The Only 3 AI Stocks Billionaire Peter Thiel's Hedge Fund Owns (Hint: Palantir or Nvidia Aren't on the List)

Who are the most tech-savvy investors around? There are several contenders. However, I suspect that many people would name Peter Thiel. He co-founded PayPal (NASDAQ: PYPL) and was the first outside investor in Facebook (now Meta Platforms (NASDAQ: META)). Thiel also co-founded Palantir Technologies (NASDAQ: PLTR).

You might think that Thiel, whose net worth is currently around $24.6 billion, would have a portfolio loaded with artificial intelligence (AI) stocks such as Nvidia (NASDAQ: NVDA) and Palantir. However, the billionaire's hedge fund owns only three AI stocks -- and neither Nvidia nor Palantir are on the list.

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1. Tesla

Thiel slashed his hedge fund's Tesla (NASDAQ: TSLA) position by 76% in the third quarter of 2025. However, the electric car stock remained the largest holding in his portfolio.

What does Thiel like about Tesla? Comments he made in a 2015 interview might be instructive. Thiel stated on Tyler Cohen's "Conversations with Tyler" podcast, "AI feels slightly overhyped." He added, "But if you've got self-driving cars, that would be a significant innovation which would change a decent amount at the margins."

Tesla, of course, has been a pioneer in self-driving car technology for years. The company has more real-world miles of autonomous driving data than anyone else, which could give it a significant competitive advantage over the long run.

But why did Thiel sell such a big chunk of his Tesla stock in Q3? It could be because he disagrees with Tesla CEO Elon Musk's strategy of prioritizing the development of humanoid robots. Thiel told The New York Times last year that he had spoken with Musk about Musk's vision of 1 billion humanoid robots within 10 years, and seemed to express some skepticism.

2. Microsoft

Thiel bought 49,000 shares of Microsoft (NASDAQ: MSFT) in Q3. The purchase propelled the tech giant into the No. 2 spot in his hedge fund's portfolio, accounting for around 34% of its total holdings.

This significant investment in Microsoft aligns well with Thiel's view about the progression of technological revolutions. He has argued that value ultimately shifts from the "shovel sellers" to the "builders." In Thiel's paradigm, Nvidia is an excellent example of a "shovel seller" with its GPUs. However, Microsoft is a "builder" with its cloud services and software products that integrate AI, particularly generative AI. Thiel sold all of his hedge fund's stake in Nvidia in Q3 but bought a stake in Microsoft.

Would Thiel feel differently about Microsoft today after its steep sell-off? I doubt it. The stock declined sharply following its fiscal 2026 second-quarter update in large part due to lower-than-expected growth for its Azure cloud service unit. However, the weaker growth was due to Microsoft allocating more data center infrastructure to internal needs rather than meeting external customer demand.

Thiel would probably say that Microsoft is focusing a bit more on building than shovel-selling. And he would likely agree with the strategy.

3. Apple

Apple (NASDAQ: AAPL) was another AI stock that Thiel loaded up on in Q3. His hedge fund initiated a new position in the iPhone maker, buying over 79,000 shares.

Why did Thiel invest so heavily in Apple, which has been widely viewed as a laggard in generative AI? We can only speculate, but I suspect he had two main factors in mind.

First, Apple has one of the largest AI distribution networks, with 2.5 billion iPhones in use worldwide. Its iPhone sales remain strong and could accelerate with the integration of Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Gemini with Siri. Apple is also reportedly planning to unveil its first AI-powered smart glasses later this year. These devices will likely further expand its install base.

Second, Thiel almost certainly approves of Apple's strategy to design its own AI chips. He once stated, "Vertical integration is an under-explored modality of technological progress." Apple's custom silicon is enabling the company to integrate vertically in ways many tech giants can't.

Keith Speights has positions in Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, PayPal, and Tesla. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy.