a key player in the adoption of AI in the industry.
In conclusion, these three AI stocks offer unique opportunities for investors seeking exposure to cutting-edge technologies and innovative solutions in their portfolios.
