Investors have been watching Stanley Druckenmiller’s stock picks for a long time. The billionaire investor built his fortune in a fund he founded in 1981, Duquesne Capital Management. Although he closed that fund in 2010, he manages around $3.4 billion in assets through his Duquesne Family Office LLC.
Druckenmiller’s top holdings, as shown in its fourth-quarter 2023 13-F filing, appear to reflect an interest in leading companies in cutting-edge industries and technologies. Let’s look at three of them.
1. Nvidia
Nvidia (NASDAQ:NVDA) is Druckenmiller’s largest investment, accounting for just over 16% of his portfolio. A leading maker of AI-enabled chips, the company has delivered triple-digit revenue growth in recent quarters as companies scramble to purchase the hardware they need to capitalize on the AI revolution.
Estimates of Nvidia’s degree of dominance vary, but most analysts agree that Nvidia controls at least 80% of the AI chip market.
In addition, Nvidia responded to the AI chip competition with the release of Blackwell. This combines six accelerated computing technologies in one product and offers similar functionality at 25 times lower cost and energy consumption than the previous AI chip version.
Investors may also notice how Druckenmiller structures his Nvidia investment into two holdings. One of them is Nvidia stock, which accounts for 9% of the total portfolio.
However, Duquesne invested another 7% of the portfolio in Nvidia call options. These are highly leveraged investment products. Because they have an expiration date and can easily fall to $0, they are unsuitable for most investors. Additionally, the size of this investment could change significantly when the next 13-F release in May shows Druckenmiller’s holdings in the first quarter of 2024.
Still, the aggressiveness of these option investments suggests that Nvidia will make significant gains in the near future. This additional factor could help convince some investors to buy Nvidia stock.
2.Microsoft
Duquesne bought Microsoft (NASDAQ:MSFT) stock in the first quarter of 2014, around the time Satya Nadella became CEO. Although the fund has invested in the stock on and off over the years, the apparent bet on Nadella’s leadership has paid off handsomely for Druckenmiller. Since Nadella became CEO, the stock has risen about 11-fold.
Nadella transformed Microsoft into a cloud company as changing technologies and increasing competition had diminished the dominance of Windows and Office. The Azure platform has emerged as the main competitor to Amazonis AWS, which led the cloud industry.
Furthermore, the emergence of AI has strengthened Microsoft’s competitive advantage. AI relies heavily on the cloud to run applications, and its relationship with OpenAI has improved alphabet It’s the first serious challenge to Google Search in years as Microsoft’s Bing uses the technology.
Today, Microsoft is once again the largest company in the world with a market capitalization of around $3 trillion. This growth is likely a big factor in it accounting for 12% of Duquesne’s portfolio. As AI becomes an essential technology, these investments are expected to continue to increase.
3. Coupang
Duquesne bought first Coupang (NYSE:CPNG) in the first quarter of 2021, probably around the time of the IPO in March this year.
As a leading e-commerce company in South Korea, it is not as well-known among U.S. investors. However, it stands out in the country for its extensive logistics network, which can deliver anywhere in the country within a few hours. The company also competes in e-commerce in Taiwan and operates a video streaming service.
Since going public in 2021, revenue has grown by double digits, and Coupang became profitable on an annual basis in 2023. Still, Druckenmiller may now regret his timing, as he bought the stock around the time of the IPO. Due to sharp declines during the 2022 bear market, the stock has fallen more than 50% since the IPO. Still, he has continued to add stocks since then, making up 11% of his portfolio.
The investment could pay off at some point. Analysts forecast earnings growth of 15% this year and 110% in 2025. With a market cap of $41 billion, it’s also just a small fraction of the size of Amazon at $1.9 trillion. That could give investors a second chance for those who missed the chance at Amazon.
As Coupang consolidates its dominance in South Korean e-commerce and develops new revenue streams, Druckenmiller may eventually be rewarded for his patience.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Coupang, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.
Billionaire Stanley Druckenmiller has 39% of his portfolio in these three companies was originally published by The Motley Fool