Stanley Druckenmiller's Duquesne Family Office opened a new $120 million stake in Alphabet during the second quarter, months after exiting the stock entirely. The move comes as Alphabet's cloud backlog and operating income surge, even as, according to TheStreet, Druckenmiller recalled last summer that the AI trade had grown "disturbingly heated."
Duquesne rebuilds its Alphabet stake
Duquesne bought 336,300 Class A shares of Alphabet worth roughly $120 million at quarter-end, an SEC filing shows. The fund held zero Alphabet shares at the end of the first quarter after selling its entire 385,000-share position.
That reversal fits Druckenmiller's style. He has often said he typically holds trades for 18 months to three years but exits or reverses quickly once the underlying facts change, and he weighs where a business is heading rather than what is already known.
Alphabet's cloud numbers back the bet
Alphabet's second-quarter results give that forward-looking case some support. Revenue climbed 24% to $119.8 billion, while operating income rose 30% to $40.8 billion. Google Cloud sales jumped 82% to $24.8 billion, and cloud operating income more than tripled to $8.8 billion.
The demand pipeline also grew. Google Cloud's backlog rose to $513.9 billion at quarter-end, up from $462.3 billion in March, with Alphabet expecting to recognize just over half of it within 24 months. Warren Buffett's Berkshire Hathaway also holds Alphabet and raised its stake by 83% in the second quarter to 106 million shares.
Alphabet shares have also pulled back from a May record above $400 to about $346, a level that, according to Yahoo Finance, offers a more attractive entry point.
Other Q2 moves across AI and chips
Alphabet was not Duquesne's biggest change. The fund more than tenfolded its Amazon stake to 541,600 shares worth $129.1 million. AWS operating income reached $16.6 billion on 37% cloud sales growth in the same quarter.
Duquesne also added to Taiwan Semiconductor, lifting the stake 19% to 589,680 shares worth $281.6 million, after the chipmaker's quarterly profit jumped 77%. It also increased its STMicroelectronics holding to 3.10 million shares worth $232.4 million.
A track record built on macro bets
Druckenmiller ran Duquesne Capital from 1981 through 2010, posting nearly 30% annualized returns without a losing year, and now manages his own money through Duquesne Family Office. He built part of that record helping drive a trade against the British pound ahead of the 1992 sterling crisis that generated more than $1 billion while running money for George Soros.
Source: TheStreet
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