Microsoft and Apple: Why Billionaire Investors Buy and Sell These Tech Stocks Differently

Understanding the Investment Divergence

Three of the world’s most successful investors recently made headlines by taking opposite positions on the same stocks. Peter Thiel’s macro hedge fund has been actively building positions in Microsoft and Apple, while Warren Buffett’s Berkshire Hathaway and Bill Gates’ charitable foundation have been trimming their stakes. This apparent disagreement raises an important question: what explains these divergent investment strategies when it comes to major technology companies?

The answer lies in understanding each investor’s philosophy, time horizon, and current market assessment. While the trades appear contradictory on the surface, they may actually reflect a more nuanced reality about how savvy investors evaluate growth opportunities in the artificial intelligence era.

Thiel’s Strategic Tech Positioning

Thiel, the co-founder of PayPal and a principal architect of Palantir Technologies, has built a reputation for identifying transformative technology trends before they become mainstream. His current portfolio moves reveal a calculated bet on two companies positioned at the intersection of enterprise software and artificial intelligence innovation.

In recent quarterly filings, Thiel’s macro hedge fund made significant portfolio adjustments, completely exiting its Nvidia position while substantially reducing Tesla holdings. The proceeds were strategically redeployed: Microsoft was re-established as a core position, and Apple was added to the portfolio. This rebalancing demonstrates a deliberate shift toward companies with direct exposure to AI commercialization, rather than AI infrastructure providers.

The reasoning behind these moves centers on the conviction that certain technology leaders are better positioned to capture AI value. Unlike infrastructure plays that face commoditization risks, dominant software and consumer platforms offer more defensible competitive advantages.

Buffett and Gates: The Reduction Strategy

Berkshire Hathaway’s approach has been markedly different. While maintaining Apple as its largest equity position, the company has trimmed approximately 15% of its remaining stake—part of a broader reduction that has cut holdings by nearly three-quarters since late 2023. Warren Buffett has publicly expressed concerns about valuation multiples, suggesting that at current prices, the risk-reward proposition has become less attractive.

Similarly, the Gates Foundation Trust has adopted a more cautious stance, divesting roughly two-thirds of its Microsoft position during the most recent quarter. Bill Gates, the company’s co-founder, retains personal holdings that he plans to eventually donate, but the foundation’s reduced exposure signals a preference for deploying capital elsewhere.

These reductions don’t necessarily indicate bearishness about the companies themselves. Rather, they reflect disciplined capital allocation: when positions reach what these seasoned investors consider fair or premium valuations, they take profits and reallocate to areas offering better risk-adjusted returns.

Why Investors Buy and Sell Tech Stocks: The AI Thesis

The divergence in these investment decisions becomes clearer when examining the artificial intelligence opportunity. Microsoft has emerged as a dominant force in enterprise AI services, securing exclusive cloud computing partnerships with OpenAI. The relationship is remarkably comprehensive: Microsoft holds a 27% equity stake in OpenAI, has committed $250 billion to Azure usage, and maintains exclusive commercial licenses through 2032.

This positioning translates directly to business growth. Azure revenue surged 39% in the latest quarter, remarkable for a business already exceeding $75 billion in annual revenue. Management continues emphasizing that demand for AI services substantially outpaces supply expansion, indicating a durable competitive advantage.

Microsoft 365, the company’s enterprise software suite, has successfully integrated generative AI capabilities, driving commercial revenue up 15% and consumer revenue up 25%. The AI monetization engine is working effectively, converting technology investments into measurable financial returns.

Apple, conversely, took a more deliberate approach to AI adoption. The long-anticipated Siri overhaul, featuring advanced AI capabilities, is scheduled to launch this year—potentially catalyzing a new upgrade cycle. More importantly, Apple maintained revenue growth across all major product categories throughout 2024, with services revenue surpassing $100 million for the first time and climbing 14% year-over-year.

The company’s capital efficiency is remarkable. With limited infrastructure spending on AI, Apple continues operating as a cash generation machine, producing $99 billion in free cash flow last year. This capital flowed predominantly toward share buybacks, resulting in earnings-per-share growth of 23%.

Valuation and the Buy and Sell Stocks Decision

Both stocks command premium valuations, with forward price-to-earnings ratios of 29 for Microsoft and 31 for Apple. Buffett’s strategic reduction of Apple holdings reflects explicit concern about these elevated multiples. Yet neither investor has completely exited these positions, suggesting confidence that the underlying business quality justifies ownership at current levels.

The critical distinction is that Thiel views these multiples as reasonable given the AI-driven growth prospects ahead. Buffett and Gates appear to believe the stocks have already priced in substantial AI upside, leaving limited margin of safety at current levels. This represents a classic investors’ disagreement about valuation rather than fundamental business quality.

Analysts broadly anticipate double-digit earnings-per-share growth from both companies, supported by expanding artificial intelligence service adoption and ongoing innovation. For investors comfortable with premium valuations and convinced of AI’s transformative impact, both Microsoft and Apple present compelling opportunities. For value-oriented investors seeking deeper discounts before establishing or expanding positions, the current price levels may warrant patience.

The Bottom Line

When three exceptional investors diverge on stock positions, the disagreement rarely reflects a simple right-versus-wrong scenario. Instead, it typically reveals different philosophies about valuation, growth prospects, and capital deployment timing. Thiel’s decision to buy and sell stocks specifically reflects his bullish stance on near-term AI commercialization and competitive moat sustainability. Buffett and Gates’ reductions suggest caution about near-term valuations rather than skepticism about long-term prospects.

Both Microsoft and Apple possess extraordinary competitive advantages, with commanding positions in their respective markets and meaningful exposure to artificial intelligence opportunity. The question for individual investors isn’t necessarily which billionaire is “right,” but rather which investment thesis aligns with their own risk tolerance, time horizon, and valuation framework.