Billionaire Stanley Druckenmiller ran Duquesne Capital between 1981 and 2010. The hedge fund returned about 30% annually without a single down year during that period.
Today, Druckenmiller only manages his own money through Duquesne Family Office, and he made some interesting trades in the fourth quarter. He sold his stake in Meta Platforms (META 3.65%) and bought shares of Amazon (AMZN 1.21%), a stock up 210,000% since its IPO in 1997.
Importantly, the fourth quarter ended about 45 days ago, so investors need to reevaluate both companies based on current information before making the same trades. Here are the important details.
Image source: Getty Images.
Meta Platforms: The stock Stanley Druckenmiller sold in the fourth quarter
Meta owns the three most popular social media platforms as measured by monthly active users: Facebook, Instagram, and WhatsApp. That affords the company valuable insight into consumer behavior and interests, which supports precise ad targeting. That advantage has helped Meta become the second-largest adtech company in the world.
Meta has doubled down on that advantage by investing heavily in artificial intelligence (AI). The company has developed machine learning models that retrieve, rank, and recommend content, as well as tools that help advertisers create and optimize campaigns. Additionally, Meta has developed custom chips to train and run the underlying models.
Meta reported encouraging financial results in the fourth quarter. Revenue increased 24% to $59.9 billion as more engaging content drove an increase in ad impressions, and better ad performance allowed the company to charge more per ad. However, net income increased just 11% to $8.88 per diluted share, growing more slowly than the top line due to aggressive AI spending.
Billionaire Bill Ackman at Pershing Square recently told clients, "We believe concerns around Meta's AI-related spending initiatives are underestimating the company's long-term upside potential from AI." For instance, Meta dominates the nascent smart glasses market and sees an opportunity to combine smart glasses with superintelligence to create a product that could eventually replace many smartphone functions.
Wall Street estimates the company's earnings will increase at 19% annually over the next three years, which makes the current valuation of 27 times earnings look quite reasonable. Stanley Druckenmiller may have sold Meta due to concerns about the near-term implications of heavy AI spending, but investors with a time horizon of five years should consider buying a position today.
NASDAQ: META
Key Data Points
Amazon: The stock Stanley Druckenmiller bought in the fourth quarter
Amazon has a strong position in three large industries: It operates the largest e-commerce marketplace in North America and Western Europe, it is the largest retail advertiser in the world (and the third-largest adtech company overall), and Amazon Web Services (AWS) is the largest public cloud in terms of infrastructure and platform services spending.
Like Meta, Amazon is leaning into strength in its core markets by investing aggressively in AI. The company has developed hundreds of generative AI applications to improve margins across its retail business, including tools that optimize demand forecasting, inventory placement, workforce productivity, robot efficiency, and last-mile delivery routes.
Similarly, AWS has introduced new products and services at every layer of the computing stack: custom AI chips for training and inference workloads at the infrastructure layer, developer tools for creating generative AI and machine learning software at the platform layer, and AI agents for coding, performance monitoring, and security at the application layer.
The stock is down 12% since the company announced fourth-quarter earnings, primarily because Amazon plans to spend $200 billion on capital expenditures in 2026, up 56% from 2025. But investments in AI are bearing fruit: In the fourth quarter, AWS sales accelerated to the fastest pace in 13 quarters, driven in part by triple-digit sales growth in custom chips. And excluding one-time charges, operating margin increased 1.5 percentage points.
Wall Street expects Amazon's earnings to increase at 17% annually over the next three years, which makes the current valuation of 29 times earnings look attractive. I think Stanley Druckenmiller made the right call in buying shares in the fourth quarter, and long-term investors should consider doing the same right now.
