Billionaire Stanley Druckenmiller Just Dumped Alphabet (Google) and Picked Up 2 Stocks That Are Direct Bets on Agentic AI

There aren't too many investors better than Stanley Druckenmiller. The now-billionaire launched his own fund, Duquesne Capital, in 1981 and proceeded to absolutely crush the market over the next three decades, generating incredible average annual returns of over 30%, without a single year in the red. He shuttered the fund in 2010, and today, he focuses on managing his family's wealth out of the Duquesne Family Office.

Given that he had such a storied career, retail investors are always interested to see what Druckenmiller is buying and selling in any given quarter. In the first quarter of 2026, he made a lot of moves. Among them, he completely closed his position in Alphabet (a stake worth just over $120 million as of the end of 2025) and opened new positions in two stocks that are direct bets on agentic artificial intelligence (AI).

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Exiting Alphabet after a spectacular run

Druckenmiller took his gains on Alphabet, the parent company of Google, after what's been a spectacular run.

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If I had to guess, Druckenmiller is likely taking gains due to Alphabet's valuation, which has gone from under 15 times forward earnings in early 2025 to about 27 times now. Alphabet was viewed as the value play in the "Magnificent Seven" last year, but the company overcame virtually every obstacle thrown its way.

The U.S. Department of Justice sued it, accusing the tech giant of using anticompetitive practices in its digital advertising and search businesses, and a federal judge ultimately agreed. However, the judge stopped short of granting Justice's request for a punishment that involved compelling Alphabet to divest itself of its popular Chrome web browser.

Meanwhile, Alphabet demonstrated that its Gemini large language models (LLMs) could compete with the best rival models on the market, giving investors confidence in the company's ability to maintain its dominant market share in traditional digital search.

While there are still some longer-term concerns about how AI will impact traditional search, the company has many strong and fast-growing businesses, including its cloud infrastructure segment, which will benefit from the world's adoption of AI; YouTube, one of the strongest video content platforms; Waymo, its autonomous driving business; and its own custom AI semiconductor business.

So while I understand Druckenmiller and other large funds taking gains here, I still think retail investors can comfortably hold Alphabet stock long term.

Betting on agentic AI

During the first quarter, Druckenmiller and his team initiated new positions in two stocks that are a direct bet on agentic AI. Duquesne bought over 411,000 shares of Intel (NASDAQ: INTC) and 106,700 shares of Arm Holdings (NASDAQ: ARM). As of the end of the quarter, those stakes were worth about $18 million and $16 million, respectively.

Both stocks are bets on agentic AI because Intel and Arm are two of the leaders in the central processing unit (CPU) space.

CPUs are far from new technology; they are the core chips that provide processing power in electronic devices most of us have been using for decades, such as laptops and cellphones. When the AI story first began to gain steam, it was graphics processing units (GPUs) that attracted the lion's share of the attention because those specialized parallel processors turn out to be perfectly suited to handling the type of computational heavy lifting necessary for the training of the LLMs.

However, with the emergence of agentic AI -- AI-powered technology performing complex tasks autonomously based on a simple set of initial instructions -- CPUs are officially back in style. Those chips are well designed to help AI agents with task orchestration, communication with external sources, and memory management and data processing.

"On the inference side, in terms of orchestration, control plane, and also managing all the different agents with data, CPU is much more efficient," Intel CEO Lip-Bu Tan said on the company's first-quarter earnings report. "The ratio of CPU to GPUs [in data centers] used to be 1-to-8, and now it is 1-to-4, and I think it could move toward parity or even better. So I think that demand is very strong."

Intel is an interesting play because the company not only sells CPUs specifically for data centers but also has its own foundry for manufacturing and packaging CPUs and GPUs.

Arm Holdings offers investors a different way to gain CPU exposure. Arm primarily licenses intellectual property used in the design of various types of CPUs to companies. Some of its larger customers include Nvidia, Apple, Microsoft, OpenAI, and Alphabet.

Recently, however, Arm has decided to design and sell its own CPUs for the first time, likely due to strong demand. Management thinks it could ramp this business up to a $15 billion annual revenue stream over the next five years.

INTC PE Ratio (Forward) data by YCharts.

Obviously, if the adoption and deployment of agentic AI continue to advance, both Arm and Intel should do well. However, investors considering buying them should understand that these stocks aren't exactly cheap right now.

So, investors should size their positions accordingly, or start with small purchases and dollar-cost average their way into larger stakes over time.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Intel, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.