Stanley Druckenmiller, the billionaire fund manager of Duquesne Capital, is one of the world’s most preeminent investors. So when he makes portfolio moves, people take notice. Among the many moves he made in the second quarter, he closed his positions in Micron (MU -0.39%) and Intel (INTC -4.02%), while opening new stakes in Advanced Micro Devices (AMD -3.71%) and Alphabet (GOOGL +0.15%) (GOOG +0.12%).
Let’s take a closer look at these AI stocks to see if investors should follow suit.
Micron and Intel
Today’s Change
(-0.39%) $-3.66
Current Price
$937.11
Key Data Points
Market Cap
Day’s Range
$915.18 – $960.00
52wk Range
$113.46 – $1255.00
Volume
26.6M
Avg Vol
49.4M
Gross Margin
72.60%
Dividend Yield
0.06%
Given the performance of Micron and Intel’s stocks this year, Druckenmiller made some hefty profits in these positions. However, one stock certainly looks like a better option to keep holding than the other.
The stock I’d be more willing to hold is Micron. The company has been riding the memory supercycle, as supply-and-demand imbalances have caused memory prices to skyrocket. This, in turn, has led to huge surges in revenue and gross margins for Micron.
While the memory market has historically been highly cyclical, the massive AI data center infrastructure build-out has changed the market dynamics. In order for graphics processing units (GPUs) and other AI accelerators to deliver optimized performance, they need to be packaged with large quantities of high bandwidth memory (HBM), but a combination of factors is set to keep the market supply constrained for years.
Meanwhile, with the big three memory makers all focused on increasing their HBM production capacity, the entire DRAM (dynamic random access memory) market is seeing a huge price increases. Yet Micron’s stock is trading at a cheap forward price-to-earnings (P/E) ratio of just over 6.5. With the memory supercycle set to potentially last several more years, the stock looks like a buy.
With Intel, on the other hand, I would take profits and not look back. The company is riding a wave of rising demand for data center central processing units (CPUs) as hyperscalers and neoclouds prepare for an extended surge in the use of AI agents, but this appears to be more the company stumbling into good fortune rather than turning its fortunes around. Meanwhile, its foundry business continues to be a money-losing drag. With the stock no longer cheap, I’d remain on the sidelines.
Image source: Getty Images.
AMD: Riding two big trends
Today’s Change
(-3.71%) $-17.97
Current Price
$466.42
Key Data Points
Market Cap
Day’s Range
$462.55 – $487.00
52wk Range
$149.22 – $584.73
Volume
19.1M
Avg Vol
29.7M
Gross Margin
50.37%
While Druckenmiller dumped Intel, he didn’t abandon the server CPU theme; he added a stake in AMD. AMD is the leader in the CPU market, having consistently been taking share from Intel. Meanwhile, its high-core CPUs are designed specifically to handle agentic AI workloads. The company sees this becoming a $220 billion market in the coming years and believes it can win more than 50% of that market.
AMD also has a big opportunity in the AI inference market, which is expected to become much larger than the market for AI training. The company’s chiplet design enables it to package its processors with more memory, which is particularly beneficial for inference workloads. It also formed a partnership with wafer-scale engine specialist Cerebras to offer a disaggregated system designed specifically for inference. AMD’s recent acquisitions of chipmaker Taalas and memory optimization company MEXT also set it up well for this market.
With huge opportunities stemming from agentic AI and inference, AMD looks poised for explosive growth in the coming years, making the stock a solid buy.
Alphabet: The complete AI player
Today’s Change
(0.15%) $0.52
Current Price
$344.72
Key Data Points
Market Cap
Day’s Range
$340.66 – $346.73
52wk Range
$196.59 – $408.61
Volume
19.6M
Avg Vol
32.5M
Gross Margin
60.94%
Dividend Yield
0.25%
Alphabet may be the most complete AI play, so it’s easy to see why Druckenmiller made it one of his top 10 stock holdings in Q2. The tech giant has been seeing huge growth in its cloud computing segment, while its custom AI chips, called Tensor Processing Units (TPUs), give it a big cost advantage for inference workloads.
These chips also let it train its AI models more cheaply — models that it then incorporates throughout its products, including Google Search, to drive growth. Alphabet also has a big distribution edge through its ownership of the Chrome browser, the Android operating system, and a search revenue-sharing deal with Apple that makes Google the default search engine on its devices. Meanwhile, its global digital ad network helps it better monetize consumer AI than most large language model (LLM) makers.
As the company with the most complete AI stack, Alphabet looks like it will be a long-term AI winner.
