Stanley Druckenmiller Invested Tens of Millions Into These Risky Stocks. Should You?

In the first quarter of 2026, Stanley Druckenmiller's Duquesne Family Office expanded its stake in YPF (NYSE: YPF), Argentina's state-controlled oil company, more than fivefold to 3,235,962 shares, and at the same time, it bought back into the Global X MSCI Argentina ETF (NYSEMKT: ARGT), an exchange-traded fund (ETF) holding the shares of the largest and most successful public Argentine companies. Then, just a few months later, he trimmed his holdings of both.

As of June 30, Duquesne reported that it held $142.7 million of YPF, $30 million of the fund, and, in a fresh bet on assets in the country, a new $3 million position in Grupo Financiero Galicia (NASDAQ: GGAL), an Argentine bank holding company; the fund also holds $8.6 million in another Argentine energy company. In total, Argentine shares held in the portfolio were worth $184.3 million, 3.5% of Duquesne's reported portfolio value. So what opportunity is Stanley Druckenmiller seeing in Argentina, and is it worth following him into these positions, given how risky stand-alone and frontier market stocks almost always are?

Stanley Druckenmiller. Image source: Getty Images.

Oil profits are only part of the story here

Druckenmiller's investment in YPF was just in time to see a major windfall.

The company reported earnings of $1.21 billion in the second quarter, up massively from $58 million a year earlier. The growth stems from the shale formation called Vaca Muerta in Patagonia, where its oil output reached 212,700 barrels per day in that quarter, up 47% from a year earlier.

Moving those barrels to buyers has been the main constraint to selling even larger volumes, which could ease soon. The Vaca Muerta Sur export pipeline was 80% built as of July, with the first oil flows due to occur in early 2027. If that pipeline opens up, it'll mean that YPF can sell a larger share of its output at international prices to buyers abroad, garnering what could well be another large windfall if oil prices continue to rise due to the war affecting the Strait of Hormuz.

Druckenmiller's new stake in Galicia is on less certain ground.

Its profit rose by 12% in Q2, but its nonperforming loan ratio, which refers to the share of loans not being repaid on time, reached 10.6%, up from 5.5% a year earlier. Buying it means that Druckenmiller is effectively betting that the bank's Argentine borrowers will start paying their loans again as the country's inflation cools further relative to its prior highs above 100% per year.

But that cooling has stalled. Annual inflation was 33.8% in July 2026, and monthly inflation reaccelerated to 2.1% that month from 1.9% in June, the first monthly increase in months, according to the country's National Institute of Statistics and Censuses. Part of that stall traces to the March energy shock from the Iran war, the same disruption feeding the oil prices that YPF stands to benefit from.

Should you make the same bet on Argentina?

All of these positions of Druckenmiller's seem to converge around one view in particular, specifically that the libertarian Argentine President Javier Milei's deregulation and fiscal austerity program will continue to be implemented. Milei's coalition took 40.8% of the vote in the October 2025 midterms and 64 of the 127 contested seats in the lower congressional house.

Elections are obviously an important factor in any country. But for Argentina, the government in power can be the difference between rising share prices, as Druckenmiller has largely enjoyed, and investors getting their capital expropriated. For example, Argentina expropriated 51% of YPF in 2012.

Milei's attempt at assuaging investors' concerns with YPF specifically is a new policy which gives approved energy projects as much as 30 years of tax and currency stability. That program getting overturned by a different government is still a large risk of buying the stock. Knowing this, Druckenmiller's record of purchases and sales has been timed around elections.

The Argentina ETF holdings showcase the investment approach the most plainly. Druckenmiller exited YPF and the ETF in the third quarter of 2025 after Milei's governing coalition lost a Buenos Aires provincial vote. Then, he rebuilt both positions once the midterms went Milei's way. The next elections will likely see the same tweaks or perhaps bigger changes to his positioning.

For investors who don't have much knowledge of Argentina's political economy, it's best to avoid these international stocks regardless of whether the underlying businesses are strong or likely to grow. The upside of an investment in them could be large -- and temporary, especially if a different party gains power.

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.