27.5% of Stanley Druckenmiller's $3.7 Billion Portfolio Is Invested in These 3 Under-the-Radar AI Stocks

Bram Berkowitz, The Motley Fool

Mon, Apr 7, 2025, 4:00 AM 5 min read

Stanley Druckenmiller is in an elite league of investors that includes the likes of Warren Buffett. He ran his hedge fund firm, Duquesne Capital Management, for 30 years, posting eye-popping average annual returns of 30%. While Druckenmiller closed the firm in 2010, the George Soros protégé is still investing through his family office, the Duquesne Family Office, making him a great model for investors to follow. Roughly 27.5% of Druckenmiller's portfolio is invested in three under-the-radar artificial intelligence (AI) stocks.

Druckenmiller's largest position at the end of the fourth quarter was in the molecular biotech company Natera (NASDAQ: NTRA). Duquesne's position at the end of the fourth quarter amounted to over $564 million.

Natera combines cell-free DNA technology with statistical algorithms powered by machine learning to identify diseases and conditions . The company's goal is to provide a personalized form of genetic testing that can inform people of conditions and diseases earlier in their life cycles. Currently, the company focuses on women's health, oncology, and organ health. In women's health, Natera created minimally invasive tests to identify genetic conditions like Down syndrome. In oncology, the company developed a personalized blood DNA test, and in organ health the company makes tests to evaluate for kidney, heart, and lung transplant rejection, as well as tests for chronic kidney disease.

In recent quarters, Natera's execution really started to pay off. Revenue of $476 million in the fourth quarter jumped 53% year over year, as processed tests climbed sharply. After turning cash-flow-positive in the first quarter of 2024, Natera generated $46 million of free cash flow in the fourth quarter. The company also trimmed its losses in 2024 from $3.78 per share to $1.53.

While the stock is not cheap trading at nearly a $19.5 billion market cap, the company is scaling its current offerings, has lots of expansion opportunities, and boasts a clean balance sheet with nearly $1 billion of cash with very little debt, so the company looks well positioned.

Coherent (NYSE: COHR) designs optoelectronic components, devices, and laser systems for companies in the industrial, communications, and electronics industries. So how does this fit into AI? Well, the company's ultra-quick optical transceivers and optical components have powerful bandwidth that plays a critical role in powering data centers and AI applications. In fact, the AI chip king Nvidia buys Coherent's transceivers.