On Wall Street, success sometimes comes down to following the right guidance. In a market shaped by uncertainty and shifting trends, investors look to those with a proven record of navigating the ups and downs. Few embody that reputation more than Steve Cohen, whose hedge fund, Point72 Asset Management, oversees roughly $35 billion in assets and whose personal wealth exceeds $20 billion.
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It’s precisely Cohen’s track record that makes his perspective on emerging themes so influential – and right now, one area he’s zeroing in on is artificial intelligence. AI has been the talk of Wall Street for some time, but this isn’t just another passing craze destined to be replaced by the next big fad.
“This is a 10- to 20-year theme. It’s gonna affect everybody in how they conduct their lives, how they do their business. We’re still in the first, second inning of something that’s going to be transformational for the economy and the world… It is such a dramatic, important shift that to ignore it, I think it’s a mistake,” Cohen opined.
That conviction is reflected in his portfolio moves. Recently, Cohen’s fund greatly expanded its holdings in two AI giants – Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT). Both of these Magnificent 7 tech leaders are at the forefront of AI innovation, and Cohen spent heavily to build larger stakes. Let’s give these stocks a closer look, and see where they stand today.
Nvidia
We’ll start with Nvidia, the largest semiconductor company in the world – and the largest company on Wall Street. We’ve all seen the news in recent years about Nvidia’s extraordinary share price gains – the stock is up 1,280% over the past 5 years, with the gains powered by the company’s success in meeting the needs of the fast-growing demand for AI-capable chips and data center servers. On July 10, the company’s market cap closed above the $4 trillion mark for the first time, making Nvidia the first firm ever to reach that milestone. As of now, Nvidia currently boasts a market cap valuation of $4.27 trillion.
Earlier this year, Nvidia made waves with the release of its Blackwell Ultra chip, a step up in its AI-capable Blackwell line. Blackwell Ultra offers a 1.5x increase in performance over the earlier chips in the line, and an impressive 50x performance increase over the older Hopper series. The new chip is designed to meet the needs of reasoning AI models, and like its immediate predecessor, can slot into Nvidia’s existing GB300 NVL72 rack servers.
The company’s successes underscore Nvidia’s strength to withstand the volatility that has characterized US markets in early 2025. During fiscal Q1 2026, which ended April 27, Nvidia recorded a $4.5 billion charge tied to U.S. export restrictions on shipments of its H20 AI chips to China. More recently, however, the outlook has improved: in August, the U.S. Commerce Department began issuing export licenses for H20, easing restrictions and reducing Nvidia’s projected revenue hit for Q2 by about $1 billion compared to earlier estimates.
Meanwhile, the company’s fiscal 1Q26 results underscore just how powerful demand remains. Nvidia reported $44.1 billion in revenue, implying a 69% year-over-year increase and beating the estimates by $813 million. Nvidia’s data center revenue, which is closely tied to AI, made up $39.1 billion of the total, for a 73% year-over-year gain. At the bottom line, Nvidia reported earnings of 81 cents per share in non-GAAP measures, 6 cents better than had been forecast.
Nvidia is scheduled to release its fiscal 2Q26 results on August 27, and the Street is expecting the company to report revenues of nearly $46 billion. That would represent a year-over-year increase of 53%.
It’s against this backdrop of sustained growth and renewed optimism that Steve Cohen has been building his position. His fund Point72 has held a stake in NVDA since 1Q23, and during the second quarter, the firm bought an additional 4,331,373 shares. This marked an increase of 208% in the hedge fund’s NVDA stake, which currently stands at 6,421,284 shares valued at $1.12 billion.
NVDA has also caught the attention of Cowen analyst Joshua Buchalter, whose bullish position is supported by the company’s strong products and high potential to increase earnings.
“Positive on NVIDIA, as we see strong fundamentals and a clean narrative (despite the chaos and distraction surrounding H20 and China) as the Blackwell-Blackwell Ultra handoff is transitioning rapidly and smoothly. We note NVIDIA is trading at a discount to Broadcom despite what we see as a cleaner set-up, and we believe remains the best and cleanest way to play AI… still. We leave our well-above Street $55B OctQ estimate unchanged, which we note does not include H20 revenue given timing/magnitude uncertainty. We also see upside to our above-Street 2026 estimates, well beyond adding back datacenter sales to China. At $150, investors were playing for $6 in C2026E; at $180 we think that number is closer to $7… and we expect NVIDIA to build visibility to that number over the next 2-3 quarters,” Buchalter opined.
To this end, Buchalter assigns NVDA a Buy rating, which comes along with a $235 price target, indicating the analyst’s confidence in a 34% gain over the coming year. (To watch Buchalter’s track record, click here)
And he isn’t alone. Nvidia sits at the very top of the Mag 7 when it comes to analyst enthusiasm. The stock has drawn 40 recent analyst reviews, with a split of 36 Buys, 3 Holds, and just 1 Sell – good for a Strong Buy consensus rating. (See NVDA stock forecast)
Microsoft
Next up is Microsoft, the world’s leader in the software industry – and the second-largest company on Wall Street. Microsoft boasts a market cap of $3.75 trillion, making it, along with Nvidia, one of just three US companies valued at over $3 trillion (Apple is the third). While Microsoft achieved this leadership position through the success of its Windows and Office software packages, the company has for several years been moving into the AI and cloud computing fields.
On AI, Microsoft was an early backer of OpenAI, which made headlines back in 2022 when it launched the generative AI boom with the release of ChatGPT. Microsoft’s investment in OpenAI over the years has expanded to $13 billion, and stands to bring the company a solid return going forward.
Microsoft is reaping the gains of its early interest and backing in AI, by increasingly integrating the technology into its other products. Internally, Microsoft is using AI tech to streamline its customer service side – in the form of chatbots, call center automation, and contact data management and analysis. The company has also launched Copilot, an online AI assistant, and has incorporated Copilot into the recent versions of Windows and Office 365. More importantly for the bottom line, Microsoft has also added AI tech, tools, and services to its Azure cloud computing platform, which is one of the company’s fastest-growing revenue generators.
Azure, which was first launched in 2010, has become one of the online world’s largest and most popular subscription cloud computing platforms, competing head-to-head with AWS and Google Cloud. By bringing AI into the mix, Microsoft has expanded the capabilities of Azure’s tools and apps, building on the natural flexibility of cloud-based software.
When we turn to the financial results, we see the fruits of Microsoft’s successful software development. The company generated $76.4 billion in revenue in its last quarter, fiscal 4Q25, for an 18% year-over-year gain. Better yet, the revenues beat the forecast by $2.6 billion. Microsoft’s bottom line, reported as an EPS of $3.65, was up 24% year-over-year and came in 27 cents per share better than had been expected. Of particular note, we should point out that Microsoft’s Intelligent Cloud, the segment that includes the Azure platform, saw its revenues grow 26% year-over-year to reach $29.9 billion.
For his own part, Steve Cohen was impressed enough by Microsoft to have Point72 buy 967,725 shares during the second quarter this year. This brings the asset manager’s position in MSFT to a total of 2,437,022 shares, and marks a 66% jump in the stake. Currently, Cohen’s holdings in Microsoft are valued at $1.23 billion.
Truist analyst Terry Tillman shares that enthusiasm, pointing to Microsoft’s dominant positioning and long-term growth trajectory, underpinned by strong fundamentals, AI-driven expansion, and robust cloud momentum.
“We believe Microsoft’s cloud business is likely to continue driving momentum from several drivers with lasting impact, namely existing workloads migrating to Azure, digital native businesses scaling their business and benefits from growing number of AI workloads and use cases. What is interesting, in our opinion, are the revenue synergies and force multiplier effects to a broader set of Microsoft data, infrastructure and app software businesses likely to increasingly benefit from cloud and AI momentum. To name a few, Microsoft Fabric, Cosmos DB, PostgreSQL, AI Foundry to build agentic AI apps, Microsoft 365 Copilot, GitHub Copilot, Defender, Purview, etc. Taking into account our confidence on sustained business momentum, we have increased FY26 and FY27 segment-level revenue and total revenue growth assumptions, along with higher operating profit and cash flow estimates. We believe a solid upside case to our updated and consensus estimates exists as well,” Tillman said.
Looking ahead, Tillman explains why investors should buy into the stock now, adding, “We believe premium valuation is justified owing to the company’s picks and shovels status in the rapidly evolving AI landscape while sustaining strong commercial bookings, RPO, cloud and Azure growth rates over a long-term basis.”
These comments back up Tillman’s Buy rating on MSFT shares, and his $675 price target implies an upside of ~34% on the 12-month horizon. (To watch Tillman’s track record, click here)
All in all, there are 33 recent analyst reviews on record for Microsoft, and their lopsided split of 32 Buys to 1 Hold gives the stock its Strong Buy consensus rating. (See MSFT stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.