Quarterly-filed Type 13Fs assist traders monitor which shares Wall Road’s brightest cash managers are shopping for and promoting.
Duquesne Household Workplace’s Stanley Druckenmiller exited positions in Nvidia and Palantir over the previous 12 months — and profit-taking may not clarify the whole story behind this promoting.
In the meantime, Druckenmiller has bought shares of a vital AI {hardware} inventory for 4 consecutive quarters, and it is turn out to be his fund’s fifth largest holding.
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The month of August has been chock-full of vital information releases. The inflation and jobs report from the federal authorities, Federal Reserve Chair Jerome Powell’s extremely anticipated speech at Jackson Gap, and earnings releases from a lot of Wall Road’s most influential companies have deluged traders with data. It is also made it straightforward for one thing of significance to slide via the cracks.
For example, Aug. 14 marked the deadline for institutional traders with a minimum of $100 million in belongings below administration (AUM) to file Type 13F with U.S. regulators. A 13F provides a concise snapshot of which shares Wall Road’s shrewdest cash managers purchased and offered within the newest quarter (on this case, the quarter ended June 30).
Though billionaire Warren Buffett has earned fairly the next on Wall Road, he is not the one billionaire fund supervisor with a eager eye for worth. Duquesne Household Workplace’s billionaire boss Stanley Druckenmiller can be recognized for his outsize returns and talent to snag superb offers.
What’s notably attention-grabbing about Druckenmiller has been his buying and selling exercise inside the synthetic intelligence (AI) area. Over the earlier 12 months, primarily based on 13F filings overlaying buying and selling exercise from July 1, 2024 to June 30, 2025, Duquesne’s funding guru despatched Wall Road’s two top-tier AI shares, Nvidia (NASDAQ: NVDA) and Palantir Applied sciences (NASDAQ: PLTR), to the chopping block. However on the similar time, he bought shares of a necessary AI titan for 4 consecutive quarters and made it a top-five holding.
As of the midpoint of 2024, Duquesne’s billionaire chief was overseeing $2.9 billion in AUM unfold throughout 64 holdings. This included 214,060 shares of Nvidia, following its 10-for-1 ahead cut up in June 2024, in addition to 769,965 shares of Palantir. By March 31, 2025, each of those holdings have been fully exited.
The logical rationalization for promoting two of the most well liked AI shares on the planet is that Druckenmiller was locking in features. The typical inventory for Duquesne Household Workplace has been held for lower than seven months, which suggests its billionaire investor is not afraid to money in his fund’s chips when the chance presents itself.
Shares of Nvidia have catapulted larger by roughly 1,120% because the finish of 2022, as of the closing bell on Aug. 22. Its AI-graphics processing models (GPUs) have turn out to be the popular alternative by companies to deploy of their AI-accelerated information facilities. Sturdy ongoing demand for AI-GPUs, coupled with Nvidia’s well-defined compute benefits, have allowed it to cost a premium for its {hardware}.
In the meantime, Palantir’s inventory has gained effectively over 2,300% throughout the identical time-frame. Its AI and machine learning-fueled Gotham platform, which assists federal governments with army mission planning and oversight, has performed a number of the heavy lifting. With no clear one-for-one substitute for Gotham, and no true competitors to its enterprise subscription Foundry platform at scale, Palantir has commanded fairly the valuation premium.
What is perhaps of concern to Nvidia and Palantir shareholders is that if Druckenmiller despatched these shares packing for causes that transcend profit-taking.
For example, Druckenmiller opined in Might 2024 that “AI is perhaps slightly overhyped now, however under-hyped long run.” Duquesne’s billionaire boss astutely acknowledges that each next-big-thing pattern over the past 30 years has endured an eventual bubble-bursting occasion early in its enlargement part. In different phrases, traders have a tendency to overshoot in relation to early utility and adoption price expectations. This ultimately results in lofty expectations that are not met and the bursting of the bubble.
No firm has benefited extra from the AI revolution than Nvidia. If a bubble have been to kind and burst, there’s little query its shares would really feel the affect. Although Palantir’s multiyear authorities contracts and subscription income would shield it from a right away income drop-off, poor investor sentiment throughout a bubble-bursting occasion would nonetheless, seemingly, weigh on its shares.
Valuation is one other catalyst which will have enticed Druckenmiller to promote. Nvidia and Palantir are buying and selling at respective price-to-sales (P/S) ratios of 30 and 117. Traditionally, companies on the entrance line of a game-changing innovation have peaked at P/S ratios of 30 to 40. In brief, Nvidia and Palantir are priced for perfection.
Though Druckenmiller stays skeptical of among the corporations main the evolution of AI over the brief run, there’s one important synthetic intelligence inventory that he merely cannot cease shopping for for his fund. Duquesne’s 13Fs present shopping for exercise spanning 4 consecutive quarters for trillion-dollar chip fabricator Taiwan Semiconductor Manufacturing (NYSE: TSM), which is best-known by its abbreviation, “TSMC.”
This is a breakdown of Druckenmiller’s shopping for exercise of TSMC over the earlier 12 months:
Q3 2024: 57,355 shares bought
This fall 2024: 50,160 shares bought
Q1 2025: 491,265 shares bought
Q2 2025: 166,305 shares bought (765,085 whole shares held)
In only one 12 months, TSMC has turn out to be a top-five holding for Duquesne’s now greater-than-$4 billion funding portfolio.
The apparent attract of Taiwan Semiconductor is the position it is enjoying in AI chip manufacturing. Its chip-on-wafer-on-substrate (CoWoS) expertise is important for the packaging of high-bandwidth reminiscence wanted for AI-accelerated information facilities. TSMC’s month-to-month CoWoS capability is predicted to successfully double to between 65,000 models to 75,000 models by the top of 2025 from 35,000 monthly in 2024. Additional enlargement is predicted to 100,000 month-to-month models come 2026. This added capability will assist Nvidia, Superior Micro Gadgets, and different chipmakers ramp up gross sales of their AI GPUs.
To construct on the above, TSMC is coping with fairly the backlog for its providers, with some orders stretching effectively into 2026. Backlogged orders present a wholesome degree of working money circulation predictability.
Whereas superior chips accounted for 60% of TSMC’s web gross sales in the course of the June-ended quarter, there’s nonetheless loads of alternative outdoors of the AI area. Greater than 1 / 4 of its web gross sales hint again to chips and options utilized in next-generation smartphones. The proliferation of 5G wi-fi networks has led to a gradual smartphone improve cycle.
One other 10% (mixed) of Taiwan Semiconductor’s web gross sales derive from Web of Issues units and chips utilized in vehicles. Automobiles and family home equipment turning into extra reliant on expertise is good news for TSMC.
Duquesne’s billionaire chief may also be attracted by TSMC’s valuation. Although its forward-year price-to-earnings (P/E) ratio of 21 represents a modest premium in comparison with latest years, TSMC’s annual earnings development price of 20% or larger makes its ahead P/E fairly palatable.
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Sean Williams has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Superior Micro Gadgets, Nvidia, Palantir Applied sciences, and Taiwan Semiconductor Manufacturing. The Motley Idiot has a disclosure coverage.
Billionaire Stanley Druckenmiller Bought His Fund’s Stakes in Nvidia and Palantir, and Has Piled Into This Important Synthetic Intelligence (AI) Inventory As an alternative was initially revealed by The Motley Idiot