For the better part of the last three years, no trend has garnered more attention on Wall Street than artificial intelligence (AI). Empowering software and systems with the tools to make split-second decisions, all without the need for human oversight, is a technological advancement that can benefit most industries around the globe -- and the stock market's savviest money managers know it.
No later than 45 calendar days following the end of a quarter, institutional investors with at least $100 million in assets under management are required to file Form 13F with the Securities and Exchange Commission. A 13F details which stocks Wall Street's brightest money managers purchased and sold in the latest quarter.
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As you can imagine, the stock market's AI darlings, graphics processing unit (GPU) titan Nvidia (NVDA 0.98%) and software-as-a-service (SaaS) giant Palantir Technologies (PLTR 1.51%), have been top-tier holdings for several fund managers. But this optimism isn't universal.
Duquesne Family Office's billionaire boss, Stanley Druckenmiller, exited his fund's positions in Nvidia and Palantir well in advance of 2026. Instead of focusing on AI, Druckenmiller has been busy piling into one of Wall Street's hottest drug stocks for five consecutive quarters.
Billionaire Stanley Druckenmiller showed Nvidia and Palantir to the door
Since the beginning of 2023, Nvidia and Palantir have made their patient shareholders considerably richer. Nvidia became the first public company to reach the $5 trillion market cap plateau earlier this year, while shares of Palantir have climbed by more than 2,900%!
NASDAQ: NVDA
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These near-parabolic ascents reflect the seemingly sustainable moats that both companies hold dear. Nvidia's Hopper, Blackwell, and Blackwell Ultra GPUs have been superior, on a compute basis, to external competition. With AI infrastructure demand outpacing supply, and CEO Jensen Huang intent on bringing a new GPU to market annually, Nvidia hasn't had any trouble charging a premium price for its hardware.
Meanwhile, Palantir's AI-driven Gotham and Foundry SaaS platforms lack one-for-one replacements at scale. Gotham assists the U.S. government and its allies in planning and overseeing military missions, as well as in collecting and analyzing data. The multiyear contracts Palantir has signed with the U.S. government ensure predictable double-digit sales growth and abundant operating cash flow.
Despite these sustainable moats, billionaire Stanley Druckenmiller parted ways with both stocks. He jettisoned his fund's remaining stake of 214,060 shares of Nvidia during the September-ended quarter of 2024. As for Palantir, 769,965 shares were shown to the door in a nine-month stretch between July 1, 2024, and March 31, 2025.
Druckenmiller dumping the faces of the AI revolution may represent nothing more than simple profit-taking. According to 13F aggregator WhaleWisdom.com, the average hold time for every security in Duquesne Family Office's fund, as of Sept. 30, was less than seven months. This demonstrates the willingness of its investment chief to take profits when the opportunity presents itself.
NASDAQ: PLTR
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The concern is that there may be more to this selling activity than just a desire to cash in his chips.
For example, history tells us that every game-changing technological advancement over the last three decades, including the internet, genome decoding, nanotechnology, 3D printing, blockchain technology, and the metaverse, has navigated an early stage bubble-bursting event. Although it's impossible to forecast when the music will stop, the common theme has been an overestimation by investors of the adoption rate and/or optimization of a new technology.
While Nvidia's and Palantir's sales growth point to robust demand for their respective products and services, most businesses that are aggressively spending on AI have yet to optimize their solutions. In other words, companies deploying AI haven't figured out how to get the highest return out of their investment. It takes time for all technologies to mature and evolve. If an AI bubble forms and subsequently bursts, Nvidia and Palantir stocks would be in trouble.
Furthermore, the valuations for Wall Street's favorite AI duo are suspect. Historically, price-to-sales (P/S) ratios above 30 for companies at the forefront of next-big-thing innovations have been unsustainable over the long run. Though Nvidia, briefly, topped a P/S ratio of 30 in early November, it's Palantir's P/S ratio of 127, as of the closing bell on Dec. 19, which stands out like a sore thumb.
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Duquesne's billionaire boss has loaded up on shares of this drug stock ahead of 2026
At the other end of the spectrum, Duquesne Family Office's lead investor has continued to scoop up shares of brand-name and generic-drug developer Teva Pharmaceutical Industries (TEVA 1.64%). Shares of Teva have soared by 191% since the beginning of 2024.
Druckenmiller began loading up on shares of this drug stock during the second half of 2024 and simply hasn't stopped. Between July 1, 2024, and Sept. 30, 2025, 13Fs show:
- Q3 2024: 1,427,950 shares purchased
- Q4 2024: 7,569,450 shares purchased
- Q1 2025: 5,882,350 shares purchased
- Q2 2025: 1,089,189 shares purchased
- Q3 2025: 625,000 shares purchased (16,593,935 total shares held)
In 15 months, Teva has become the third-largest holding by market value in the nearly $4.1 billion fund Druckenmiller oversees.
One reason for this optimism likely has to do with Teva working through a series of legal overhangs. In particular, the company resolved litigation in early 2023 with 48 states regarding its role in the opioid crisis. Quantifying this settlement and spreading it out over 13 years alleviated the company's financial concerns, allowing investors to refocus on Teva's innovative capabilities.
NYSE: TEVA
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Speaking of innovation, CEO Richard Francis has made waves by shifting his company's focus toward novel drug development. While Teva continues to be a key player in the global generic drug market, the pricing power of generics hasn't been great for years. Developing brand-name therapies affords Teva improved pricing power and considerably higher margins. For instance, in 2025, tardive dyskinesia drug Austedo is expected to bring in more than $2 billion in global sales.
Teva Pharmaceutical has also vastly improved its balance sheet over the last nine years.
Following the buyout of generic drug company Actavis in August 2016, Teva's net debt surpassed $35 billion. But under the leadership of turnaround specialist CEO Kare Schultz, who preceded Richard Francis, the company lowered its annual operating expenses, sold off non-core assets, and significantly reduced its net debt. As of the end of the third quarter of 2025, Teva's net debt has been more than halved to $14.6 billion.
Lastly, billionaire Stanley Druckenmiller was likely drawn to Teva's valuation amid a historically expensive stock market. Though it's trading at a still-reasonable 11 times forward-year earnings per share, as of this writing, Duquesne's billionaire boss began scooping up shares with Teva trading at a forward price-to-earnings ratio as low as 5.
