This Hedge Fund Just Sold Sandisk and Bought Taiwan Semiconductor Manufacturing Stock. Does Wall Street Agree With the Move?

Following hedge fund moves is possible by examining a firm's 13-F filings with the Securities and Exchange Commission, disclosing their end-of-quarter holdings. Because investors only get updates once per quarter, the key is to find a fund that's not trading in and out of stocks on a daily basis. One that I follow that has a more long-term investing mindset is the Duquesne Family Office, run by Stanley Druckenmiller. It made several interesting moves in the second quarter, including selling Sandisk (NASDAQ: SNDK) and buying Taiwan Semiconductor Manufacturing (NYSE: TSM). Although we don't know exactly when these moves happened, they are interesting because Sandisk is the top-performing stock in the S&P 500 (SNPINDEX: ^GSPC) this year.

So, was this a smart move by Druckenmiller? Let's take a look.

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Sandisk has declined a lot since Q2 ended

To start 2026, Sandisk rose to its peak right before June ended, increasing nearly 900%. After the calendar flipped to July, the stock sold off heavily, although it's still up more than 500% this year. If Druckenmiller sold at the end of June, he's likely sitting on major gains from his sales, demonstrating why hedge funds are considered the smart money.

Taiwan Semiconductor's 2026 hasn't been nearly as impressive, but it has still risen nearly 40% for the year, which is great considering it's a multitrillion-dollar company.

But none of Druckenmiller's moves in the past matter now; what really matters is which stock is the better buy for the future -- and Wall Street has something to say about that.

Wall Street prefers Sandisk stock, barely

Wall Street analysts offer one-year price targets on stocks, which can be useful. Although an individual analyst may have a high or low price target, seeing where the analyst community is on average gives investors a good idea about where the analyst community believes a stock is heading.

Taiwan Semiconductor has an average price target of $555 per share. That implies a 33% gain during the next year, which is likely to beat the market. This backs up Druckenmiller's move of buying Taiwan Semiconductor stock in the quarter, but what do analysts think about Sandisk?

Analysts currently have a $2,126 price tag on Sandisk's stock, indicating about 41% upside. That's slightly better than what they expect from Taiwan Semiconductor, making it seem like Wall Street is far more bullish on Sandisk's stock.

This would also suggest that Druckenmiller's sale was a mistake, but it all depends on when he sold the stock. If he sold it at its peak, at more than $2,300 per share, that would have been above the price target, indicating that Druckenmiller made the right move. After the sell-off, it may be time to reverse his moves.

But what should you do? I think both stocks are viable in today's market, and with huge demand for the artificial intelligence (AI) chips that these two produce, I think they will both make for fantastic investments during the next year. However, because Sandisk is involved in the memory chip market (which is more cyclical than TSMC's logic chip products), the risk is definitely higher with Sandisk than for Taiwan Semiconductor.

As a result, because TSMC is less risky and has similar one-year upside projections, I think it's the better buy of the two, and Druckenmiller was right to sell Sandisk and buy more Taiwan Semiconductor. We'll see how these two pan out during the next year, but with major spending from the AI hyperscalers expected to last through the end of the decade, there is still plenty of room for upside.

Keithen Drury has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.