Billionaire Stanley Druckenmiller Is Betting Big on These 2 Stocks
Key Points
One investment is a fast-growing genetic testing company that's now generating cash flow and has a scalable business model.
The leading semiconductor foundry's sales are booming on AI-led demand, but expanding cash-flow margins will be a challenge.
Billionaire Stanley Druckenmiller is the investing legend who first made his name managing money for George Soros. He closed the highly successful Duquesne Capital Management in 2010 (after never having a losing year in 30) and now manages the Duquesne Family Office. The good news is you can track his holdings through publicly available filings.
On that note, here are two of his top-five, high-conviction holdings for investors to consider buying.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Natera
Representing 13.2% of the Duquesne Family Office holdings, Natera (NASDAQ: NTRA), a $28.8 billion market cap genetic testing company, specializes in women's health, oncology, and organ health testing. It's currently loss-making, but Natera's bulls can point to revenue set to grow at a high-teens percentage rate over the next couple of years (based on the Wall Street consensus), and a high and expanding gross profit margin -- 64.9% in the third quarter of 2025 compared to 61.8% in the same quarter of 2024.
Moreover, with test growth of 15% converting into 35% revenue growth, the company clearly has good pricing power. Its oncology tests grew 54% in the third quarter to 24% of its total tests, and the bullish case for the stock rests on its Signatera personalized blood test to detect molecular residual disease (MRD) in cancer patients.
Natera may be loss-making, but it's cash-generative, has recurring revenue (cancer survivors routinely test again), and has a scalable business model. Wall Street has free cash flow (FCF) growing from $103 million in 2025 to $282 million in 2027, and the stock is interesting for speculative growth-oriented investors.
Taiwan Semiconductor Manufacturing
The second stock represents 5.4% of the portfolio and is up 80% over the last year, as investors have bought into Taiwan Semiconductor Manufacturing's (NYSE: TSM) exposure to the artificial intelligence (AI) spending boom. All the indications are that the AI boom is continuing, as companies like Alphabet and Amazon continue to invest staggering sums in AI.
However, there are a couple of concerning signs for Taiwan Semiconductor. First, as CEO C.C. Wei noted on the recent earnings call, its AI-related demand was robust in 2025, while non-AI markets reported only a "mild recovery." It's clear that the company's prospects and valuation depend on AI spending.
That's fair enough, but he also noted that the company's capital spending "amounted to a total of $101 billion, but is expected to be significantly higher in the next three years" due to rising cost challenges and the need to support growth.
Again, there's nothing wrong with investing for growth; in fact, it's exactly what investors should want the company to do. However, it does imply that FCF margin expansion opportunities will be limited in the coming years, and he acknowledged the company was carrying a "greater burden of capex investment for our customers."
These increased risks, along with the lack of a medium-term opportunity to expand cash-flow margins, need to be priced into the stock when considering it for your own portfolio.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.