There may be no more important business leader these days than OpenAI CEO Sam Altman.
Altman's company kicked off the artificial intelligence (AI) boom with the launch of ChatGPT in November 2022, and since then it's remained at the cutting edge of generative artificial intelligence.
It's received an estimated $13 billion in investments from Microsoft and forged a close partnership with the tech giant, powering AI on products like Azure, Github, and Office. OpenAI has also continued to impress with its own products such as Dall-E, a text-to-image generator, and Sora, a text-to-video generator, in addition to ChatGPT.
Prior to serving as OpenAI CEO, Altman led Y Combinator, the Silicon Valley start-up incubator, and he's made a number of successful investments in start-ups through various funds that have helped him become a billionaire. Keep reading to see four stocks Altman has invested in.
Image source: Getty Images.
1. Reddit
Probably the best known of Altman's investments is Reddit (NYSE: RDDT). The social media company revealed Altman to be a major investor in its initial pubic offering (IPO) paperwork. His stake was estimated to be worth $600 million after Reddit's post-IPO pop.
Altman knows Reddit well. He previously served on the company's board and was even its CEO for eight days. He also said in 2014 when he announced his investment in Reddit that he had been a daily Reddit user for the last nine years and got to know Reddit's founders at Y Combinator.
OpenAI also used Reddit's content to train its AI models, and Reddit has sold itself on its AI potential as it believes it has a competitive advantage in AI training data.
Altman clearly knows the company well and, thus far, his investment has paid off.
2. Airbnb
Altman is good friends with Airbnb (NASDAQ: ABNB) CEO Brian Chesky. The two consulted on various initiatives in the past, and Chesky came to Altman's defense when he was briefly fired as OpenAI's CEO.
Altman invested $100,000 in Airbnb in 2008 when the company was in its short-term rental infancy.
It's unclear what the current status of Altman's investment is, but it's paid off handsomely for the OpenAI CEO even if he already sold it. Airbnb continues to grow the top line and generates a wide operating margin, a sign of its competitive advantage.
Today, Airbnb has a market cap of $106.8 billion and is the clear leader in its market.
3. Uber
Altman was also an early investor in Uber (NYSE: UBER), putting $100,000 into the ride-sharing app and recognizing the potential for an app-based transportation marketplace.
In a blog post in 2014, Altman argued that Uber was undervalued because it often presents a more affordable alternative to car ownership.
He also frequently uses Uber, showing he's a fan of both the products and the business.
Like Airbnb, investing in Uber in its early days has paid off handsomely. The company now has a market cap of $162 billion, and it dominates the global ride-sharing industry.
4. Asana
It's clear Altman is a fan of marketplaces like Airbnb and Uber, and he's also an investor in Instacart and DoorDash, but the OpenAI chief has made a few investments in software companies like Asana (NYSE: ASAN), which specializes in collaboration and project management tools.
Altman was the lead investor in Asana's $50 million Series C round in March 2016 and also participated in the follow-up $75 million investing round in January 2018.
At the time of his first investment, Altman argued that Asana solved a lot of the communication problems in business such as giving clear tasks and goals and having clear and frequent measurements. He also predicted that Asana could someday massively increase the productivity of hundreds of millions of people around the world.
Asana has been a disappointment as a publicly traded company thus far and is now trading below its $27 IPO price.
Which Altman stock is the best buy now?
Of the four stocks above, Airbnb seems the best bet for long-term returns. The company continues to deliver steady growth in its core travel business. Its margins are strong and expanding, and the travel specialist has responded to customer complaints about things like cleaning fees and chore lists to make the platform stronger.
Airbnb CEO Brian Chesky has also teased new products, saying the company would move beyond the core, which could open up Airbnb to new revenue streams.
Uber has also made an impressive comeback over the last two years, benefiting from cost cuts and the economic reopening.
Asana is still unprofitable and its stock has underperformed, and Reddit could be overheating after a promising IPO.
Even the OpenAI CEO can't be right every time, but he spotted the promise of new marketplaces like Airbnb and Uber over a decade ago. Today, they remain outstanding businesses.
Should you invest $1,000 in Reddit right now?
Before you buy stock in Reddit, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Reddit wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 25, 2024
Jeremy Bowman has positions in Airbnb. The Motley Fool has positions in and recommends Airbnb, Asana, DoorDash, and Uber Technologies. The Motley Fool has a disclosure policy.
