What Is The Billionaire with Perfect Record Buying?

On September 16, 1992, the British government was working frantically to maintain the value of the pound after a chain of events threatened to devalue the country’s currency. It failed, the pound plummeted, and the day was known as “Black Wednesday” from then on.

George Soros and his hedge fund manager, Stanley Druckenmiller, saw the crisis coming. Prior to Black Wednesday they shorted the British pound, betting over $1 billion that its value would drop. The gambit worked, and Soros and Druckenmiller pocketed over $1 billion in profits.

In 2000, Druckenmiller moved on from Soros to focus on his own hedge fund, Duquesne Capital. After 10 successful years managing the massive fund that resulted in an average annual gain of 30%, Druckenmiller decided to step away in 2010 and focus on running his family office.

The Duquesne Family Office still manages $3.35 billion in capital, and because of Druckenmiller’s success, every move Duquesne makes is highly scrutinized. Not surprisingly, Duquesne’s largest holding is Microsoft (NASDAQ: MSFT), accounting for 12.19% of the company’s portfolio.

But what else is Stan Druckenmiller buying?

Why Did Druckenmiller Buy Nvidia Stock?

It’s also no shock that Duquesne has continued to invest in Nvidia (NASDAQ: NVDA). NVDA now accounts for 9.12% of the office’s portfolio.

In the 4th quarter of 2023, Druckenmiller actually sold off a bit of NVDA, but made a substantial purchase in options. Duquesne bought $242 million in calls on the stock.

That’s a vote of confidence for the hottest stock on the market, and for the future of artificial intelligence (AI). NVDA is already up 239.9% over the past year, and the semiconductor stock now has a price-to-earnings (P/E) ratio above 66.

Those factors might deter investors who fear that the stock doesn’t have much more room to rise. But Nvidia just beat revenue estimates by 7.55% and earnings expectations by 11.28% in the 4th quarter of 2023.

Why Did Duquesne Buy Seagate Stock?

Seagate Technology (NASDAQ: STX) is not nearly as well-known as Nvidia, but it’s certainly on Druckenmiller’s radar.

Duquesne bought $103 million in Seagate shares in the 4th quarter, and the stock makes up 3.22% of his family office’s portfolio.

Seagate is a data storage company most known for its hard disk drives, which have been in high demand as electronics use has surged.

STX’s 43.5% 1-year return may seem paltry compared to NVDA, but the stock outperformed the S&P 500 by over 15%. In the 4th quarter, Seagate blew away earnings expectations by over 270%. It also continued its quarterly dividend payout of $0.70 per share, a 3.06% annual dividend yield.

Fourth-quarter revenue of $1.56 billion didn’t quite meet estimates, however, and that may be why Wall Street isn’t quite as bullish as Druckenmiller. The average price target for STX is $92 per share, 1.12% below where the stock currently trades .

Why Did Stanley Druckenmiller Buy Arista Networks Stock?

Continuing the tech stock theme, Duquesne also made a $55.2 million investment in Arista Networks, Inc. (NYSE: ANET), which Arista manufactures computing equipment for data centers and has quickly grown to rival Cisco Systems in the infrastructure industry.

The company has positioned itself as a player in cloud computing platforms, and because of that ANET has soared by over 100% over the past 12 months.

The gains were paused after Arista Networks reported its 4th quarter of 2023 earnings, however, because revenue of $1.54 billion was in line with estimates. But net income of $613.6 million represented a nearly 44% improvement over the same quarter of 2022, and diluted earnings per share were 21.6% higher than analysts expected.

Wall Street analysts back Druckenmiller’s call here, with 19 of 28 rating ANET as a Buy. The average price target for the stock is $298.33 per share, 7.5% above where ANET now trades.

That may not tempt many investors, but Druckenmiller is likely attracted to Arista Networks because of the company’s AI potential. The networking equipment Arista Networks makes can be used to power AI as well.

What Stocks Is Stanley Druckenmiller Selling?

AI and cloud are certainly a draw for Druckenmiller, but he’s being selective. In the 4th quarter, the billionaire moved away from Alphabet (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN). Amazon is the largest cloud services platform and Google is the 3rd largest, but that didn’t sway Druckenmiller.

Both “Magnificent Seven” stocks have invested heavily in AI as well, though without the success that Microsoft and Nvidia have enjoyed. A series of mishaps with Google’s Gemini AI have caused the company to receive some recent backlash.

Duquesne also sold off its $139 million stake in Lamb Weston Holdings, a company that makes and distributes a line of frozen potato products.

Rounding out Druckenmiller’s biggest sells for the 4th quarter was a $127 million sale of T-Mobile stock, and a $69 million divestment of Builders FirstSource shares.

What Is Stanley Druckenmiller Buying?

Stanley Druckenmiller made waves working for George Soros, and branched out on his own to become one of the world’s best-known investor billionaires.

Even after stepping back somewhat in 2010, Druckenmiller has valuable insights from a long and successful career. Microsoft is the pillar of his portfolio at the moment, followed by Coupang (NYSE: CPNG). The South Korean e-commerce marketplace accounts for 11.07% of Duquesne’s portfolio.

Nvidia rounds out the top three stocks, and in spite of earlier comments that the stock might be reaching a ceiling, he just made a substantial purchase. Seagate Technology was a recent buy, and the data storage company has been increasing its profits and working to expand its AI footprint.

Arista Networks is an infrastructure manufacturer for data centers that can power both cloud and AI. Druckenmiller has been vocal about his belief that AI is here to stay, and he has echoed the sentiment that the coming AI boom might mirror the early days of the internet.

He’s also put his money where his mouth is, and bought billions of dollars in tech and AI stocks. With Druckenmiller’s record, those bets are likely to pay off.

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