Stanley Druckenmiller Dumps Alphabet After Boosting Stake 277% Last Quarter — Here's What He's Buying Now

Stanley Druckenmiller is known for running his $12 billion Duquesne Capital Management for decades before shutting it down in 2010 for managing money through his family office. He had worked with George Soros until 2000, and they are known for shorting the British Pound in 1992 for massive gains.

Duquesne Family Office currently has nearly $4.5 billion worth of assets under management. The family office has generated an impressive three-year annualised returns of 39.37% on an equal-weighted basis throughout years of market volatility.

According to the latest 13F form filed with the US Securities and Exchange Commission, Druckenmiller's family office made several changes to his portfolio, with the Alphabet trade standing out due to massive profits generated in a short span.

In Q1, Duquesne offloaded its entire stake in Alphabet, selling all 385,000 class A shares worth $152.7 million based on the closing price of $396.78 per share as of Friday.

This move is surprising because Druckenmiller had just bumped his stake in Alphabet by 277% in Q4 to 385,000 shares from 102,200 shares in Q3.

Stock Sale Despite Massive Returns

Druckenmiller's move comes as the stock of Google's parent company has surged over 25% year-to-date and 137.8% in the past year amid the AI boom.

The former hedge fund manager added Alphabet to his family office's portfolio in Q3 before selling it two quarters later. In this duration, Duquesne managed to generate impressive profits of 52.7% from the stock, according to estimates from HedgeFollow.

While Druckenmiller's stock trades could be simply viewed as profit-taking activity, Bank of America analysts Justin Post believes there could be deeper reasons.

The analyst recently shared in a research note to clients that the Alphabet stock faces multiple downside risks, including loss of search traffic to AI tools from rivals, LLM integration in search taking longer-than-expected, revenue pressures from compliance with the EU Digital Markets Act, and scope for rising capex and lower free-cash-flow amid AI investments.

However, the Bank of America analyst believes Google I/O could bolster confidence in AI positioning, but there is a near-term risk that a lack of a 'wow' announcement could mount pressure on the stock.

'We think Google could enhance its AI subscription offerings within premium Pro and Ultra tiers focused on higher limits, and broader agent capabilities, while extending AI bundling across the hardware ecosystem and Chrome,' the analyst wrote.

Even Bill Ackman's Pershing Square sold its stake in Alphabet in Q1, but for totally different reasons. Ackman opened a new position in Microsoft and used proceeds from Alphabet stake sale to fund the new trade.

'To be clear, our sale ‌of ⁠Google was not a bet against the company. We are very bullish long term ​on ​Alphabet. ⁠But at current valuations and in light ​of our finite capital ​base, ⁠we used as a source of funds for Microsoft,' ⁠Ackman ​wrote in an X post ​on Saturday.

Druckenmiller Adds Intel, Arm, Cloudflare to Portfolio in Q1

The billionaire investor also made other notable trades in Q1, opening new positions tech sectors. The family office purchased around 411,000 shares worth $18.2 million in Q1, alongside a new stake in Arm Holdings of about 107,000 shares worth $16.1 million as well as 52,500 shares Cloudflare for $10.8 million.

Druckenmiller added more new companies to the portfolio, including 196,000 shares of Broadcom, 50,700 shares of Seagate Technology, 182,000 shares of Twilio, and 138,000 shares of Humana. He also boosted its stake in genetic testing company Natera as well as STMicroelectronics and Roku in Q1.

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