Billionaire Stanley Druckenmiller sold shares of Palantir and Tesla in favor of another Artificial Intelligence stock with a market opportunity of $50 billion.

Key points

• The 13F forms ( submitted quarterly ) allow investors to analyze which stocks are being bought and sold by the brightest money managers on Wall Street.

• The billionaire head of Duquesne was a large seller of Palantir and Tesla shares during the quarter ending in March, and this sale could be due to something more than just taking profits.

• Meanwhile, Druckenmiller's fund opened a position of nearly 1.1 million shares in a cloud-based software provider that is heavily betting on artificial intelligence.

Over the past three years, no trend has captivated the attention and capital of investors as much as artificial intelligence. Equipping software and systems with the ability to make instant decisions without human supervision is revolutionizing nearly every global industry. This is why PwC analysts forecast that AI will boost global GDP by $15.7 trillion by 2030.

While most Wall Street analysts maintain ambitious expectations for the AI revolution, billionaire managers have shown more moderate optimism.

For example, billionaire investor Stanley Druckenmiller of Duquesne Family Office actively sold several well-known AI stocks during the quarter ending in March. We know this because institutional investors with at least $100 million in assets under management are required to file Form 13F within 45 days after the end of a quarter.

While Druckenmiller was sending the shares of data mining specialist Palantir Technologies and the American leader in electric vehicles Tesla to the slaughter, he was also investing in an AI-driven business with an estimated potential market of $50 billion.

Popular AI stocks are dismissed by billionaire Stanley Druckenmiller

Between December 31, 2024, and March 31, 2025, the billionaire head of Duquesne was very busy. The total number of securities overseen by Druckenmiller fell from 78 to 52 in just three months. Among the notable stocks that were reduced or eliminated are Tesla, which was reduced by 50% (18.837 shares sold), and Palantir, where all 41,710 shares were sold.

It is undeniable that both companies have enjoyed clearly defined competitive advantages. Palantir's Gotham platform, focused on government, has no direct replacement, while its Foundry service, aimed at enterprises, lacks large-scale competition. As for Tesla, it became the first car manufacturer in over half a century to be built from scratch to mass production.

However, these first-mover and scale advantages did not protect any of the stocks from being reduced or eliminated.

Considering that the stocks overseen by Druckenmiller have an average holding period of less than nine months, it is possible that this selling activity represents nothing more than profit-taking.

Palantir and Tesla stocks surged after Donald Trump's victory in November. Palantir is a logical winner of a unified Republican government that ( likely ) favors strong defense spending. Meanwhile, the temporary appointment of Tesla's CEO, Elon Musk, to the Department of Government Efficiency ( DOGE ) as a special employee was seen as a positive factor for Tesla.

The concerning thing is that there may be more to this story than just profit-taking. While this is mere speculation, Stanley Druckenmiller may have felt discouraged by the exorbitant valuations of Palantir and Tesla.

Tesla's electric vehicles, which widely incorporate AI, have endured more than half a dozen widespread price cuts as competition increased and inventory levels grew. This has hit Tesla's vehicle margins and reduced its earnings per share. Paying nearly 130 times next year's earnings for a company whose growth engine has stalled and whose margins are in trouble may not be appealing to the billionaire head of Duquesne.

Similarly, Palantir Technologies is valued at a price-to-sales ratio (P/S) of over 140! To provide context, companies that lead innovative trends have historically peaked with P/S ratios in the range of 30 to 40. No mega-cap company has been able to maintain such an absurd premium as Palantir. Seeing this may have persuaded Druckenmiller to pull his chips off the table completely.

The billionaire boss of Duquesne is investing in this emerging artificial intelligence stock

On the other end of the spectrum, billionaire Stanley Druckenmiller oversaw the addition of a dozen new stocks to his fund's portfolio during the quarter ending in March. None of these new stocks were purchased more prominently than the digital signature specialist DocuSign.

During the first three months of 2025, Duquesne Family Office purchased 1,074,655 shares of DocuSign, with a market value of approximately $87.5 million. In other words, it became one of the top ten positions for Druckenmiller.

DocuSign became Wall Street's favorite during the peak of the COVID-19 pandemic. With people encouraged to stay home to prevent worsening of the pandemic, DocuSign's electronic signature services became essential across numerous industries. Although life has returned to normal after the pandemic, DocuSign has managed to retain most of its market share in digital signatures. According to Datanyze, it currently holds a 71% market share.

But electronic signatures account for only about half of DocuSign's total addressable market. While the digital signature market is estimated to be worth $26 billion, DocuSign has a fast-growing and high-margin opportunity in contract lifecycle management ( CLM ) which represents another $24 billion in market opportunity.

The company's cloud-based CLM operations include the relatively new Intelligent Agreement Management platform (IAM), which leverages AI insights to analyze, adapt, and automate the entire lifecycle of agreements for businesses. DocuSign's IAM platform can also reduce errors associated with agreements and integrate with other core systems, such as customer relationship management software, to enhance efficiency.

Although competition is increasing in the field of electronic signatures, and DocuSign's annual growth rate has considerably slowed since the peak of the pandemic, the company's balance sheet and valuation may be additional attractions for Druckenmiller.

When DocuSign's first fiscal quarter ended on April 30, it had nearly $1.11 billion in cash, cash equivalents, and restricted investments on its balance sheet, with no debt. An impeccable balance sheet has allowed for a steady diet of share buybacks, which tends to have a positive impact on earnings per share over time.

In terms of valuation, DocuSign is trading at 19 times the earnings per share projected for the fiscal year 2027. Even accounting for a slower annual growth rate, this represents a 37% discount to its average price-to-earnings ratio over the past five years.