Wealthy Investor Stanley Druckenmiller Allocates 40% of Portfolio to 3 Artificial Intelligence Stocks: Worth Investing In?

Wealthy Investor Stanley Druckenmiller Allocates 40% of Portfolio to 3 Artificial Intelligence Stocks: Worth Investing In?

Stanley Druckenmiller is one of the most successful investors of all time.

Working under George Soros, Druckenmiller helped guide the strategy that “broke the Bank of England”, earning him more than $1 billion in 1992 by shorting the pound sterling, leading to to his crash.

However, this trade was no accident. After founding Duquesne Capital Management in 1981, Druckenmiller’s hedge fund never had a bad year, a period that included the Black Monday crash, the collapse of the Internet companies and the Great Financial Crisis. Duquesne Capital Management achieved an average annual return of 30% between 1986 and 2010, crushing the entire market.

Druckenmiller closed his fund in 2010, but he hasn’t stopped investing. Today, he runs the Duquesne Family Office, which has approximately $3.4 billion in assets according to its fourth-quarter update. Recently, the famous investor has been openly bullish on AI stocks. Like a number of other CEOs and investors, the billionaire sees this as a major innovation, saying last year: “AI could be as transformative as the Internet.”

Unsurprisingly, AI stocks make up a significant portion of its portfolio. In fact, only three AI Actions represent 40% of its assets. Let’s take a look at these stocks and see if any are worth buying today.

Wealthy Investor Stanley Druckenmiller Allocates 40% of Portfolio to 3 Artificial Intelligence Stocks: Worth Investing In?

Image source: Getty Images.

1.Nvidia

It’s perhaps no surprise to see Nvidia (NASDAQ:NVDA) at the top of this list. Nvidia has dominated the AI ​​narrative and has been the biggest winner in terms of market cap, up more than $1.5 trillion since the start of 2023.

At the end of 2023, Druckenmiller owned 617,494 shares worth approximately $306 million and call options on the stock worth an additional $242 million. Together, these securities represent 16% of its portfolio. Given that Nvidia has been soaring since the start of the year, these options could have paid off big for the billionaire investor.

Druckenmiller started buying Nvidia in the fourth quarter of 2022, indicating that he jumped on the stock after the launch of ChatGPT, which marked the start of the AI ​​boom. The investor said in the fall that Nvidia stock was in “nosebleed territory,” but shares continued to rebound, and his fourth-quarter buy indicates he’s changed his mind on this synopsis, although he reduced his stake in Nvidia stock by 30%. in the fourth quarter. It’s unclear whether he sold any of his Nvidia shares in the first quarter so far, but based on its current price, the right move would have been to hold on to them.

2.Microsoft

After Nvidia, Microsoft (NASDAQ:MSFT) could be the next best-known AI title. The tech giant has been a close partner of ChatGPT’s parent company OpenAI, having invested billions in the AI ​​startup, giving it an advantage in the new technology. It has integrated OpenAI features into its products, including Azure, GitHub, Bing and its Office suite, and designed its own ChatGPT-like co-pilot to answer questions, improve communications and guide users.

Druckenmiller is not a newcomer to Microsoft. He started buying shares in 2015, and he increased his stake in the fourth quarter, purchasing 68,860 shares to bring the total to 1.09 million, or $408.4 million. Microsoft is its largest stock holding and represents 12% of its portfolio.

Notably, in the fourth quarter, Druckenmiller sold its entire stake in Alphabet, Microsoft’s rival, indicating a clear preference for Microsoft. The move appears to have paid off, as Microsoft is up 10% this year, while Alphabet is down slightly.

3. Coupang

South Korean e-commerce leader Coupang (NYSE:CPNG) It may not be an AI stock in the traditional sense, but the company is doing things with artificial intelligence that earn it a place in the category.

Coupang uses artificial intelligence in a variety of ways, including robots in its distribution center that can carry more than 2,000 pounds and are called autonomously guided vehicles as they navigate the warehouse. They reduced human workload by about 65%.

Coupang is also using AI to help warehouse workers, giving each employee a personal digital assistant (PDA) that will assign work and optimize routes using AI and machine learning.

Druckenmiller held 22.9 million shares of Coupang at year-end, adding 2 million shares to his holdings in the fourth quarter to bring the total stake to $371 million, or 11% of his portfolio. He owned the Korean e-commerce stock before its IPO. It’s not entirely clear why Druckenmiller is betting on Coupang, but the stock currently offers attractive growth at a good price.

Which of these AI stocks are buys?

Of these three stocks, I think Nvidia and Microsoft look like solid buys. Granted, stocks have risen significantly over the past year, but these companies are respectively leaders in their AI segments (Nvidia for hardware and Microsoft for software), and these leadership positions should pay off in the years to come.

Coupang also looks promising but more risky. The company is showing solid growth and trading at a reasonable valuation. However, its long-term growth appears to depend on expanding beyond South Korea and into new markets, as it already has strong penetration in its domestic market. This could pay off for the company, especially since “offering development” drove revenue growth of 105% to $273 million in the fourth quarter, but it’s a strategy more risky.

Overall, it’s best for investors to stick with Nvidia and Microsoft. If you’re an AI investor, it makes sense to follow Druckenmiller’s commentary and developments as the investment landscape develops. The billionaire called for the Nvidia rally, and he may have some idea of ​​where the AI ​​boom will go next.

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Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Alphabet, Coupang, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Billionaire investor Stanley Druckenmiller holds 40% of his portfolio in 3 AI stocks. Are any of them buying? was originally published by The Motley Fool

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