Tesla CEO Elon Musk Highlights Alphabet and Nvidia as Top Tech Stocks

TLDR

• Elon Musk named Google and Nvidia as his top stock recommendations during a podcast with Nikhil Kamath on November 30
• The Tesla CEO cited AI and robotics as driving factors behind both companies’ future value potential
• Alphabet stock climbed 16% in November following strong earnings and Warren Buffett’s investment through Berkshire Hathaway
• Google launched its updated Gemini chatbot and entered talks with Meta Platforms for AI chip sales
• Nvidia stock declined 15% in November but maintains a forward P/E of 23, lower than Alphabet’s current ratio

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Elon Musk broke from his usual pattern of avoiding stock recommendations to name two companies he believes will lead the AI revolution. The billionaire entrepreneur shared his thoughts during a November 30 appearance on the “People by WTF” podcast.

Musk spoke with Nikhil Kamath, co-founder of Indian financial services company Zerodha and asset manager True Beacon. During their discussion, he identified Google parent company Alphabet and chipmaker Nvidia as standout investment opportunities.

The SpaceX and Tesla CEO doesn’t maintain an investment portfolio outside his own ventures. However, he made exceptions for these two Magnificent 7 companies based on their AI capabilities.

Google’s AI Foundation

Alphabet Inc., GOOGL

Alphabet operates Google’s search engine, YouTube, and various cloud computing services. The company has invested heavily in AI research and development over recent years.

November proved strong for Alphabet stock, which rose 16% during the month. The gain made it one of the top performers on the Nasdaq Composite index.

Third-quarter earnings showed a 35% increase and exceeded Wall Street expectations. Warren Buffett’s Berkshire Hathaway purchased Alphabet shares in the third quarter, adding credibility to the stock’s momentum.

Google released an improved version of its Gemini chatbot to compete with ChatGPT. Media reports indicated Meta Platforms discussed purchasing Google’s Tensor Processing Units for AI applications.

Alphabet stock has gained 66% year-to-date. The company trades at a price-to-earnings ratio of 31, considered reasonable compared to other tech giants.

Nvidia’s Market Position

Nvidia stock dropped 15% in November as investors questioned its valuation. The decline brought its forward price-to-earnings ratio to 23, below Alphabet’s current multiple.

NVIDIA Corporation, NVDA

Despite November’s pullback, Nvidia remains up 37% for the year. The company supplies AI chips to major technology firms developing machine learning systems.

Musk emphasized that companies working in AI, robotics, and spaceflight would represent “overwhelmingly almost all of the value” in future markets. Both Google and Nvidia fit this framework through their work in artificial intelligence infrastructure and applications.

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