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 Microsoft Corporation (NASDAQ:MSFT) 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 development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Duquesne Capital’s Stake: $178,999,000
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. It is one of the longest holdings in the Duquesne Capital portfolio. Druckenmiller first disclosed a stake in the tech giant during the first quarter of 2014. Since then, barring minor exceptions in 2016 and 2022, it has been a regular feature in the 13F portfolio of his hedge fund. The present holding, comprising over 400,000 shares, represents more than 6.1% of the total 13F portfolio. Latest filings reveal that Druckenmiller has reduced his exposure to the stock by more than 64% compared to filings for the first quarter of 2024.
This activity is interesting given that most analysts on Wall Street are bullish on Microsoft Corporation (NASDAQ:MSFT) in light of the AI boom. For example, Evercore ISI analyst Kirk Materne has an Outperform rating on the shares with a price target of $500. In a recent investor note, the analyst noted that the tech giant had delivered solid fiscal Q4 results with strong commercial bookings, but shares were down slightly as Azure growth came in at the low end of expectations and Q1 Azure guidance was also a bit lower than expected.
Overall MSFT ranks 6th on our list of stocks Billionaire Stan Druckenmiller is betting on. While we acknowledge the potential of MSFT 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 MSFT 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.