In this article, we will take a look at billionaire Stanley Druckenmiller’s 2023 portfolio and his top 10 stock picks.
Pessimism, doom and gloom was starting to be visible in Stanley Druckenmiller’s tone last year when the billionaire repeatedly warned about the upcoming collapse and recession. At a conference in New York in September last year, the 69-year old billionaire went so far as to say he’d be “stunned” if we didn’t have a recession in 2023. The reason behind Druckenmiller’s pessimism is simple. He believes quantitative easing that went on for almost a decade has created the troubles we are facing today.
Last year the billionaire said the Fed policymakers “have put themselves and the country, and most importantly the people of the country, in a terrible position.”
Druckenmiller was, however, concerned that the Federal Reserve would stop raising interest rates before reaching its target.
“I hope they finish the job. You have to slay the dragon,” Druckenmiller said.
Druckenmiller’s fear stems from his idea that inflation should be controlled and never be left unchecked. He said during his Bloomberg interview that inflation is a “killer” and to maximize employment prices should be stabilized. However, he doesn’t think controlling inflation is as simple as raising interest rates. This worked in the 1980s, according to the billionaire, because “the economy wasn’t nearly as leveraged and we had not been through an asset bubble.”
Druckenmiller Shorting Stocks
Talking to Bloomberg, Druckenmiller in September revealed that he was shorting stocks and his portfolio had been 0% to 20% short since January 5. Interestingly, Druckenmiller at the time said that crypto might gain more popularity if distrust in central banks increases.
In 2023 we saw how regional banks started to waver after the SVB collapse and crypto also posted a strong rally.
But don’t let Druckenmiller’s pessimism make you believe that it’s time to sell. On the contrary, Druckenmiller has been buying a lot of stocks and adding to his portfolio. His first quarter of 2023 portfolio shows that he bought several technology stocks, including Microsoft, Alphabet, Amazon, Taiwan Semiconductor and Marvell Technology Inc.
Druckenmiller’s Thoughts on AI
Part of the reason why the billionaire piled into technology this year is his bullishness on AI. At the 2023 Sohn Conference, Druckenmiller said that AI could be “ every bit as impactful as the internet.” In addition to buying MSFT, GOOGL and AMZN during the first quarter, his hedge fund also bought a huge stake in Iqvia Holdings Inc., a healthcare technology company which boasts AI capabilities. The company’s management briefly touched upon its Embedded Intelligence solutions in Q4 earnings call:
“As you know, IQVIA’s Human Data Science Cloud offers clients a combination of extensive data networks, data integration, and embedded intelligence, all of which help our clients deal with the challenge of increased data complexity and volume. A top-10 pharma awarded IQVIA our largest ever commercial managed services deal where we will take responsibility for managing the end-to-end commercial analytics for all their commercial brands globally. Personalization of care is becoming a focus of our customers’ commercial strategy. This quarter, IQVIA was awarded a major patient support program by a top-10 pharma for their cardiology product displacing the incumbent vendor.”
But it wasn’t just AI that Druckenmiller talked about in at the Sohn Conference. Pessimism and warnings again prevailed the billionaire’s tone as he said the major downturn and recession he has been warning about could be visible as soon as the current quarter.
While the billionaire said that the recession would not be as bad as seen in 2008, he said that “it’s just naive not to be open-minded to something really, really bad happening.”
The falling retail sales and banking crisis have made it clear to Druckenmiller that we are headed for a hard landing. Unlike others, Druckenmiller doesn’t let vague terms go undefined. He believes hard landing is when the unemployment rate exceeds 5%, corporate profits fall at least 20% and bankruptcies rise.
“Unbelievable Opportunities”
Yet, Druckenmiller said there would be a “unbelievable opportunities” in the next couple of years and recommended investors to preserve their capital before these opportunities present themselves.
Stan Druckenmiller
Our Methodology
For this article, we picked the top 10 stocks from the first quarter of the 2023 portfolio of Duquesne Family Office. Some notable names in Druckenmiller’s portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) and NVIDIA Corporation (NASDAQ:NVDA).
Billionaire Stanley Druckenmiller 2023 Portfolio: Top 10 Stock Picks
10. Amazon.com, Inc. (NASDAQ:AMZN)
Hedge Fund Stake Value: $83.4 million
Amazon.com, Inc. is a new arrival in Stanley Druckenmiller’s portfolio, as the billionaire loaded up on over 807,000 shares of the ecommerce company which had a total worth of about $83.4 million. Amid concerns of slowing growth in the Cloud business, Amazon.com, Inc. is doubling down on its AWS business and recently revealed plans to invest a massive $12.7 billion in cloud infrastructure in India.
Arch Capital made the following comment about Amazon.com, Inc. in its Q1 2023 investor letter:
“Replacing our Wix investment is Amazon.com, Inc. (NASDAQ:AMZN), a company we are sure you have heard of before. We believe the company’s long-term growth runway, profit potential, and competitive advantages were being vastly underrated in early January when its market cap was well below $1 trillion. We think early January was one of those rare times you could buy a special business like Amazon at a discounted valuation. Our hope is that – if we are right about its competitive advantages in retail and cloud computing – our Amazon stake will end up being a permanent holding in the limited partnership.”
9. Alphabet Inc. (NASDAQ:GOOGL)
Hedge Fund Stake Value: $91 million
Billionaire Stanley Druckenmiller opened a new position worth over $91 million in Alphabet Inc. (NASDAQ:GOOGL) during the first quarter of 2023. Over the past one month Alphabet Inc. has gained about 18% as investors start believing in the company’s leverage in the AI space, thanks to spectacular capabilities of its generative AI service called Bard. Alphabet Inc. also got a push after latest reports revealed that Samsung suspended internal discussion about a potential shift to Bing search engine for its smartphones.
As of the end of the fourth quarter of 2022, 209 hedge funds tracked by Insider Monkey had stakes in Alphabet Inc.. This makes Alphabet Inc. the third most popular stock among the 943 hedge funds in Insider Monkey’s database.
Diamond Hill Large Cap Strategy made the following comment about Alphabet Inc. in its Q1 2023 investor letter:
“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet Inc. (NASDAQ:GOOG), Microsoft and Booking Holdings, all of which posted double-digit gains. Shares of media and technology giant Alphabet outperformed as the company announced expense discipline while continuing to invest in its core products of Google Search, YouTube and Google Cloud.”
8. IQVIA Holdings, Inc. (NYSE:IQV)
Hedge Fund Stake Value: $94.4 million
North Carolina-based IQVIA Holdings, Inc. (NYSE:IQV) sells technologies solutions for the life sciences industry. Billionaire Stanley Druckenmiller acquired 474,500 shares of IQVIA Holdings, Inc. during the first quarter of 2023, ending the period with a $94.4 million stake in the company. In April IQVIA Holdings, Inc. posted its first quarter results. Adjusted EPS in the quarter came in at $2.45, beating estimates by $0.04. Revenue in the quarter jumped 2.2% year over year to $3.65 billion, surpassing estimates by $40 million.
As of the end of the last quarter of 2022, 60 hedge funds had stakes in IQVIA Holdings, Inc., according to Insider Monkey’s database of hedge funds.
7. KBR, Inc. (NYSE:KBR)
Hedge Fund Stake Value: $99.1 million
Texas-based KBR, Inc. (NYSE:KBR) sells engineering, technology, scientific and defense solutions. Billionaire Druckenmiller increased his stake in the company by 6% in the first quarter, boosting his stake in KBR, Inc. to $99.1 million.
Insider Monkey’s database of 943 hedge funds shows that 40 hedge funds had stakes in KBR, Inc. as of the end of the fourth quarter of 2022. The biggest stakeholder of KBR, Inc. Lauren Taylor Wolfe’s Impactive Capital which had a $230 million stake in the company.
KBR, Inc. is also a dividend-paying stock, with a yield of about 0.92%.
Earlier in May, KBR, Inc. announced first quarter results. Adjusted EPS in the quarter came in at $0.67 beating estimates by $0.09. Revenue fell 0.6% year over year to $1.7 billion, surpassing estimates by $90 million.
6. Teck Resources Ltd (NYSE:TECK)
Hedge Fund Stake Value: $118.1 million
Teck Resources Ltd (NYSE:TECK) shares have gained about 15% year to date in 2023 as of May 23. Billionaire Stanley Druckenmiller increased his holding in Teck Resources Ltd by 81% in the first quarter. Duquesne now owns a $118 million stake in Teck Resources Ltd.
Teck Resources Ltd is currently in the news after Switzerland-based commodities company Glencore said that it’s willing to sweeten its offer to buy Teck. In March Glencore offered to buy Teck Resources Ltd for $22.5 billion.
Insider Monkey’s database of 943 hedge funds shows that 62 hedge funds had stakes in Teck Resources Ltd as of the end of the fourth quarter of 2022, up from 47 hedge funds in the previous quarter.
In addition to Amazon.com, Inc., Alphabet Inc. and NVIDIA Corporation, TECK is a notable stock in Druckenmiller’s portfolio.
5. Lamb Weston Holdings, Inc. (NYSE:LW)
Hedge Fund Stake Value: $206.8 million
Idaho-based food processing company Lamb Weston Holdings, Inc. (NYSE:LW) ranks 5th in our list of the top stock picks of billionaire Stanley Druckenmiller. Lamb Weston Holdings, Inc. shares have gained about 74% over the past one year. Stanley Druckenmiller’s hedge fund has a $207 million stake in Lamb Weston Holdings, Inc. as of the end of March.
In April, Lamb Weston Holdings, Inc. posted fiscal Q3 results. Adjusted EPS in the period came in at $1.43, beating estimates by $0.44. Revenue in the period jumped about 31% year over year to $1.25 billion, beating estimates by $90 million. For fiscal 2023, Lamb Weston Holdings, Inc. said it expects net sales to come in between $5.25 billion to $5.35 billion, up from the previous guidance of $4.8 billion to $4.9 billion. The consensus estimate for this figure was $5.15 billion.
As of the end of the fourth quarter of 2022, 51 hedge funds had stakes in Lamb Weston Holdings, Inc., up from 42 hedge funds in the previous quarter, according to Insider Monkey’s database. This shows that Lamb Weston Holdings, Inc. saw an increase in hedge fund sentiment in the last quarter of 2022.
4. Eli Lilly and Company (NYSE:LLY)
Hedge Fund Stake Value: $208.2 million
Billionaire Druckenmiller cut his stake in Eli Lilly and Company (NYSE:LLY) by 17% in the first quarter of 2023. Eli Lilly and Company is still his hedge fund’s fourth biggest holding. Duquesne owns a $208.2 million stake in Eli Lilly and Company. Eli Lilly and Company shares have gained about 43% over the past one year. Recently, The New England Journal of Medicine published results for a phase 2 trial of Eli Lilly and Company’s rheumatoid arthritis drug peresolimab. The drug met its main goal of efficacy.
As of the end of the last quarter of 2022, 76 hedge funds had stakes in Eli Lilly and Company, according to Insider Monkey’s database of 943 hedge funds. The biggest stakeholder of Eli Lilly and Company was GQG Partners of billionaire Rajiv Jain which owned a $603 million stake in the company.
Alger Spectra Fund made the following comment about Eli Lilly and Company in its Q1 2023 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with core franchises in diabetes, obesity, neurology, and oncology. The company offered exposure to therapeutics in obesity and diabetes via the launch of Mounjaro, as well as in Alzheimer’s via Donanemab which was filed in November 2022 for accelerated Phase 3 approval in mid-2023. While the company reported decent fiscal fourth quarter results, shares detracted from performance after a modest miss in their obesity and diabetes drug. Mounjaro. Moreover, investors became skeptical of potential regulatory scrutiny around Donanemab and its efficacy relative to Biogen’s competing offering.”
3. Microsoft Corporation (NASDAQ:MSFT)
Hedge Fund Stake Value: $210.2 million
It seems Druckenmiller was highly impressed by Microsoft Corporation (NASDAQ:MSFT)’s performance earlier this year amid the company’s partnerships with OpenAI, its plans for Bing search engine and more. Billionaire Stanley Druckenmiller opened a new position in Microsoft Corporation worth $210.2 million in Q1. MSFT shares have gained about 34% year to date.
Insider Monkey’s database of 943 hedge funds shows that Microsoft Corporation is the most favorite stock pick of elite hedge funds. 259 hedge funds tracked by Insider Monkey had stakes in Microsoft Corporation as of the end of the fourth quarter of last year.
Alger Spectra Fund made the following comment about Microsoft Corporation in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
2. NVIDIA Corporation (NASDAQ:NVDA)
Hedge Fund Stake Value: $219.8 million
Billionaire Stanley Druckenmiller upped his stake in NVIDIA Corporation by 35% in the first quarter of 2023. His hedge fund now owns a $220 million stake in NVIDIA Corporation. NVIDIA Corporation has been in the spotlight this year as analysts believe the company would be one of the biggest winners in the AI boom. AI applications and chatbots like ChatGPT need massive processing power to answer and process queries. This is where NVIDIA Corporation comes in. Earlier this year, UBS analyst Timothy Arcuri said that ChatGPT used 10,000 Nvidia GPUs to train its model. Microsoft Corporation’s huge investments in OpenAI also went to NVIDIA Corporation for the purchase of enterprise-grade GPUs like the A100 and H100.
Alger Spectra Fund made the following comment about NVIDIA Corporation in its Q1 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put. Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. As such, we believe Nvidia is a long-term high unit volume growth opportunity. During the period, NVIDIA reported fiscal fourth-quarter results that met expectations, as the company navigated. through an inventory correction associated with the broad macroeconomic slowdown. Moreover, management gave fiscal year earnings guidance that was better than analyst estimates. noting strong year-over-year growth in gaming and data centers. Management’s constructive assessment of 2023 prospects. coupled with the rapid rollout and adoption of generative Al offerings, led to positive share price performance.”
1. Coupang, Inc.(NYSE:CPNG)
Hedge Fund Stake Value: $302.4 million
South Korean e-commerce company Coupang, Inc.(NYSE:CPNG) tops the list of the top stock picks of billionaire Stanley Druckenmiller. The billionaire owns a $302.4 million stake in Coupang, Inc. as of the end of the first quarter, unchanged when compared to the previous quarter.
Coupang, Inc. shares have gained 16% over the past one year.
Earlier in May, Coupang, Inc. posted its first quarter results. GAAP EPS in the period came in at $0.05, in-line with estimates. Revenue in the period jumped 13.3% year over year to $5.8 billion, beating estimates by $160 million.
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This article is originally published at Insider Monkey.
