As artificial intelligence (AI) continues to generate headlines (quite literally) and build wealth for investors, the industry is attracting investors from both sides of the aisle. That's with good reason, as the AI revolution won't be restricted to the tech sector, says BlackRock Global Chief Investment Strategist Wei Li - who recently explained that AI will make a significant impact in sectors like healthcare, financials, and industrials, among others. The proverbial “picks and shovels” of the industry are still semiconductor chips, with forecasts calling for massive market expansion.
And while the two parties might not agree on much else, politicians from both sides of the aisle are becoming significant investors in the AI ecosystem. Most recently, big trades by former Speaker of the House and current Rep. Nancy Pelosi (D-CA) have grabbed headlines, along with some purchases made by the similarly outspoken Rep. Marjorie Taylor Greene (R-GA). Let's have a closer look at their recent AI trades.
Nvidia, Broadcom Are Pelosi's AI Picks
Both Nvidia (NVDA) and Broadcom (AVGO) have been top beneficiaries of the market's bet on AI, with NVDA even briefly occupying the spot of being the most valuable company in the world by market cap.
Founded in 1993, Nvidia provides AI enterprise solutions, develops graphics processing units (GPUs) for the gaming and professional graphics market, manufactures hardware components, and offers software platforms for AI development and high-performance computing. Based out of Santa Clara, the Jensen Huang-led company commands a mammoth market cap of $3.15 trillion.
Nvidia stock has had a stellar run in 2024 so far, rallying 163.5% on a YTD basis. The stock also offers a modest dividend yield of 0.02%.
On June 26, Pelosi - a longtime fan of the GPU giant - purchased 10,000 shares of Nvidia, with the stock trading around $126 on the day. NVDA is up about 3% since Pelosi's latest purchase.
Despite a much-discussed downgrade for Nvidia stock last week, analysts remain bullish overall on the AI leader. Out of 40 analysts covering the stock, 34 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 4 have a “Hold” rating.
Another recent AI stock purchase for Pelosi is Broadcom (AVGO). Founded in 1991 and based out of San Jose, Broadcom is a semiconductor and infrastructure software behemoth. They design, develop and supply various analog and digital integrated circuits and other related products. Broadcom's market cap currently stands at an impressive $812.67 billion.
AVGO stock is up 53% on a YTD basis, and it offers a dividend yield of 1.19%.
Pelosi's June 24 bet on Broadcom took place shortly before the stock's 10-for-1 split, set to take effect at the start of next week's trading.
However, Pelosi didn't make a direct purchase of the company's stock. Instead, she bought 20 call options on AVGO with a deep in-the-money strike price of $800 and an expiration date of June 20, 2025. With a delta around 95%, these LEAPS calls gain almost point-for-point with AVGO stock.
On Wall Street, analysts have deemed AVGO stock a “Strong Buy,” with a mean target price of $1,834.43, which indicates an upside potential of about 7.2% from current levels. Out of 32 analysts covering the stock, 29 have a “Strong Buy” rating - up from 23 a few months ago - and 3 have a “Hold” rating.
MTG Buys CrowdStrike, ASML
Rep. Greene is no stranger to the AI trade, having recently scooped up shares of OpenAI's best-known backer, Microsoft (MSFT). But while Pelosi's late June trades skewed heavily toward U.S. mega-cap favorites, MTG - who sits on the Homeland Security Committee - opted for names that are key to the conversation around cybersecurity, China, and semiconductor manufacturing.
Founded in 2011, CrowdStrike Holdings (CRWD) is a leading cybersecurity company providing a cloud-native security platform called Falcon. Falcon protects endpoints, workloads, cloud environments, and data from cyberattacks. The company's market cap currently stands at $95 billion.
CRWD stock has risen 51% on a YTD basis, and is up 167% year over year.
On June 24 - the same day that CrowdStrike was added to the S&P 500 Index ($SPX) - Greene purchased CRWD stock worth up to $15,000, with the shares settling at $377 on the day.
The stock is up about 2.4% since then, and earlier today, CRWD set a new high of $398.33 - a slight premium to its mean price target of $395.51. Out of 41 analysts covering the stock, 35 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating and 3 have a “Hold” rating.
Also on June 24, Taylor Greene loaded up on ASML shares worth up to $15,000, on a day when the stock closed at $1,002. ASML is up about 6% since then.
Established in 1984 as a joint venture between Dutch companies Philips and ASM International, ASML Holdings (ASML) is the world's leading manufacturer of photolithography systems, essential tools for creating tiny circuits on computer chips. Their systems use light to etch intricate patterns onto silicon wafers, forming the foundation of modern electronics.
The company currently commands a market cap of $425.1 billion, and due to its near-monopoly in its niche, ASML has found itself as the center of rising global trade tensions with China - adding an extra layer of interest to recent political trading in the name.
ASML stock is up 40% on a YTD basis, and it offers a dividend yield of 0.52%.
Analysts have a consensus rating of “Strong Buy” for ASML stock, which has traded above its mean target price of $1,086.86 as recently as Monday. Out of 18 analysts covering the stock, 15 have a “Strong Buy” rating and 3 have a “Hold” rating.
