Billionaire Stanley Druckenmiller ran Duquesne Capital between 1981 and 2010. The hedge fund returned 30% annually without a single down year during that period, which qualifies him as one of the most successful money managers in history. Druckenmiller does not take clients anymore, but he still manages his own wealth through Duquesne Family Office.
In the third quarter, Druckenmiller sold his position in semiconductor company Broadcom (AVGO +2.63%) and started a position in flash memory maker Sandisk (SNDK +1.07%), a stock that has added 1,050% since it was spun off from Western Digital in February 2025.
Here's what investors should know about these artificial intelligence stocks.
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Broadcom
Broadcom has a dominant position in three semiconductor markets: wireless networking, wired (Ethernet) networking, and application-specific integrated circuits (ASICs). Strength in Wi-Fi chips is important, as the market is forecast to grow at 15% annually until 2030, according to Grand View Research, but leadership in the other two end markets is more consequential, as it makes Broadcom a key supplier of artificial intelligence (AI) infrastructure.
Particularly important is that Broadcom has about 75% market share in AI ASICs, custom chips that are purpose-built to accelerate training and inference workloads. The company has long designed AI ASICs for Alphabet's Google and Meta Platforms, and it more recently started designing custom accelerators for OpenAI and Anthropic.
Broadcom CEO Hock Tan said AI revenue (from networking chips and ASICs) rose 65% to $20 billion in 2025. That figure will likely increase rapidly in coming years as hyperscalers and AI start-ups invest in data center infrastructure. Indeed, Beth Kindig at the I/O Fund expects AI sales to triple by 2027, and Harlan Sur at JPMorgan Chase estimates AI sales will increase more than 5x to $110 billion by 2027.
Wall Street estimates Broadcom's adjusted earnings will grow at 43% annually through 2027, which makes the current valuation of 51 times earnings look quite reasonable. Most analysts who follow the company agree. Broadcom has a median target price of $461 per share, which implies 34% upside from its current share price of $343. I think Druckenmiller sold this stock too soon.
NASDAQ: SNDK
Key Data Points
Sandisk: The AI stock Stan Druckenmiller bought in the third quarter
Sandisk manufactures data storage solutions based on NAND flash technology for data centers, personal computers, mobile devices, video game consoles, and automotive systems. It benefits from a strategic partnership with Kioxia, a Japanese company with which it shares capital expenditures and research and development costs related to wafer fabrication and memory design.
Flash memory devices like solid-state drives (SSDs) are more expensive than hard-disk drives (HDDs), but they are also faster, more durable, and more efficient in their use of power. Therefore, SSDs are used when performance is the top priority, such as for training AI models and running AI applications. But HDDs are used when cost is the top priority, such as for long-term storage for large datasets.
Importantly, beyond its partnership with Kioxia, Sandisk also realizes cost efficiencies and supply chain security from vertical integration. The company designs process technology, manufactures flash memory wafers, packages wafers into chips, integrates chips into final products, and develops the associated firmware.
Sandisk is the fifth-largest NAND flash memory manufacturer behind Samsung, SK Hynix, Kioxia, and Micron Technologies, but the company gained a percentage point of market share during the first half of 2025, and investors have reason to think that momentum will continue. Two hyperscalers recently began testing Sandisk's enterprise SSDs, and a third hyperscaler (plus a major storage original equipment manufacturer) will begin testing the products in 2026, according to management.
Wall Street estimates Sandisk's adjusted earnings will grow at 79% annually through the fiscal year ending in June 2029. That makes the current valuation of 170 times earnings look high. Sandisk shares traded at an average price of $58 during the third quarter, when Druckenmiller bought the stock, but the price has since increased 7x and no longer looks attractive. The median target price of $307 per share implies 26% downside from its current share price of $415.
