One of the best investors riding the artificial intelligence (AI) revolution is Stanley Druckenmiller at the Duquesne Family Office. Druckenmiller is a famous trend follower and was one of the early traders to buy into Nvidia (NVDA -2.01%) as a way to ride the AI boom.
Today, Duquesne and Druckenmiller own two megacap stocks benefiting from AI infrastructure spending, but his top holding by far is an undiscovered winner in genetic testing that few investors are talking about.
Stanley Druckenmiller. Image source: Getty Images.
Investing in AI infrastructure
Regarding AI infrastructure, Druckenmiller holds stakes in two megacap technology companies in the United States: Amazon (AMZN -0.60%) and Alphabet (GOOGL -0.03%) (GOOG +0.02%). Today, we can see these bets primarily benefiting from growing AI spending.
Amazon's cloud computing division -- Amazon Web Services (AWS) -- is the leader in its sector and saw revenue grow 37% year-over-year last quarter to $42.2 billion. There is a massive backlog of spending on its AI cloud services, which power fast-growing start-ups like Anthropic and OpenAI. CEO Andy Jassy recently mentioned that AWS could grow to $1 trillion in annual revenue, driven by cloud market share gains and rising total spending on computing infrastructure worldwide.
Alphabet is a bit of a different bet, as it combines the fast cloud growth with the dynamics of the consumer and enterprise AI application economy. The Google Cloud division grew revenue by 82% year-over-year to $24.8 billion, catching up quickly to AWS, though it remains much smaller. Alphabet is growing quickly with its Gemini chatbot, now serving nearly 950 million monthly users, but its Google Search division faces significant competitive pressures.
Overall, these two stocks are a small % of the Duquesne portfolio today, but they have been nice long-term winners for Druckenmiller.
An underfollowed top holding in genomics
Notably, close to 20% of Druckenmiller's portfolio, as of his latest quarterly filing -- excluding international holdings -- is a stock called Natera (NTRA -1.23%). Natera is a disruptor in the diagnostics segment and uses its technologies for analyzing tumors and women's health during pregnancies, along with organ transplants.
NASDAQ: NTRA
Key Data Points
Last quarter, Natera's revenue grew 38% year over year to $753 million, due to an increase in tests performed. Full-year revenue guidance was raised as well. Accelerating business momentum is why the stock has been a huge winner for Druckenmiller.
Duquesne first invested in Natera in Q3 of 2022, when the share price was between $35 and $50. Today, it trades at $328, closing in on about 10 times the initial cost basis (the exact figure is unknown). Natera has been a massive winner for Druckenmiller, which is why it is the largest U.S. stock he owned at the end of last quarter.
Why doesn't he own Nvidia anymore?
Curiously, even though he was an early bettor on Nvidia, Druckenmiller's Duquesne Family Office currently does not own any of the AI chipmaker. He said in 2024 that he sold Nvidia after it went on a massive run, with sales coming at a split-adjusted price of $80 to $90. Today, Nvidia trades at $230.
The reason for the sale was valuation concerns, but he subsequently said it was a mistake not to let his winners run. Nvidia has not been in the Duquesne portfolio since early 2024.
Druckenmiller's current bet on AI semiconductors is Taiwan Semiconductor Manufacturing. This is the company that actually builds Nvidia chips (Nvidia just designs them). It could be another way to take advantage of the AI trend, but with a stock trading at a more reasonable valuation and a monopoly position in advanced chipmaking at the moment.
