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Form 13Fs, filed quarterly, provide an invaluable snapshot for investors of which stocks Wall Street’s greatest money managers have been buying and selling.
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Billionaire Stanley Druckenmiller exited his fund’s respective stakes in AI stocks Nvidia and Palantir — and profit-taking may tell only part of the story.
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One of the newest apples of Druckenmiller’s eye is an internet-driven company that’s decisively turned the corner to recurring profitability.
For many investors, earnings season is the most exciting period of each quarter. This is the six-week span where most S&P 500 components report their operating results and provide investors with a clear look at how healthy the U.S. economy and corporate America are.
But staying abreast on earnings reports isn’t the way for investors to gain an edge. The quarterly filing for Form 13Fs with the Securities and Exchange Commission can be equally valuable.
A 13F is a required filing no later than 45 calendar days following the end to a quarter for institutional investors with at least $100 million in assets under management. It provides a snapshot for investors of which stocks, exchange-traded funds (ETFs), and select options Wall Street’s savviest fund managers have been buying and selling.
Though Warren Buffett is the ideal example of a money manager whose trades are closely followed by professional and everyday investors, he’s not he only billionaire with a phenomenal investment track record. Duquesne Family Office’s Stanley Druckenmiller knows a thing or two about finding amazing deals hiding in plain sight.
Druckenmiller oversees an active fund, with an average hold time for the 69 securities currently in Duquesne’s investment portfolio of just 2.26 quarters (less than seven months). He’s an especially big fan of growth stocks — but also not shy about locking in gains when the opportunity presents itself.
Over a one-year stretch (July 1, 2024 – June 30, 2025), based on 13Fs, Duquesne Family Office’s billionaire boss has sent Wall Street’s artificial intelligence (AI) darlings Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) packing, all while piling into a surging Singapore-based growth stock that’s delivering double-digit sales growth from all three of its operating segments.
No trend has captivated the attention and capital of investors quite like AI has over the last three years. Empowering software and systems with AI solutions is a potential game-changer than can add trillions of dollars in global economic value in the years to come.
Nvidia’s claim to fame is its graphics processing units (GPUs), which are the preferred choice by businesses as the brains of high-compute data centers. Nvidia’s Hopper, Blackwell, and Blackwell Ultra chips have proved far superior to external AI-GPUs in compute potential, and CEO Jensen Huang intends to keep it that way. Huang is spearheading the launch of a new advanced AI chip on an annual basis.
Meanwhile, Palantir’s jaw-dropping returns are the result of its two core AI-driven software-as-a-service (SaaS) platforms not being replicable at scale. Gotham is a SaaS platform relied on by the U.S. government and its close allies to plan and oversee military missions, as well as collect and analyze data. The other key platform, which is newer, is Foundry. This subscription-based service helps businesses better understand their data in order to streamline their operations.
In spite of these competitive edges, billionaire Stanley Druckenmiller parted ways with both stocks, in their entirety. During the third quarter of 2024, he dumped all 214,060 shares of Nvidia. As for Palantir, close to 770,000 shares were disposed of from June 30, 2024 through March 31, 2025.
The logical catalyst for exiting Wall Street’s two-hottest AI stocks is profit-taking. With shares of Nvidia and Palantir soaring over the last three years, locking in gains made sense.
However, profit-taking might explain only part of the story behind Druckenmiller’s selling activity.
In an interview with CNBC in May 2024, Duquesne’s billionaire chief suggested, “AI might be a little overhyped now, but underhyped long term.” Druckenmiller’s words speak to the reality that investors have overestimated the adoption rate and early innings utility of every game-changing technological innovation for more than three decades.
Bubbles associated with next-big-thing trends have been something of the norm. If an AI bubble were to form and burst, Nvidia would likely be hit the hardest, with Palantir being dragged down in sympathy.
Druckenmiller may also be turned off by Nvidia’s and Palantir’s respective valuations. As of the closing bell on Oct. 17, Nvidia and Palantir were sporting respective trailing-12-month (TTM) price-to-sales (P/S) ratios of 27 and 131. For context, history tells us that leaders of next-big-thing trends have never been able to sustain TTM P/S ratios near/above 30 for any extended period.
Based on the previous four 13F filings from Duquesne Family Office, billionaire Stanley Druckenmiller has overseen the addition of dozens of new stocks to his fund. One of the more eye-popping additions has to be internet-driven business Sea Limited (NYSE: SE), whose shares have rallied by 243% over the trailing-two-year period.
In the June-ended quarter, Duquesne’s investment chief purchased 309,730 shares of Sea, which marks Druckenmiller’s fourth separate instance of ownership in the company since the start of 2019.
During the early stages of the COVID-19 pandemic, Sea Limited was one of the hottest stocks on Wall Street. With people staying home, internet-based businesses thrived. Between the start of 2020 and October 2021, Sea’s shares rose by more than 700%.
But there were also clear concerns that Sea was a flash in the pan. As the worst of the pandemic passed, its losses came into focus. The decision by management to forgo double-digit sales growth in favor of profits didn’t initially sit well with Wall Street or investors. However, hindsight is 20-20, and it looks to have been a smart move by Sea’s executive team.
Today, Sea Limited is quite profitable and once again growing its sales by 20% or more on an annual basis. This is due to all three of the company’s operating segments expanding their respective top-lines by a double-digit percentage.
Historically, Sea’s digital gaming division, known as Garena, has been its most-profitable segment. During the pandemic, online mobile game Free Fire enjoyed a surge in total players and paying gamers. As of the June-ended quarter, Sea had nearly 665 million active users playing mobile games, of which 9.3% were paying to play. This percentage is well above the industry average, which shows why this segment has consistently been the company’s most profitable.
Sea’s second (and newest) operating segment is digital financial services. With Sea operating in countries that are chronically underbanked, digital financial services can provide an unmet need. Sales were up 70% to almost $883 million in the June-ended quarter from the prior-year period, with non-performing loans holding firm at 1% of outstanding loans on a quarter-over-quarter basis.
But the bread-and-butter of Sea’s operations is its e-commerce platform Shopee. Based on the $29.8 billion in gross merchandise value (GMV) processed in the June-ended quarter, Shoppe is pacing more than $119 billion in annual run-rate GMV. Flipping to profitability in this segment is key, as it offers a long runway of growth in regions where online retail sales are taking off.
If these three segments continue to fire on all cylinders, additional upside may be possible for Sea stock.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, and Sea Limited. The Motley Fool has a disclosure policy.
Billionaire Stanley Druckenmiller Dumped His Fund’s Stakes in Nvidia and Palantir to Pile Into an International Growth Stock That’s Rallied 243% in 2 Years was originally published by The Motley Fool