Why Stanley Druckenmiller Dumped AI Darling Palantir 

Stanley Druckenmiller who famously helped George Soros break the Bank of England in 1992 has just ditched one of Wall Street’s most hyped artificial intelligence (AI) stocks.

So, what did he sell? Palantir Technologies (NYSE: PLTR). While most investors were busy chasing the AI boom, Druckenmiller was building a large position in a drugmaker.

Let’s unpack what’s going on behind the scenes and why this underdog pharma pick may still have a long runway ahead.

Key Points

• Druckenmiller dumped Palantir over bubble concerns, despite strong AI and government contracts.

• He went big on Teva, buying almost 15M shares as the drugmaker cut debt and costs post-opioid settlement.

• It’s a classic Druckenmiller pivot from overhyped growth to undervalued turnaround.

Why Druckenmiller Cut Ties with Palantir

Not long ago, Palantir was the crown jewel of Druckenmiller’s AI holdings. He initiated his position in early 2023 with gusto, adding over three quarters of a million shares and was drawn to Palantir’s government contracts, sticky software, and soaring revenue growth.

Palantir’s secret sauce lies in its two proprietary platforms. Gotham, used for military and intelligence applications, and Foundry, built for commercial enterprise. These platforms offer powerful AI-driven data integration tools that have proven difficult to replicate, so much so that the U.S. Army signed a multiyear contract worth hundreds of millions.

But by Q1 2025, Druckenmiller was done. His fund sold every last share. Why the sudden reversal?

There are a few likely reasons. Druckenmiller is a trader at heart. While some investors hold for decades, his fund’s median holding period is just nine months. Palantir’s stock had already soared since he first bought in.

Druckenmiller has publicly warned that the AI boom could face a classic bubble burst, just like dot-coms in 2000 or solar stocks in 2008. Even though he believes in the long-term potential, he’s wary of short-term froth. Palantir’s nosebleed valuation may have been too much to stomach.

A Fallen Giant Staging a Comeback

He’s bought almost 15 million shares in less than a year, a clear conviction play.

Here’s what likely convinced him. Teva reached a $4.25 billion nationwide settlement over its role in the opioid crisis a couple of years ago. Crucially, it’s spread over 13 years, keeping annual payments manageable.

Teva has sold non-core assets, cut billions in costs, and reduced net debt from over $35 billion to under $15 billion.

Despite more than doubling in two years, Teva’s stock trades at just 6.5x forward earnings, a fraction of the valuation peers like Eli Lilly or Novo Nordisk enjoy. It’s priced like a declining generics company, not a rejuvenated pipeline-driven pharma business.

The Bottom Line

Stanley Druckenmiller walked away from a market darling trading at over 100x sales and went all-in on a company many investors had written off. Teva, long buried under litigation, debt, and bad headlines, is now leaner, smarter, and growing again.

And if history is any guide, betting with Druckenmiller when he makes a bold pivot has often paid off.