Billionaire Ken Griffin Increased Citadel's Position in This Nvidia Partner by 291%

No other company has benefited more from the artificial intelligence (AI) revolution than Nvidia. The company's compute and networking products are connected to just about every single application in generative AI in some form or fashion.

Given its influence on the generational opportunity AI presents, it's not shocking to learn that investors have been eagerly buying Nvidia stock in droves over the last couple of years. With that said, smart investors know that Nvidia isn't the only player in town.

While analyzing the most recent 13F filing from Ken Griffin's hedge fund, Citadel Advisors, I came across a pretty interesting move he made last quarter. Namely, Citadel scooped up 787,000 shares of consulting firm Accenture (ACN 0.19%) -- increasing its position by 291%.

Below, I'm going to detail why I think this is a savvy move by Griffin and outline how Accenture is benefiting from Nvidia's dominance in the AI realm.

How is Accenture working with Nvidia?

Back in October, Accenture announced the creation of the Nvidia Business Group -- a team of 30,000 professionals trained on Nvidia's AI stack. The goal is to help enterprises familiarize their teams with Nvidia's various AI platforms, including Foundry, Enterprise, and Omniverse.

There are a couple of obvious benefits to training employees at large corporations on Nvidia's AI stack. First, both Nvidia and Accenture benefit from this partnership as each serves as a form of lead generation for the other. But perhaps more importantly, integrating AI-powered services throughout large enterprises can yield game-changing efficiencies when it comes to costs and productivity.

Below, I'm going to explain just how lucrative Accenture's foray into the AI realm could be.

Is consulting really a lucrative opportunity?

Years ago, I worked at an enterprise software start-up that developed a querying tool called a knowledge graph. One challenge that customers consistently expressed was that implementing the software tool provided to them was time consuming.

For this reason, my company developed a professional services team that worked alongside clients, helping them integrate and scale our software as needed. One interesting learning point from this effort is that customers often came back after a couple of months, eager to purchase more licenses to our software and increase their professional services hours as they discovered more use cases.

This exact dynamic appears to be unfolding at Accenture. During the fiscal fourth-quarter earnings call, Accenture CEO Julie Sweet explained that the company is "starting to see more of our clients move from proofs of concept to sort of larger implementations which is important. So the size of those bookings is clicking up."

What Sweet is explaining here is that over the last year, many of Accenture's customers were still in discovery or exploratory phases of their AI journeys. Now that these businesses have started to seriously invest in AI products and services, it's only natural for use cases and applications to evolve into more time-consuming, sophisticated projects.

For those reasons, customers are likely going to remain sticky within Accenture's ecosystem, relying more on the company's professional services team to help further integrate various AI strategies.

Should you follow Griffin's lead and buy Accenture stock?

While I don't think Accenture will exhibit the same kind of growth as that of a high-growth software as a service (SaaS) stock, I still think the company is a compelling buy and is currently an under-the-radar opportunity in the AI realm.

For Accenture's full year of fiscal 2024 (ended Aug. 31), the company generated $3 billion in bookings related to generative AI projects. To put this into perspective, Accenture reported $81.2 billion in total bookings for the fiscal year, underscoring that AI is still just a nominal component of the overall operation.

But given the explanation from Sweet above, I'm thinking that AI is going to be a major tailwind for Accenture for years to come. An investment in Accenture could be seen in a similar vein to a long-term call option on the broader AI narrative without paying a premium for the most in-demand opportunities, such as Nvidia.