summary：
Alright, let's dissect this Soros situation. The narrative is simple: Billionaire investor... Alright, let's dissect this Soros situation. The narrative is simple: Billionaire investor, famously cautious about AI, suddenly buys big into Amazon (AMZN) and Alphabet (GOOGL), two of the Magnificent Seven swimming deepest in the AI pool. The question everyone's whispering is: "Has Soros changed his tune, or is there something else going on?"
The AI Paradox
Soros' initial stance, as reported, was "instinctively opposed to A.I." because of its potential to strengthen closed societies. A valid concern, given his history of backing open societies. But then his fund—Soros Fund Management—pumps hundreds of millions into AMZN and GOOGL in Q3. Specifically, they added 1,843,329 AMZN shares, bringing their total to 2,226,187 (a $504 million stake), and scooped up 631,397 GOOGL shares, now holding 658,367 total (a $210 million position). AMZN and GOOGL: Billionaire George Soros Pulls the Trigger on 2 ‘Magnificent 7’ Stocks
So, what gives?
One possibility is timing. Soros voiced his AI concerns over two years ago. That's an eternity in tech. Maybe the fund simply sees an opportunity to profit from the AI frenzy (it's hard to ignore the Nvidia (NVDA) effect, right?). Or maybe the people managing the fund are more bullish on AI than Soros himself. He remains chairman, but doesn't "actively run" things.
It's also crucial to consider the "Strong Buy" analyst consensus on both stocks. Laura Martin at Needham is particularly bullish on Amazon, citing their GenAI initiatives and "best in class eCommerce data." Her $265 price target suggests a 17% upside. Susquehanna analyst Shyam Patil is equally positive on Alphabet, pointing to their AI advancements and "shareholder-friendly capital allocation." His $350 target suggests a 10% gain.
But here's where my skepticism kicks in. These analyst ratings are based on potential, not guaranteed returns. And while both companies are undeniably AI leaders, their valuations already reflect a lot of that baked-in potential. Arete recently increased its price target for GOOGL stock price from $220 to $300, but that still suggests a potential downside of almost 5% from where the stock is currently trading.
The Nvidia Shadow
And there's the Nvidia (NVDA) elephant in the room. While AMZN and GOOGL are investing heavily in AI, Nvidia is essentially selling the picks and shovels of this gold rush. Their GPUs are the industry standard, and everyone from Meta to OpenAI is clamoring for them.
The article mentions Meta (META) is in talks to use Google's TPUs (tensor processing units) in their data centers by 2027, and might even rent chips from Google Cloud next year. This could be a significant win for Google. Meta's projected capex spending of "$100 billion for 2026" implies they'll be spending "at least $40-$50 billion on inferencing-chip capacity next year."
But let's be real: Nvidia isn't going to cede its dominance easily. The article notes that Nvidia shares dipped on the news of the Meta-Google discussions, but Alphabet stock rose. The market is clearly weighing the potential impact of this shift.
And this is the part of the report I find genuinely puzzling. The article states that IsuPetasys Co., which supplies multilayered boards to Alphabet, jumped 18% in early trading. MediaTek Inc. shares rose almost 5%. This suggests that the market views Google's AI chip initiative as a serious threat to Nvidia's position. But I'm not entirely convinced. The devil is always in the details.
One other point: The article mentions that Alphabet closed "above a record north of $300 for the first time ever." That's directionally correct, but imprecise. The stock actually closed around $315.
Soros's Wager: A Hedge, Not a Conversion
So, is Soros a convert to the AI religion? I doubt it. My analysis suggests this is more likely a calculated hedge. Soros Fund Management is betting that even if AI poses societal risks (Soros' initial concern), the companies leading the charge will still generate significant profits (the fund's primary concern). It's a classic "if you can't beat 'em, join 'em" strategy, but with a Soros twist: acknowledge the potential downsides while still capitalizing on the upside.
The question is, is it too late? The AI rally has already been in full swing for months. Are AMZN and GOOGL still undervalued, or are they already priced for perfection? Only time (and future earnings reports) will tell.