Stanley Druckenmiller is out of stock Nvidia (NVDA 0.80%). Saying he regrets selling the stake too soon for his Duquesne Family Office, one of the best investors of all time has confirmed he has exited the high-flying artificial intelligence (AI) stock around from $80 to $95 earlier this year. While he now watches from the sidelines, Druckenmiller participated in much of Nvidia’s 500% gains over the past three years, generating hundreds of millions in gains for his portfolio.

So what does he buy next? We can see through her Filing 13-F with the SEC that he made two big bets for his portfolio this summer. Here’s what Stan Druckenmiller is currently buying instead of Nvidia.

1. Consistent: A new way to bet on AI?

Duquesne’s most important position today is Consistent (COHR -0.90%)representing almost 10% of the portfolio. The company is a supplier of photonics, lasers and materials to the industrial market. In fact, it serves many different market segments, including manufacturing, communications products for Internet and cloud providers, computer chips, and instruments for life sciences research.

These four sectors benefit from favorable winds, particularly in North America, where Coherent generates more than half of its turnover. Arguably, this is a new way to play on growing AI spending, given the importance of manufacturing, cloud and semiconductors to this rapidly growing sector. Perhaps that’s why Druckenmiller is buying the stock.

Over the past 12 months, Coherent generated $4.7 billion in revenue. Revenue increased 9% last quarter. However, looking under the hood, the communications segment (i.e. AI data centers) grew revenue by 19% and now accounts for the majority of Coherent’s sales. This could accelerate revenue growth over the next few years if this trend continues.

Currently, Coherent is not generating much profit due to its reinvestment for growth. Its gross margins are strong, close to 40% last quarter, which should lead to decent profit margins at scale. If Coherent continues to grow revenue due to tailwinds in its end markets, the stock will likely do well for those holding for the long term.

PM/PE ratio data by Y Charts

2. Philip Morris International: A resurgent nicotine market

Druckenmiller’s other bet isn’t focused on technology, so it may speak to those wary of hard-to-understand high-tech industries. In fact, this stock is understandable to everyone.

Philip Morris International (PM -2.21%) is one of the largest tobacco companies in the world. It is one of the most successful traditional tobacco companies in offering less harmful nicotine products, such as nicotine pouches and heat-not-burn tobacco units. Druckenmiller owns the underlying stock as well as call options, making it a new position last quarter.

So far so good with this investment. On October 22, Philip Morris announced strong quarterly results. Shipment volume increased 2.9% year-over-year, revenue increased 11.6% and profit margins increased. Unlike other tobacco companies, Philip Morris is increasing its volumes due to its high exposure to these new, fast-growing products like Zyn nicotine pouches.

This growth shows no signs of slowing down either. In addition to the pricing power implemented on traditional cigarette products, Philip Morris International has enormous room to increase its volume and profits over the coming years. The stock currently has a price-to-earnings (P/E) ratio of 23, which is lower than S&P500. It should be able to grow profits much faster than the market average.

Additionally, the stock offers a dividend yield of 4.11%. No wonder Druckenmiller added the stock to its portfolio last quarter. This is a blue-chip stock with plenty of upside over the next decade.