Palantir Billionaire Peter Thiel Sells Nvidia and Tesla Shares, Then Buys an AI Stock That's Up Nearly 460,000% Since Its IPO
Key Points
Hedge fund Thiel Macro no longer has a stake in Nvidia.
Tesla remains Thiel Macro's largest position, even after it sold a majority of its shares in Q3.
Microsoft is a lower-risk investment with plenty of upside potential.
- 10 stocks we like better than Microsoft ›
Peter Thiel became wealthy by co-founding PayPal, but he's now best known as the co-founder of Palantir, one of the hottest stocks on the market over the past year or so. Like many other billionaire investors, Thiel's portfolio moves (via his current hedge fund, Thiel Macro) attract plenty of eyeballs, as people look to him for insights about where the market may be heading.
During the third quarter, Thiel Macro made three noteworthy moves:
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- Selling its entire stake in Nvidia (NASDAQ: NVDA).
- Selling 76% of its Tesla (NASDAQ: TSLA) stake.
- Opening a position in Microsoft (NASDAQ: MSFT).
In other words, he walked away from some of the hottest names in artificial intelligence (AI) and moved into one of tech's long-term staples.
Image source: Getty Images.
Why would Thiel Macro sell Nvidia and Tesla?
Nvidia decisively reclaimed the title of world's most valuable company in 2025 as demand for its GPUs and other networking hardware took off amid the current AI boom. Just as AI was scaling, Nvidia had a virtual monopoly on the parallel processors that AI workloads require.
Thiel Macro first began purchasing Nvidia shares in late 2024, so it made a decent amount of money from that investment. Maybe the sale reflected his desire to lock in those profits while the company was trading at a high valuation -- with a price-to-earnings (P/E) ratio of around 46.4.
Though it trimmed its Tesla stake substantially, the electric vehicle maker is still the hedge fund's largest holding. Tesla's long-term outlook from here will rest largely on its ability to make its robotaxi ambitions happen, but it appears we're well over a decade from that business becoming anywhere close to viable.
Meanwhile, based on its underwhelming vehicle sales and its P/E ratio of around 295, Thiel likely figured his money was better put to work somewhere else.
Why it makes sense to invest in Microsoft right now
Microsoft is arguably the most well-diversified tech company in the world, and one of the best-performing companies in the stock market's history.
Thanks to the wide reach of its enterprise software, Microsoft doesn't have to rely on AI's "potential." Instead, it has direct (and effective) means to monetize AI developments as they happen. It has added its generative AI tool, Microsoft Copilot, to its suite of products, and is charging for subscriptions.
By strengthening its offerings, Microsoft is tightening its grip on the enterprise software industry and making it even harder for users to switch away from its products and services. It's seemingly a much safer bet for investors than Nvidia and Tesla currently are.
Should you buy stock in Microsoft right now?
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Stefon Walters has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft, Nvidia, Palantir Technologies, PayPal, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy.
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