10 Best Stocks To Buy According to Billionaire Armitage

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4. Nvidia (NASDAQ:NVDA)

Stake Value: $854.59 million

Number of Shares: 3,741,971

Percentage of Portfolio: 8.7%

Armitage bought Nvidia early this year after missing its first big move, and it has grown into a top-ten holding. Two developments changed his mind. Evidence of real AI value had built up, including Anthropic adding $5 billion of annualized revenue in six weeks, and the shares had de-rated from 35 times forward earnings to 23 times.

He told Nicolai Tangen that he is neither a physicist nor a coder, but wants to feel he can understand why Nvidia might succeed. That means working through its economics. Memory cost inflation matters because of its effect on the bill of materials at a company earning gross margins near three-quarters.

His thesis rests on supply. Demand exceeds supply through 2027, management guides to strong sales growth next year, and he expects its share of AI chip spending to slip only gradually. He regards the circular financing around customers as rational and carefully sized. At about 15 times estimated 2027 earnings, he calls the valuation highly attractive.

Beyond data centers, a look at how Nvidia is using AI growth to expand in autonomous driving covers a newer growth path.

3. Amphenol (NYSE:APH)

Stake Value: $902.74 million

Number of Shares: 10,708,713

Percentage of Portfolio: 9.19%

Armitage calls Amphenol a brilliant company that supplies into Nvidia, and he named it when asked how Egerton takes part in the AI boom. He said he does not like the concentration of the market in AI but finds it very powerful, and that so much of the US economy now keys off it that every portfolio ends up holding more of it than its manager expects.

The stock has been a regular contributor to the fund’s results. It helped in the first quarter and again in June, and it was the top contributor in a later monthly update, when Schroders credited increased confidence in AI demand. Armitage has called the connector and sensor maker more diversified than other AI plays, even though it is a core supplier to Nvidia.

That diversification fits a stated preference. He has said he likes being thematically diversified, a stance he called unfashionable, and he wants to understand the operating leverage that decides whether a business massively out- or underperforms expectations.

For a wider view of the sector, our list of the best AI infrastructure stocks for long-term investors is a good place to start.

2. Amazon (NASDAQ:AMZN)

Stake Value: $1.17 billion

Number of Shares: 4,714,127

Percentage of Portfolio: 11.96%

Amazon is one of the two hyperscalers Armitage says Egerton owns, and he has been candid that it has not been an easy holding. It weighed more than any other position on the portfolio in the first quarter, and it detracted again in a later month when investors argued over whether cloud providers will earn adequate returns on their capital spending.

His response has been to lean on the demand data. He cited management comments that most of the capacity for 2027 is already reserved and that demand for 2028 looks striking, and he noted that AI servers pay back in a little under three years. He has also argued that the hyperscalers are a core exposure whose market positions would end stronger if the smaller neocloud rivals suffered.

That contrast ties to his skepticism about valuing the neoclouds on earnings before interest, taxes, depreciation and amortization, since depreciation is their biggest cost. Armitage said he dislikes the market’s concentration in AI but finds it very powerful, which is why Egerton participates.

Another route to growth is covered in a piece on whether Amazon’s cash engines can fund its robotaxi bet.

1. Visa (NYSE:V)

Stake Value: $1.47 billion

Number of Shares: 4,079,226

Percentage of Portfolio: 14.93%

Visa is Egerton’s largest holding, and Armitage used it to illustrate how he thinks about modeling a company. He pointed to its margins of roughly 67%, saying the drivers of the top line and the costs are clear enough that mix effects matter far less than they do at businesses whose economics are private. That transparency lets him judge whether the valuation numbers underpinning the position still hold.

Those numbers were tested this year. Armitage said there was a time when the shares could hardly be given away, and that sticking with the position, rather than chasing the crowd at the point of maximum gloom, turned out to be fortunate, as the stock has since risen about 20%. A later Schroders monthly update listed it as a detractor on concerns about consumer health, a reminder that its revenue follows spending volumes. Egerton also owns Mastercard, giving it exposure to the broader payments network.

The pressure point for any payments leader is how much of each dollar flows back to large clients, an issue explored in our look at whether bigger client rebates are worth the valuation.

READ NEXT: Visa Trades at 24 Times Forward Earnings. Can Payment Growth Justify the Premium? and Amazon vs. Alphabet: Is GOOGL’s Cloud Growth Being Undervalued?

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