These shares might seem expensive, but for a well-known investor who sank the Pound in ’92 together with Soros, they constitute over 22% of the portfolio.
2 technology stocks could offer growth potential of 40% per year through 2030, presenting a unique opportunity for investors looking to enter the artificial intelligence sector. Stanley Druckenmiller, one of the world’s most respected billionaire investors, has a proven track record of recognizing emerging trends. He led the legendary Duquesne Capital fund for more than three decades, generating an average annual return of 30%, and continues to manage $3.1 billion through his Duquesne Family Office. But he is probably best remembered for his role in George Soros’s famous bet against the British sterling in 1992.
- Generative AI projected growth
- Source: whatech.com
Investors are closely monitoring his picks, including positions in the “Magnificent 7” technology stocks, a group of companies that are redefining the tech sector. Two of these companies, Microsoft and Nvidia, have become major holdings in Druckenmiller’s portfolio, with prospects that could result in notable growth in the coming years.
Find out why Druckenmiller bet on these two companies and how their growth potential of 40% per year could influence the future of the technology sector.
1. Microsoft
Microsoft is the largest position in Druckenmiller’s portfolio, taking up 13.1% of his overall investment. The choice to focus on Microsoft is linked to the expansion of the artificial intelligence sector. Since Satya Nadella took over as CEO in 2014, Microsoft has transformed many of its desktop products into cloud services, expanding Azure to become the world’s second-largest cloud computing platform. Microsoft has also integrated OpenAI technologies, such as ChatGPT and DALL-E, into its cloud services, Bing search engine, and productivity applications.
- Big tech AI investments
- Source: Reuters
This strategy has allowed Microsoft to grow faster than Amazon Web Services (AWS), the market leader, and challenge Google’s dominance in search engines. These factors explain why Druckenmiller reduced his holdings in Alphabet and Amazon, instead focusing his interest on Microsoft. Analysts predict that in 2024 Microsoft’s revenue will grow by 8%, while earnings per share will increase by 11%. For 2025, a 14% increase in revenue and a 15% increase in earnings per share are expected. Even though the stock looks expensive with a P/E ratio of 31, it remains a solid choice for investing in the AI market.
2. Nvidia
Nvidia is another top investment for Druckenmiller and represents 9.8% of his portfolio. Nvidia’s appeal lies in its dominance as a manufacturer of high-performance graphics processing units (GPUs), essential for complex AI tasks. In 2024, Nvidia generated 78% of its revenue from data centers, up 126% from the previous year. This data helped grow earnings per share by 288%.
Nvidia could face competition from cheaper GPU makers like AMD and from first-party chips developed by cloud giants like Microsoft. However, demand for Nvidia’s GPUs exceeds supply, confirming its leading position in the AI market. Druckenmiller reduced his position in Nvidia in the second half of 2023, but also purchased call options on the stock, indicating an expectation of continued growth.
- Nvidia GPU sales
- Source: SeekingAlpha
Analysts expect Nvidia’s revenue to grow 82% in 2025, with an 89% increase in earnings per share (EPS). With a P/E ratio of 34, Nvidia might look expensive, but its position in the AI market makes it a solid option for long-term investors.
|DISCLAIMER
The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.|
Original article published on Money.it Italy 2024-05-05 13:52:00. Original title: 2 azioni tech con un potenziale di crescita del 40% ogni anno (fino al 2030)
