Billionaire Peter Thiel has assembled an impressive investment portfolio entirely focused on three key players in the artificial intelligence (AI) sector: Tesla, Microsoft, and Apple. Thiel, who co-founded Palantir Technologies, runs the hedge fund Thiel Macro, which notably outperformed the S&P 500 by 16 percentage points over the past year.
Tesla takes the largest slice of Thiel’s portfolio at 39%. Despite recent challenges, including a dip in market share as the electric car segment in the U.S. faces increasing competition from BYD, investors are focused on Tesla’s potential in the realm of AI. The company’s innovative approach to autonomous driving relies solely on cameras, which significantly reduces costs compared to its competitors’ setups that rely on a combination of cameras, radars, and lidar. Moreover, Tesla is investing in humanoid robots, with CEO Elon Musk asserting that the development of Optimus, a humanoid robot, could ultimately represent 80% of Tesla’s value, predicting a colossal potential valuation reaching $25 trillion, marking a drastic rise from its current worth of $1.3 trillion.
Microsoft accounts for 34% of Thiel’s portfolio. The tech giant is leveraging its prowess in enterprise software and cloud computing to capitalize on AI advancements. Recent initiatives include the introduction of generative AI functionalities across its productivity and business intelligence tools, with monthly active users skyrocketing to 150 million by September. Microsoft Azure, the company’s cloud platform, is gaining market share as it expands its offerings and data center capabilities, while its significant stake in OpenAI ensures it maintains exclusive access to cutting-edge models like GPT-5 until 2032. Such strategic moves are set to bolster revenue growth significantly, supported by industry forecasts estimating a 16% annual increase in cloud services spending through 2033.
Rounding out Thiel’s portfolio is Apple, representing 27%. Despite Apple’s dominance in the smartphone market and a strong presence in consumer electronics, the company has faced criticism for its lack of recent groundbreaking innovations. The last major product debut was in 2017. Nevertheless, Apple is beginning to embrace AI, planning to incorporate Alphabet’s Gemini models to enhance Siri’s capabilities. With a user base of over 2.3 billion active devices, Apple is well-positioned to roll out AI-powered subscription services, which could drive additional revenue. However, Wall Street remains skeptical, anticipating only a 10% annual growth in earnings for Apple over the next three years, leading to concerns about the stock being overvalued at a PEG ratio of 3.3.
Overall, Thiel’s singular focus on these three tech giants highlights a confident bet on the transformative potential of AI within their respective industries. While challenges persist, the long-term outlook remains hopeful, especially as both Tesla and Microsoft explore innovative avenues that capitalize on AI trends.