More than three decades ago, the proliferation of the internet began changing the world forever. It opened new doors for businesses to sell and market their products and services, while also inspiring the retail investor revolution.
For decades, the investing community has been waiting for the next technological leap forward to take shape. The rise of artificial intelligence (AI) looks to be the long-awaited innovation that could rival what the internet did for businesses.
According to analysts at PwC, artificial intelligence can add an estimated $15.7 trillion to the global economy by 2030. This is an enormous addressable market that can create a laundry list of winners. But it doesn't mean every AI stock will automatically be a winner moving forward.
Image source: Getty Images.
Billionaire money manager Stanley Druckenmiller, who oversees nearly $4.1 billion in assets at Duquesne Family Office, has been especially picky when it comes to AI stocks. Thanks to quarterly filed Form 13Fs, investors can track the stocks Wall Street's savviest fund managers have been buying and selling,
In Druckenmiller's case, he jettisoned his fund's entire stake in the face of the AI revolution, Nvidia (NVDA 1.53%), and has absolutely piled into his new favorite trillion-dollar AI stock.
Nvidia gets shown the door
Arguably, no company has fueled the evolution of AI quite like Nvidia. According to some analysts, its Hopper (H100), Blackwell, and Blackwell Ultra graphics processing units (GPUs) collectively account for a 90% or greater share of the GPUs currently deployed in enterprise data centers.
In addition to its AI-accelerating chips being exceptionally popular with businesses, its hardware has proven superior on a compute basis to external competitors.
CEO Jensen Huang has spared no expense to accelerate innovation and bring an advanced AI chip to market annually. Rivals already can't match Hopper, Blackwell, and Blackwell Ultra, and they may fall even further behind when Nvidia debuts its Vera Rubin GPU later this year. These competitive advantages have translated into outstanding pricing power and a notable uptick in the company's gross margin.
But in spite of these advantages, Duquesne's billionaire boss bid adieu to his fund's stake in Nvidia during the June-ended quarter of 2024.
NASDAQ: NVDA
Key Data Points
It's certainly plausible that simple profit-taking played a role in his decision to send Nvidia stock packing. Shares of the company began soaring in early 2023 and haven't looked back. The average hold time for the more than 60 securities in Duquesne's investment portfolio, as of Sept. 30, 2025, is less than seven months, which indicates that Druckenmiller isn't afraid to cash in his chips when presented with an opportunity to do so.
However, there may be more to this story than meets the eye.
For example, in a May 2024 interview with CNBC, Druckenmiller acknowledged that he'd sold a meaningful portion of his fund's Nvidia stake in March 2024. While he reiterated that he's optimistic about the long-term potential for AI, he also proclaimed that "AI might be a little overhyped now, but underhyped long term."
One of the unpleasant truths of every next-big-thing technology over the last three decades is that they all, eventually, navigate their way through early stage bubble-bursting events. All technologies need adequate time to mature and evolve. Unfortunately, investors commonly overestimate corporate adoption rates and optimization timelines, leading to lofty expectations not being met.
Duquesne's billionaire investor may have also anticipated an increase in competition.
Although Nvidia's AI hardware is virtually unmatched in compute potential, the biggest risk to the company's dominance may come from within. Many of its top customers by net sales are internally developing GPUs to use their AI-accelerated data centers. Even with these chips unable to match Nvidia's hardware, they're considerably cheaper and more accessible. Internal competition could put a serious dent in GPU scarcity, thusly harming Nvidia's pricing power and gross margin.
Image source: Getty Images.
Billionaire Stanley Druckenmiller purchased his No. 1 AI stock in four of the last five quarters
However, Druckenmiller has also done his fair share of buying in the artificial intelligence arena. For over a year, no AI stock has stood out as his new favorite quite like world-leading chip fabricator Taiwan Semiconductor Manufacturing (TSM 4.96%).
According to 13Fs, Duquesne has purchased shares of TSMC, as Taiwan Semiconductor is more commonly known, for four out of the last five (reported) quarters:
- Q3 2024: 57,355 shares purchased
- Q4 2024: 50,160 shares purchased
- Q1 2025: 491,265 shares purchased
- Q2 2025: 166,305 shares purchased
- Q3 2025: No additional shares purchased (765,085 total shares held)
The near-parabolic ascent of TSMC's stock and its ascension above a $1 trillion market cap have been fueled by the insatiable demand for AI-GPUs. TSMC is expanding its monthly chip-on-wafer-on-substrate capacity to meet growing demand from Nvidia, Advanced Micro Devices, and other GPU developers. The extensive backlog tied to AI-GPU chip manufacturing should allow Taiwan Semi to sustain a double-digit growth rate for the foreseeable future.
NYSE: TSM
Key Data Points
Another factor that's likely attracted Duquesne's billionaire chief to TSMC is that it's not solely reliant on AI chip fabrication.
While there's no mistaking that AI is the primary catalyst lighting a fire beneath TSMC's rapid growth, it also manufactures central processing units, solutions used in Internet of Things devices, and is a key supplier of advanced chips for Apple. In other words, an entire world of opportunity exists for TSMC beyond the AI arena. If an AI bubble were to form and burst, it wouldn't necessarily pull the rug out from beneath Taiwan Semiconductor.
There's a value proposition with TSMC that Druckenmiller likely found attractive, as well. When Duquesne's boss began gobbling up shares of the world's leading chip fabricator, it was valued at just 12 to 18 times forward-year earnings and sported double-digit annual sales growth. Although TSMC's current forward price-to-earnings ratio of 25 isn't expensive, shares are no longer the screaming bargain they once were.
