Google Grabs Attention, But Funds Go Crazy For This 'Pick-And-Shovel' AI Stock

The best mutual funds continue to pour money in search and AI powerhouse Alphabet (GOOGL). After scooping up just over $8 billion worth of Google stock last month, top performing money managers invested another $9.78 billion into Alphabet.

Aerospace leader AAR Corp (AIR) also maintained its altitude on the list. Savvy investors loaded up on another $12.94 billion of AIR stock after pumping in $11.37 billion in the prior report. But the most magnificent return to the list comes from ASML (ASML).

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ASML stock once again etched its name squarely at the top of this month’s screen, raking in an eye-popping $21.57 billion. That comes after the world’s sole provider of Extreme Ultraviolet (EUV) lithography machines pulled in $19.78 million in last month’s report. Clearly, Wall Street appreciates the integral position ASML has established within the semiconductor industry. The company is considered a bellwether “pick-and-shovel” AI stock for its unique and essential role in creating the foundational technology needed to manufacture advanced AI chips.

Note that the table and links below highlight just a portion of this month’s new buys and sells by top funds.

• New Buys By The Best Mutual Funds
• Latest Sells By The Best Mutual Funds

Click here to see all the stocks on the list.

Note: The New Buys list includes only new buys of the mutual funds rated from A+ to B- based on 36-month performance before screening for other proprietary criteria. The Latest Sells list tallies the number of top funds that were net sellers of each stock with ratings ranging from A+ to B+ in the fund’s latest reporting period. Because some funds bought the same stocks sold by others, we also looked at the total number of buyers of each stock.

ASML Stock Leads The Magnificent Dozen

Including ASML, Alphabet and AAR Corp, a total of 12 stocks saw capital inflows of at least $1 billion in the latest report on new buys by the best mutual funds.

Spurred by demand for AI data centers, HVAC specialist Comfort Systems (FIX) pulled in a cool $4.95 billion. That comes after $3.41 billion flowed into the stock in the prior month’s report.

Another company tapping into demand driven by AI data centers is Texas Pacific Land (TPL), which has data centers that are a key pillar of its long-term growth strategy. Top funds poured an impressive $9.11 billion into the company according to the latest screen.

Top money managers also targeted aerospace and defense stock Karman (KRMN). They scooped up $2.04 billion worth of shares. In late January, the Missile Defense Agency selected Karman and Redwire (RDW) of its Scalable Homeland Defense Initiative Enterprise Layered Defense (SHIELD) initiative.

Big Pharma juggernauts Johnson & Johnson (JNJ) and Merck (MRK) also made the billion-dollar club. The best mutual funds picked up $1.49 billion worth of JNJ stock and $1.41 billion worth of Merck.

These institutional investors also poured their precious dollars into precious metals, investing $1.56 billion into Royal Gold (RGLD). They also took more than a sip of Monster Beverage (MNST), putting up $1.54 billion in the energy drink maker.

Rounding out the billion-dollar club, data storage leader Micron Technology (MU) took in $1.19 billion, while semiconductor foundry king Taiwan Semiconductor (TSM) pulled in $1.1 billion.

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The Best Mutual Funds Target These Sectors

The broad oil & gas sector led the latest screen. Including Texas Pacific Land, Baker Hughes (BKR) and** CNX Resources** (CNX), 18 companies from that broad sector made the cut.

Three sectors each featured 13 companies: oil and gas, machinery, and semiconductors, which includes fabless chip designers, equipment makers and chip manufacturers. Led by Royal Gold, the mining sector showcased 12 stocks.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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