TLDR

Billionaire Stanley Druckenmiller completely sold his Nvidia and Palantir positions in 2024, calling them overvalued despite continued gains.
Druckenmiller increased his Microsoft stake in Q2, viewing it as a better value play for AI growth.
Microsoft reported Q1 earnings of $3.72 per share on $77.7 billion revenue, beating analyst forecasts.
The tech giant took a $3.1 billion accounting charge related to its $13 billion OpenAI investment.
Azure cloud revenue grew 40% while Microsoft now holds 27% of OpenAI valued at $135 billion.

Billionaire investor Stanley Druckenmiller has made a major portfolio shift. He sold his entire positions in Nvidia and Palantir Technologies. The money moved into Microsoft instead.

Druckenmiller first purchased Nvidia shares in Q3 2022. He increased his stake in Q4 that year. The chipmaker became his family office’s largest holding before he sold everything in 2024.

He also exited Palantir completely by year-end 2024. He originally bought the stock in early 2021. It grew into one of his largest positions.

The reason for selling was simple. Both stocks became too expensive. “A lot of what we recognized has become recognized by the marketplace now,” Druckenmiller told CNBC.

Nvidia now trades above 40 times forward earnings. Palantir’s valuation reached 287 times forward earnings. That’s up from 118 times at the end of 2024.

Since Druckenmiller’s comments, Nvidia stock has doubled. He hasn’t shown interest in buying back in. The same applies to Palantir.

Microsoft Becomes Top AI Pick

Druckenmiller made Microsoft one of his biggest Q2 purchases. The stock was once his largest position. He has owned it multiple times throughout his career.

Microsoft Corporation, MSFT

Microsoft reported strong Q1 results. Earnings hit $3.72 per share on $77.7 billion revenue. Wall Street expected $3.68 per share and $75.5 billion revenue.

The stock fell 2% despite beating estimates. Investors worried about spending. Capital expenditures jumped 74% to $34.9 billion. Half went toward GPUs and CPUs for Azure.

Commercial cloud revenue reached $49.1 billion, up 26% year over year. Azure revenue grew 40%. The Intelligent Cloud segment generated $30.9 billion, above the $30.2 billion estimate.

Azure’s growth came from AI services demand. Revenue from these services grew 157% in late 2024. Management says demand exceeds supply.

OpenAI Partnership Changes

Microsoft’s net income took a $3.1 billion hit this quarter. The charge came from an equity method investment in OpenAI. It reduced earnings per share by 41 cents.

Microsoft has invested $13 billion total in OpenAI. Through September, $11.6 billion was funded. The timing matched OpenAI’s recapitalization.

Microsoft now owns 27% of OpenAI valued at $135 billion. The new deal changed key terms. Microsoft lost first right of refusal for compute services.

But OpenAI committed to $250 billion in Azure purchases. CEO Satya Nadella called it “one of the most successful partnerships and investments our industry has even seen.”

The partnership started in 2019, before ChatGPT launched. OpenAI can now use other cloud providers. The company partnered with Oracle for Stargate Project data centers.

Microsoft added OpenAI to its competitor list last year. The filing named OpenAI as a rival in AI offerings, search, and news advertising. Microsoft also began testing its own AI model in August.

Druckenmiller’s move reflects his view on AI valuations. Microsoft trades at a premium but offers better value than Nvidia or Palantir. The company’s enterprise software business supports Azure growth while generating steady cash flow.

The post Billionaire Druckenmiller Exits Nvidia and Palantir, Chooses Microsoft for AI Exposure appeared first on Blockonomi.

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Filed under: Bitcoin - @ October 30, 2025 12:25 pm