A great way to find promising growth stocks is checking what the smartest investors are buying. Billionaires are interested in preserving and growing their wealth, and they have the resources to conduct exhaustive research in companies that might be out of reach for the average investor.

Here are two recent billionaire picks that could be smart buys for 2025 and beyond.

1. Lam Research

Artificial intelligence (AI) is transforming business operations and driving significant growth for the semiconductor industry. The computing chips used for AI research will become more complex over time, and investors can profit off this trend by buying shares of Lam Research (LRCX -3.66%).

Billionaires David Tepper of Appaloosa Management and Chase Coleman of Tiger Global Management were buying shares in the fourth quarter.

There are major shifts underway in how advanced processors are designed. This is driving strong demand for Lam's equipment and services used to design and manufacture chips. Following a cyclical downturn for the industry, Lam is experiencing a strong recovery. Revenue grew 16% year over year for the December-ending quarter.

Annual growth can be inconsistent, but over the last 10 years, Lam's compound annual revenue growth was 12%, with earnings per share growing at a 23% rate. Over the last four quarters, Lam Research earned $4.3 billion on $16.2 billion of revenue.

What stands out about Lam's business is that it earned a high return on capital employed of 35% last year, which indicates a competitive advantage. It benefits from close ties with leading chip manufacturers like Taiwan Semiconductor Manufacturing and Micron Technology. Micron is a leading supplier of memory chips for the data center market, which plans to increase capital spending by 67% this year. This will benefit Lam's business.

Lam should continue to benefit from growing investment from leading chipmakers in graphics processing units (GPUs) and high-bandwidth memory. The company sees growing demand for AI chips as a key long-term growth driver for the business. AI is expected to drive about $200 billion of spending on wafer fabrication equipment over the next five years.

Tepper and Coleman are likely buying the stock because of Lam's competitive position, high returns on capital, and excellent growth prospects in the AI chip market. Wall Street analysts forecast the company's earnings to grow at an annualized rate of 15% over the next few years, which could lead to market-beating returns.

2. Uber Technologies

The shift toward convenience and relatively low cost of using ride-hailing services has benefited Uber Technologies (UBER -1.92%). These trends continue to drive strong growth for the business, and new services like delivery and autonomous driving could support more gains for investors over the long term. David Tepper was a buyer last quarter, while Chase Coleman is also holding a small position in the stock.

Uber reported accelerating growth in monthly active customers, trips, and bookings last quarter. Revenue grew 20% year over year in Q4, driven by record demand for rides and delivery services.

Importantly, Uber is starting to show impressive profitability. After reporting massive losses on the bottom line through 2022, Uber's net income exploded to $9.8 billion last year -- a stellar profit margin of 22%.

The growing amount of trip volume the company handles every year should allow Uber to continue leveraging its costs to deliver strong growth in earnings. Analysts anticipate annualized earnings growth of 34%.

While the emergence of autonomous ride-hailing services will present new opportunities for the company, it will also pose challenges. For example, Tesla is about to emerge as a competitor, where it is planning to test unsupervised robotaxis in Austin this year. Uber is also gearing up to launch autonomous rides in Austin, Texas, in March through its partnership with Alphabet's Google's Waymo.

But the idea of a winner-take-all in any industry is usually overestimated by Wall Street. By 2030, the global ride-hailing market is estimated to be worth $11 trillion, according to Statista, which is a massive opportunity that may support multiple ride-hailing services. Tesla will certainly get its share of the market, but Uber has a big head start, with 171 million monthly active customers and partnerships with Waymo and China's Baidu.

Technology is bringing major disruptions to transportation -- one of the largest sectors of the economy -- and Uber is playing a key role. Tepper and Coleman likely appreciate Uber's competitive position and improving margins. The stock trades at a reasonably price-to-earnings multiple of 18, which may undervalue its future growth.