Palantir Billionaire Peter Thiel Sells 2 Artificial Intelligence (AI) Stocks That Wall Street Says Are Undervalued

Core Insights - Peter Thiel, a billionaire entrepreneur and venture capitalist, has exited positions in Apple and Microsoft, despite analysts considering these stocks undervalued [1][2] Apple - Apple reported a 16% increase in revenue to $144 billion, with significant growth in iPhone and services, particularly a 38% surge in Greater China [4] - The company has 2.5 billion active devices globally, presenting an opportunity to expand its high-margin services business [5] - Future AI features will be developed using Alphabet's Gemini models, which may enhance Apple's ability to monetize AI [6][7] - Thiel's exit may be due to anticipated shrinking margins from rising memory chip prices and a high valuation of 34 times earnings, with projected earnings growth of 11% annually [8] Microsoft - Microsoft reported a 17% revenue increase to $81 billion, with a 24% rise in non-GAAP net income to $4.14 per diluted share [10] - The investment thesis focuses on the strength in enterprise software and cloud computing, with significant growth in Microsoft 365 Copilot adoption and Azure market share [11] - Concerns about AI disrupting the software industry and the return on investment for AI initiatives may have influenced Thiel's decision to sell [12] - Microsoft trades at 26 times earnings, which is considered a fair valuation with expected earnings growth of 15% annually through fiscal 2027 [14]