Billionaires Exit Philip Morris While Backing Alphabet: What This Shift Tells Us About the Market

When Hedge Fund Titans Start Moving, Retail Investors Should Pay Attention

It’s no secret that tracking billionaire investment moves can be revealing. In the third quarter, several heavyweight hedge fund managers made bold portfolio decisions that painted a clear picture of where smart money is flowing. On one side, they were trimming positions in Philip Morris International — a high-dividend tobacco play that had delivered solid returns. On the other, they were aggressively building stakes in Alphabet, one of the Magnificent Seven darlings.

But here’s what matters: these weren’t isolated bets. When multiple billionaires move in the same direction, it’s worth understanding why.

The Philip Morris Retreat: Why Titans Are Stepping Back

Philip Morris shares climbed 27% year-to-date through mid-November, but the momentum hit a wall starting in July. That timing coincides with when Stanley Druckenmiller’s Duquesne Family Office and Philippe Laffont’s Coatue Management both liquidated their entire holdings in the tobacco giant.

Druckenmiller’s Duquesne completely exited its nearly 816,000-share position, while Coatue Management divested approximately 1.3 million shares. What spooked them?

The company’s second-quarter earnings revealed a critical soft spot: while overall profits beat expectations and management raised guidance, revenue disappointed. More importantly, growth in Zyn — Philip Morris’s smokeless nicotine pouches and the company’s future lifeblood — sparked investor concerns despite remaining robust.

When Philip Morris reported third-quarter results in late October, management disclosed it had run promotional campaigns for Zyn. This raised red flags about whether the product could maintain its competitive edge as the market heats up with new entrants.

Despite the smoke-free segment growing 17.7% year-over-year, the market grew concerned. The stock’s valuation also climbed to roughly 25 times forward earnings by July, making it less attractive at those multiples.

Still, Philip Morris isn’t without appeal for income-focused investors. Its trailing-12-month dividend yield hovers around 3.6%, while free-cash-flow yield sits near 4.2%.

The Alphabet Play: Why Billionaires Are Accumulating

Here’s the contrasting story: three major players — Coatue Management, Duquesne Family Office, and Warren Buffett’s Berkshire Hathaway — all initiated fresh Alphabet positions during the same quarter.

Coatue purchased roughly 2.1 million shares. Duquesne acquired over 102,000 shares. But the real headline came from Berkshire: Buffett’s holding company acquired more than 17.8 million shares valued at over $4.3 billion by quarter-end.

Why are they bullish? Alphabet faced significant headwinds earlier this year, including a Justice Department antitrust lawsuit. A federal judge ruled that Google had indeed engaged in monopolistic practices across search and digital advertising. However, the sentencing was far more lenient than many expected — the judge rejected the DoJ’s request to force a Chrome divestiture.

The artificial intelligence narrative has also shifted favorably. Initial worries that AI chatbots like ChatGPT would cannibalize Google’s search dominance (where Google commands 90% market share) have largely faded. Investors now recognize that Google itself is competitive in AI search and positioned to defend its core business.

Alphabet trades at less than 28 times forward earnings, offering better value than most other Magnificent Seven peers. Beyond search, the company operates multiple high-growth divisions that continue generating strong returns.

The Bottom Line

When billionaire investors shift capital between stocks, it tells us something. The Philip Morris exit combined with the Alphabet accumulation suggests a broader reallocation from defensive, mature dividend plays toward growth-oriented tech plays that still offer reasonable valuations. Whether that trade makes sense for you depends on your investment timeline and risk tolerance — but ignoring these moves entirely would be shortsighted.