During some recent excavating I came upon a 2" 45 degree elbow extending out of the side of my foundation wall. It sits approximately 12 inches below dirt level and is facing down. There is a small amount of moisture accumulating in the dirt around the elbow. Any ideas as to what this might be and its purpose?

The elbow falls in line with the condensing unit for furnace and a/c. Might possibly be a drain for condensation from the a/c unit.

Is the 45 PVC, cast iron or copper?

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Might possibly be a drain for condensation from the a/c unit.

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Sure sounds like it except for one thing.
We run our AC condensate drains out of 3/4" PVC. Never heard of a 2" one. If I were real curious I would run a small snake up that line and see where it ended up. Good luck and let me know what you find. Tom

Doubt it's a condensate line, they are smaller and terminate above ground level. Can you see it inside the foundation wall?