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Billionaire Stanley Druckenmiller Sold Palantir and Amazon and Is Piling Into This Artificial Intelligence (AI) Stock Instead
PLTRPalantir Technologies(PLTR) The Motley Fool· The Motley Fool·2025-06-04 22:30

Core Viewpoint - Billionaire Stanley Druckenmiller is shifting his investment focus from AI giants like Nvidia, Palantir, and Amazon to Taiwan Semiconductor Manufacturing Company (TSMC), which he believes is undervalued despite its strong growth potential in the AI sector [2][3][10]. Company Analysis - Nvidia: Druckenmiller made a significant investment in Nvidia, benefiting from its advancements in generative AI, but sold his shares about a year ago, expressing regret over the decision [2][3]. - Palantir Technologies: The company has experienced rapid revenue growth due to its AI Platform (AIP), which has expanded its market presence. However, it is currently one of the most expensive stocks, trading at over 75 times its 2025 revenue outlook, prompting Druckenmiller to sell his shares [5][6][8]. - Amazon: As the largest public cloud platform, Amazon is seeing strong demand for AI services through AWS. Despite this, Druckenmiller reduced his stake significantly as the stock reached an all-time high of over 240pershare,indicatingavaluationconcern[7][9].IndustryInsights−∗∗TaiwanSemiconductorManufacturingCompany(TSMC)∗∗:TSMCistheleadingchipmanufacturerglobally,benefitingfromadominantmarketshareandadvancedtechnology.ThecompanyisexpectedtoseestronggrowthinAIspending,withmanagementprojectingadoublingofAI−relatedrevenuethisyearandacompoundannualgrowthrateofcloseto40240 per share, indicating a valuation concern [7][9]. Industry Insights - **Taiwan Semiconductor Manufacturing Company (TSMC)**: TSMC is the leading chip manufacturer globally, benefiting from a dominant market share and advanced technology. The company is expected to see strong growth in AI spending, with management projecting a doubling of AI-related revenue this year and a compound annual growth rate of close to 40% for AI chips through 2029 [10][11][13]. - **Market Position**: TSMC's ability to invest in R&D and maintain its technological lead is supported by its revenue generation. However, the capital-intensive nature of chip fabrication poses risks if demand decreases [12]. - **Valuation**: Despite strong growth prospects, TSMC's stock trades at less than 21 times forward earnings estimates, making it attractive for investors, especially in light of geopolitical risks and the ongoing global trade war [14]. Investment Activity - Druckenmiller initially invested about 20 million in TSMC in the second half of last year and has since quintupled his stake, making it one of his largest holdings, indicating confidence in TSMC's future performance [15].