Thiel’s Discards: A Quiet Exit

Mr. Peter Thiel, a gentleman of considerable means and a founder of Palantir Technologies – a company whose operations remain, to the uninitiated, somewhat opaque – has been quietly rearranging his portfolio. One observes these movements with a detached curiosity, not entirely devoid of professional interest, of course. The man possesses a certain… instinct. Though one might add, not always infallible.

His fund, Thiel Macro, has relieved itself of holdings in Apple and Microsoft, two entities currently enjoying the fervent, and often uncritical, approval of Wall Street. Analysts, those eager purveyors of optimistic projections, foresee considerable upside. Apple, apparently, is poised to rise some eleven percent, while Microsoft might even achieve a forty-nine percent ascent. One suspects these figures are constructed with a generous application of hope and a selective disregard for inconvenient realities.

Among the chorus of fifty-two analysts, Apple is deemed worthy of $303 per share. A modest ambition, perhaps, considering the prevailing climate of speculative enthusiasm.
Sixty analysts concur that Microsoft deserves $600. A figure that suggests a belief in perpetual motion, or at least a sustained period of improbable growth.

The quarter in question concluded some two months ago. A sufficient interval for the market to demonstrate its customary volatility. Before imitating Mr. Thiel’s maneuvers, a moment’s reflection is advisable.

Apple: A Polished Apple, Perhaps a Bruised One

Apple reported results that, on the surface, appear encouraging. Revenue increased, driven by the relentless demand for iPhones and the ever-expanding realm of services. Sales in Greater China, one notes, soared. A remarkable feat, considering the geopolitical complexities. Net income also experienced a pleasing increment. All perfectly respectable, and yet… one detects a certain fragility beneath the sheen.

The company’s strength resides in its consumer electronics, naturally. A vast network of active devices provides a fertile ground for the expansion of high-margin services – advertising, payments, the usual temptations. The potential to monetize artificial intelligence is also, undeniably, present. Though the execution, one suspects, will prove more challenging than the pronouncements suggest.

The integrated generative AI features, or “Apple Intelligence,” failed to ignite the recent quarter. A minor setback, perhaps, but indicative of a broader problem: the company’s tendency to arrive late to the party. The reliance on Alphabet’s Gemini models is a pragmatic, if somewhat uninspired, solution. Siri, the long-suffering personal assistant, remains a work in progress. Its resurrection, scheduled for 2026, feels less like a triumph of innovation and more like a belated admission of failure.

The picture, in essence, is one of solid, if unspectacular, performance. The numbers are respectable, the prospects reasonably promising. Yet, one cannot shake the feeling that the stock is priced for perfection. The margin on Apple products is likely to contract, owing to the escalating cost of memory chips. And a price-to-earnings ratio of thirty-four is, frankly, excessive. Mr. Thiel’s decision to exit appears, in retrospect, rather sensible.

Microsoft: A Clouded Outlook

Microsoft, meanwhile, reported equally robust financial results. Revenue increased, propelled by the momentum in software, cloud services, and, of course, the ubiquitous cloud. Net income also enjoyed a pleasing increment. CFO Amy Hood declared the results “exceeding expectations.” One assumes she possesses a vested interest in such pronouncements.

The investment thesis centers on strength in enterprise software and cloud computing. The integration of AI assistants and agents across popular products lays the foundation for future growth. Paid Microsoft 365 Copilot seats increased – a statistic that, while impressive, says little about actual utility. Daily active users also climbed – a metric that, one suspects, is easily inflated.

Microsoft Azure continues to gain market share in cloud infrastructure. Demand for compute capacity exceeds supply – a situation that, while flattering, is unlikely to persist indefinitely. Morgan Stanley’s CIO survey indicates Microsoft is poised to gain share in cloud computing and generative AI. A comforting endorsement, perhaps, but hardly conclusive.

Mr. Thiel’s decision to exit Microsoft is more puzzling. The prevailing anxieties surrounding AI code generation tools are, undeniably, present. Investors fear disruption. Microsoft’s substantial investment in AI raises legitimate questions about return on capital.

However, to dismiss Microsoft entirely would be short-sighted. AI is, almost certainly, the defining technology of our age. And Microsoft is well-positioned to benefit. Its software products and cloud services are integral to countless enterprises. The stock currently trades at twenty-six times earnings – a fair valuation, perhaps, for a company with projected earnings growth of fifteen percent through 2027. Rather than selling, a small position might prove… interesting. Though one should always approach such ventures with a healthy dose of skepticism, and a readily available exit strategy.

2026-02-28 11:52

Apple: A Polished Apple, Perhaps a Bruised One

Microsoft: A Clouded Outlook

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