Billionaire Stanley Druckenmiller Sold His Entire Stake in Palantir in Favor of a Smoking-Hot High-Yield Dividend Stock That's Doubled in 15 Months
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Duquesne Family Office's billionaire chief dumped Wall Street's hottest artificial intelligence (AI) stock for a time-tested company that's successfully reinventing itself before our eyes.
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July 8, 2025
03:51 AM
The Motley Fool
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Duquesne Family Office's billionaire chief dumped Wall Street's hottest artificial intelligence (AI) stock for a time-tested company that's successfully reinventing itself before our eyes
Nothing bears more importance on Wall Street than data
The only blem is the sheer amount of information investors have to digest can be overwhelming and allow something of importance to slip through the cracks
For example, the heart of earnings season marked the filing deadline (May 15) for Form 13F with the Securities and Exchange Commission
This is a required filing no later than 45 calendar days ing the end to a quarter by institutional investors with at least $100 million in asset under management (AUM)
Its purpose is to vide a concise snapshot for investors of which stocks Wall Street's brightest investment minds purchased and sold in the quarter
Keeping close tabs on 13Fs is how investors have been able to ride Warren Buffett's coattails to significant long-term gains
However, Buffett is far from the only billionaire asset manager known for their keen investment insights and outsized returns
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Stanley Druckenmiller of Duquesne Family Office is another billionaire who has a knack for picking out winners
Druckenmiller runs a fairly active fund that closed out the March quarter with more than $3 billion in AUM spread across 52 securities (stocks and options contracts)
Though Duquesne's billionaire chief has moved in and out of dozens of stocks over the previous year (April 1, 2024 – March 31, 2025), based on 13Fs, Druckenmiller's investment activity in two industry titans stands out
Specifically, he jettisoned his fund's entire stake in high-flying artificial intelligence (AI) stock Palantir nologies (PLTR 3. 54%) and has piled into a high-yield dividend stock that's doubled in value since April 2024
Stanley Druckenmiller dumped Palantir (and it may have to do with more than fit taking) Spanning the previous four 13Fs (a one-year period), Duquesne Family Office has completely exited 55 positions
Debatably, the most eye-popping sale is that of AI data-mining specialist Palantir
Between the end of March 2024 and the close of the first quarter of 2025, billionaire Stanley Druckenmiller sold a 769,965- stake
Since 2023 began, Palantir stock has rallied by nearly 2,000%
The company's sustained sales growth of 25% to 35%, its highly predictable operating cash flow, and the irreplaceability of its government-focused Gotham platform and enterprise-powered Foundry platform at scale, have made it a stock to own
With the average stock in Druckenmiller's fund held for less than nine months, there's a reasonable chance this selling activity in Palantir represented nothing more than simple fit-taking
After all, megacap and industry-leading companies don't typically increase in value by 2,000% in 30 months
But there may be more to Druckenmiller dumping Palantir stock than meets the eye
For starters, Duquesne's billionaire investor believes artificial intelligence may be overhyped in the short run
While Druckenmiller views AI as a long-term corporate growth driver, he rightly recognizes that every next-big-thing trend for more than three decades has endured a bubble-bursting event early in its expansion
Considering that most es aren't yet generating a positive return on their AI investments, nor are they optimizing their AI solutions, we're ly witnessing the early stages of an AI bubble
If history were to repeat and the AI bubble bursts, Palantir stock would almost certainly feel the pain
Though its government contract revenue and subscriptions would help insulate its existing sales, negative investor sentiment would make Palantir stock a target
Another reason Druckenmiller may have sent all of his fund's Palantir s to the chopping block is its indefensible valuation
While companies with double-digit sales growth and sustainable moats do deserve some form of valuation premium, Palantir has pushed the envelope of reason
It closed out the July 3 trading session at a trailing-12-month price-to-sales ratio of 107, which is roughly triple the level where other megacap companies on the leading edge of next-big-thing innovations have previously had their bubbles pop
Lastly, Palantir's earnings quality isn't all that it's cracked up to be
Last year, 40% of its pre-tax income traced back to interest earned on its cash
This makes Palantir's nosebleed valuation all the more egregious
Image source: Getty Images
Duquesne's billionaire chief piled into this smoking-hot high-yield dividend stock But while billionaire Stanley Druckenmiller was showing s of Palantir to the door, he was rolling out the red carpet for what's become one of the Wall Street's smoking-hot high-yield dividend stocks
Between April 1, 2024 and March 31, 2025, Duquesne Family Office built up a 1,105,268- position in tobacco colossus Philip Morris International (PM 1
It's no secret that tobacco stocks have faced numerous growth headwinds for more than a decade
Stringent marketing regulations in developed countries, coupled with campaigns by health agencies to educate consumers the dangers of long-term tobacco use, have weighed on demand for traditional tobacco ducts
But in spite of these headwinds, Philip Morris International stock has doubled over the last 15 months
Even with Druckenmiller modestly paring his fund's stake in Philip Morris during the March- quarter, it's still Duquesne's fifth-largest holding (apximately 5. 7% of invested assets, as of March 31)
One of Philip Morris' prime advantages is that it's an international tobacco company that's servicing in the neighborhood of 180 countries
Even if cigarette shipment volume dips in developed countries where marketing is restrictive, there's a good chance demand for tobacco ducts in faster-growing emerging remains strong
In many emerging, tobacco is something of a luxury
Don't overlook the additive nature of tobacco ducts, either
Tobacco contains nicotine, which is an additive substance
Smokers have demonstrated a willingness to absorb price increases that, in many instances, more than offset any shipment volume declines to developed countries
But what's really set Philip Morris International's stock ablaze is the company's smoke-free
This is the segment that houses its IQOS heated tobacco system, as well as its Zyn nicotine pouches
Total heated tobacco units sold in the March- quarter rose nearly 12% year-over-year to 37. 1 billion, with IQOS' market (in applicable countries) climbing
As for Zyn, 223. 4 million cans were shipped in the first quarter, representing more than 53% year-over-year growth
We're witnessing the real-time transformation of Philip Morris from a traditional tobacco company to one that features smoke-free solutions -- and it's reaccelerated Philip Morris' growth rate
Druckenmiller may also be attracted to Philip Morris' rock-solid payout
Its base annual dividend of $5. 40 per works out to a 3% yield, which is more than double the average yield of S&P 500 companies
Though Philip Morris International stock is no longer a screaming bargain at 22 times forward-year earnings, it does have a knack for blowing the doors off of Wall Street's consensus fit forecasts
If it can continue to do so, its s may still have room to run
Sean Williams has no position in any of the stocks mentioned
The Motley Fool has positions in and recommends Palantir nologies
The Motley Fool recommends Philip Morris International
The Motley Fool has a disclosure policy.
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