MW Stanley Druckenmiller says this is how he'd build a portfolio from scratch right now

By Barbara Kollmeyer

AI is no longer playing a starring role, says the widely followed investor

Stanley Druckenmiller, shown in July 2017 at a conference in Sun Valley, Idaho, revealed in an interview on Friday with Morgan Stanley where he's seeing opportunities right now.

Stanley Druckenmiller says artificial intelligence is no longer playing a starring role in his investments, as he focuses more on hard assets like copper and a more diversified portfolio of stocks.

The closely followed investor, who runs the Duquesne Family Office, made the comments in an interview for "Hard Lessons," a Morgan Stanley podcast that was published on Friday. He was asked by liana Bouzali, Morgan Stanley's global head of derivatives, distribution and structuring, how he would construct a hedge-fund portfolio from scratch today.

Druckenmiller said such portfolio building would take into account a strengthening U.S. economy and potential for Fed rate cuts, though, given highly valued equities, he prefers longer positions in a more "eclectic basket of stocks." The AI trade to him is not longer so big, he added.

"[O]ur portfolio," he indicated, over the past three years, had been "very much AI-driven. We still have dribs and drabs of AI around, but it's not driving the engine anymore, to some extent," said Druckenmiller. He's still excited, he said, about the opportunity for "massive disruption and massive change" in the next three or four years, which would be a plus for any hedge fund starting now.

Don't miss: The week, FOBO - 'fear of becoming obsolete' because of AI - became real for workers and markets

"Macro has been dead for 10 or 15 years," he observed. "I don't think that's the case anymore."

Druckenmiller said he's still got "big positions in Japan and Korea," with some of that in AI. The iShares MSCI Japan ETF EWJ is up 40% over a one-year span, and the iShares MSCI Korea ETF EWY up 55%, versus a gain of 15% for the S&P 500 SPX. A 13F filing released earlier this month showed Druckenmiller's family office also made a well-time bet on the iShares MSCI Brazil ETF EWZ in the final quarter of 2025.

Earlier this week: The milestones keep coming for the world's hottest stock market

Also read: U.S. stocks are falling behind. It could be the beginning of an epic shift toward global markets.

"We're bearish on the U.S. dollar, mainly because [it has been] sort of [at] the top of the historic range in terms of purchasing power, and foreigners are way, way overloaded in dollars," he added. Whether that's a sell-America trade or just buying fewer U.S. assets, he expects the currency DXY will weaken.

As for copper (HG00), up 32% over the past 52 weeks and up 6% in 2026, Druckenmiller said it's "not a genius trade" but makes sense given supply will be pretty tight over the next eight years, with extra demand from AI and data centers. He said his family office is not investing big in copper miners but keeps rolling over exposure to front-month copper, and it has gold (GC00) exposure, though, in that case, for geopolitical rather than industrial reasons.

See: Trump calls for regime change after U.S.-Israel attack on Iran. Markets should brace for more than June's brief military campaign.

Gold is up 84% over the last year, having seen a historic rally.

Druckenmiller said that, given his family office's long exposure to lots of risk assets, it's keeping a short position in bonds, which wouldn't be a big moneymaker unless he's right and the economy sees disinflationary growth.

"If I'm wrong and the strong growth creates inflation - it wouldn't be that unusual if the Fed were to cut into a booming economy for inflation to take off, particularly with what's going on with commodities. So I'm open-minded to that. But we create a matrix, and the bonds are helpful in both ways," he said.

The interview with Druckenmiller was conducted on Jan. 30, just ahead of the February ascent of an AI fear trade that pummeled software and other sectors exposed to artificial-intelligence technology. Investors have also been piling into bond markets on fears that AI advances will decimate the job market, while hotter-than-expected producer prices have clouded hopes for Federal Reserve interest-rate cuts.

U.S. stocks plunged on Friday after the PPI data pointed to worryingly persistent inflation.

Don't miss: Any chance of a Fed interest-rate cut in 2026 is 'evaporating before our very eyes' with Iran war set to stoke oil prices

Druckenmiller said contrarianism is "overrated," and he isn't bothered by exposure to a crowded trade. But he also flagged past mistakes, such as buying Nvidia (NVDA) in the first half of 2022 but then cutting his stake in mid-2024.

He also discussed a big bet on biotech, highlighting how the market has been undervaluing one pick, Teva Pharmaceuticals $(TEVA)$, of which he became more enthusiastic following a meeting with its management. The "best use case out there of AI is biotech, through drug discovery, diagnostics, monitoring - everything," Druckenmiller said, noting that that sector has "been on its butt for like four years."

Read on: Private-credit 'cockroaches' and the AI 'scare trade' hammered stocks in February. Here's what else has investors shaken up

-Barbara Kollmeyer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 28, 2026 10:38 ET (15:38 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.