We recently compiled a list of the Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks. In this article, we are going to take a look at where Philip Morris International Inc. (NYSE:PM) stands against the other stocks Billionaire Stan Druckenmiller is betting on.
When it comes to growth offerings, there are few money managers on Wall Street whose opinion carries more weight on the matter than Stanley Druckenmiller, the chief of New York-based investment firm Duquesne Capital. Druckenmiller oversees a 13F portfolio at his hedge fund that was worth close to $3 billion at the end of the second quarter of 2024. As the AI craze sweeps Wall Street, Druckenmiller has outlined his bullish long-term thesis on the new technology, recently appearing in a program on news platform CNBC to claim that the AI revolution was bigger than the excitement around blockchain, the internet, or other previous tech-related breakthroughs in the recent past.
During his appearance on the show, the billionaire noted that anybody who was talking about the internet back in 1999, before the advent of high-speed wireless connections and smart devices, could not have estimated that it would become as big as it did in the twenty or so years since that time. He further highlighted how the NASDAQ, the tech-heavy benchmark index, plunged 80% during the dotcom crisis at the turn of the millennium before offering investors handsome returns in the long-term. The money manager compared this to the AI universe and said that with the capital spending on the new tech, the big payoff in the sector might take four or five years to materialize.
Druckenmiller further added that AI was a trend like he had never seen before but cautioned listeners that he was not Warren Buffett and did not own things for 20 years – a reference to the long term investing strategy of the Oracle of Omaha. The remarks were in defense of his 13F activity during the first quarter of 2024. The billionaire told CNBC that he needed a break from some AI-focused positions because there had been a hell of a run, and a lot of what his fund recognized had become recognized by the marketplace. However, Drucknemiller clarified that he remained bullish on AI in the long-term.
Our Methodology
For this article, we scanned the stock portfolio of Duquesne Capital according to the 13F filings submitted at the end of the second quarter of 2024. We selected the top 10 stocks from this portfolio. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A man exhaling smoke from a cigarette indicating the use of tobacco products.
Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 70
Duquesne Capital’s Stake: $90,118,000
Philip Morris International Inc. (NYSE:PM) is a company that makes and sells cigarettes in more than 180 countries across the world. Late last month, the firm posted earnings for the second quarter of 2024, reporting earnings per share of $1.59, beating market expectations by $0.03. The revenue over the period was $9.4 billion, up over 5.5% year-on-year and beating analyst estimates by $280 million. The diluted EPS is forecast to be in a range of $5.89 to $6.01, at prevailing exchange rates, versus reported diluted EPS of $5.02 in 2023.
Philip Morris International Inc. (NYSE:PM) is one of the most followed stocks on Wall Street. Barclays recently raised the price target on the shares to $130 from $110 and kept an Overweight rating on the stock. In an investor note, the advisory shared that tobacco stocks had a strong Q2 as market multiples were set not on what was happening now, but on what could happen in the terminal year.
Overall PM ranks 9th on our list of stocks Billionaire Stan Druckenmiller is betting on. While we acknowledge the potential of PM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.