Just caught something interesting about how one of Silicon Valley's most influential operators is positioning his hedge fund right now. Peter Thiel, the Palantir co-founder and venture capitalist, made some notable portfolio moves in Q3 that basically signal where his conviction lies heading into 2026.

Thiel runs Thiel Macro, a hedge fund managing $74 million, and here's what caught my attention: he completely exited Nvidia and trimmed Tesla, but loaded up on Apple and Microsoft instead. Now these two stocks make up 61% of his entire portfolio - 27% in Apple and 34% in Microsoft. That's a pretty bold concentration play for someone with his track record.

Let me break down what Peter Thiel is seeing in each position.

On the Apple side, the fundamentals are actually solid. They just reported strong Q1 results for fiscal 2026 - revenue jumped 16% to $143.7 billion despite tariff headwinds, and earnings per share climbed 18% to $2.84. China sales rebounded hard too, up 38% after struggling the year before. But here's the real move: Apple announced they're using Alphabet's Gemini models to power Siri instead of building their own large language models in-house. It's an interesting strategy shift. Shows some limitations in their AI development, but it could actually let them monetize AI services faster, especially with that premium Apple Intelligence tier they're planning to roll out.

The Microsoft position is where I think Peter Thiel sees the bigger AI opportunity though. Their copilot strategy is firing on all cylinders - copilot seats grew 160% last quarter with daily active users up 10x. They just launched Agent 365 to manage generative AI agents across platforms, and Azure is consolidating everything into their Foundry platform. The numbers here are wild: customers spending at least $1 million per quarter on Foundry grew 80% in the December quarter. Plus, they've got that 27% stake in OpenAI with exclusive rights to their best models. Every developer building with those models either uses Azure or deals directly with OpenAI - Microsoft wins both ways.

Now, Microsoft stock did take a 10% hit after disappointing quarterly results came out. Capital expenditures for AI infrastructure ran hotter than expected, and Azure growth slowed a bit. But if you look past the noise, adjusted earnings still grew 24%, which means the current 27x earnings multiple actually looks reasonable compared to the growth they're delivering.

Apple's trading at 33x earnings though, and that feels stretched for a company projecting just 10% annual earnings growth over the next three years. That's probably why Peter Thiel sized the Microsoft position bigger.

The macro takeaway here is interesting: Peter Thiel is betting big on the companies that are actually monetizing AI at scale right now, not the infrastructure plays. Whether you agree with that thesis or not, it's worth paying attention to how conviction capital is moving in the market. The fact that he's putting 61% of his hedge fund into just two AI-focused software companies tells you something about how he's thinking about the next few years.