Why Billionaire Stanley Druckenmiller Dumped AI Darlings Nvidia and Palantir—And What He's Buying Instead

The Contrarian Move That’s Raising Eyebrows

Quarterly 13F filings offer a fascinating window into the decision-making of Wall Street’s most successful money managers. And Stanley Druckenmiller’s recent trading activity is causing quite a stir. The billionaire investor behind Duquesne Family Office just made a bold contrarian call: completely exiting his positions in two of the hottest artificial intelligence stocks while aggressively accumulating shares in a pharmaceutical turnaround that’s delivered explosive returns.

When AI Darlings Hit Valuation Red Flags

Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) are undeniably the heavyweight champions of the AI space. Nvidia’s graphics processing units dominate the data center landscape with virtually no competitors matching its computational firepower. Palantir’s Gotham and Foundry platforms remain irreplaceable tools for government agencies and military operations worldwide.

Yet despite their competitive moats, Druckenmiller sent both packing during 2024 and early 2025. In Q3 2024, he liquidated all 214,060 shares of Nvidia. By March 31, 2025, he’d exited his entire position of 769,965 Palantir shares.

While profit-taking could explain the moves—Duquesne’s average holding period sits below seven months—there’s likely more to the story. Druckenmiller warned in a May 2024 CNBC interview that “AI might be a little overhyped now, but underhyped long term,” hinting at concerns about early-stage technology bubbles that inevitably precede adoption.

More telling are the valuations. Nvidia and Palantir’s price-to-sales ratios recently hit 31 and 152 respectively—levels that history suggests signal bubble territory. For market-leading megacap companies at the forefront of transformative trends, P/S multiples above 30 rarely prove sustainable. If that bubble deflates, both stocks would face significant headwinds.

The Turnaround Play Nobody Expected

While liquidating AI exposure, Druckenmiller was simultaneously loading up on Teva Pharmaceutical Industries (NYSE: TEVA) with remarkable conviction. Over four consecutive quarters spanning July 2024 through June 2025, Duquesne accumulated shares aggressively:

• Q3 2024: 1,427,950 shares purchased
• Q4 2024: 7,569,450 shares purchased
• Q1 2025: 5,882,350 shares purchased
• Q2 2025: 1,089,189 shares purchased

Total accumulated position: 15,968,935 shares, now representing Druckenmiller’s second-largest holding.

Teva exemplifies textbook turnaround dynamics. For nearly eight years, the company hemorrhaged value: lost exclusivity on blockbuster Copaxone, watched generic drug pricing deteriorate, and battled opioid litigation. The transformation began in earnest when Teva settled its opioid case with 48 states for $4.25 billion in early 2023—a resolution that finally cleared the litigation cloud.

Repositioning Toward Higher-Margin Growth

The settlement unlocked management’s ability to pivot strategy. Under former CEO Kare Schultz, Teva trimmed operations and divested non-core assets. Current CEO Richard Francis accelerated the offensive, shifting focus from commoditized generics toward higher-growth novel therapeutics.

This strategic repositioning is already bearing fruit. Teva’s tardive dyskinesia treatment Austedo is now projected to generate over $2 billion in annual peak sales—a branded drug commanding vastly superior margins compared to volume-driven generic therapies. The latest earnings cycle saw management raise full-year guidance for Austedo again, signaling strong execution.

Balance sheet progress has been equally impressive. Net debt has plummeted from over $35 billion post-Actavis acquisition to below $16.6 billion as of September 30, providing the financial flexibility to fund faster-growing initiatives.

The Valuation Asymmetry

Perhaps most striking: Teva trades at a forward price-to-earnings ratio of just 8.6—a stark contrast to the stratospheric multiples commanding Nvidia and Palantir. Since mid-2023, Teva shares have appreciated 218%, rewarding early believers in the company’s transformation narrative.

Druckenmiller’s portfolio positioning—aggressively reducing exposure to richly valued AI stocks while piling into a deeply discounted turnaround story—reflects a time-tested investment principle: buy when assets trade below intrinsic value and sell when euphoria inflates multiples beyond reason. The question now is whether other sophisticated investors will follow his lead or remain trapped in the AI momentum narrative.