Billionaire Hedge Funds Shift Focus: Buying Palantir, Selling Nvidia
Institutional asset managers have recently released their Forms 13F for the first quarter. These filings highlight an intriguing trend: two billionaire hedge fund managers, known for their strong track records, bought Palantir Technologies (NASDAQ: PLTR) while selling Nvidia (NASDAQ: NVDA). The details are as follows:
- Israel Englander’s Millennium Management acquired 986,457 shares of Palantir, increasing its holdings fourfold. Concurrently, the hedge fund sold 740,500 shares of Nvidia, reducing its stake by 7%.
- Ken Griffin’s Citadel Advisors added 902,486 shares of Palantir, tripling its position. In contrast, it sold 1.5 million shares of Nvidia, cutting its stake by 50%.
Both Citadel and Millennium rank among the top three most profitable hedge funds in history based on net gains since inception. The trades occurred in the first quarter, which ended approximately 45 days ago. For a closer look at the current status of Palantir and Nvidia, please refer to the data below.
Palantir Technologies: Investment by Hedge Fund Titans
Palantir specializes in analytics and artificial intelligence (AI) software, aiding organizations in discerning complex data. The International Data Corporation (IDC) recently named Palantir the market leader in decision intelligence platforms. Additionally, Forrester Research acknowledged the company as a technology leader in AI and machine learning platforms.
In the first quarter, Palantir showed robust performance. The number of customers surged by 39% to 769, while the average spend per existing customer grew by 24%. Consequently, revenue increased by 39% to $884 million, largely due to strong government sales. Non-GAAP (non-generally accepted accounting principles) earnings rose by 62% to $0.13 per diluted share. Management linked these results to heightened demand for its AI platform, which remains a focus post-quarter.
In April, NATO purchased Palantir’s Maven Smart System—a cutting-edge AI platform that integrates data from various sources to enhance battlefield awareness. This transaction followed a significant $100 million contract awarded to Palantir in September, providing multiple U.S. military services access to Maven.
Palantir’s revenue growth has now accelerated for seven consecutive quarters, prompting management to raise its full-year guidance after impressive first-quarter results. However, the company’s stock is currently valued at 64 times forward sales, markedly higher than the next closest software stock, CrowdStrike, which stands at 18 times forward sales, as noted by Louie DiPalma at William Blair Research. This indicates that Palantir could decline by 70% and still retain its position as the most expensive software stock.
While current shareholders looking to hold for the long term may feel secure, potential buyers might consider waiting for a more favorable entry point. The median price target on Wall Street is $100 per share, suggesting a 22% downside from its current price of $129. Purchasing shares at that target would instill greater confidence.
Nvidia: A Chipmaker Hedge Funds Reduced Positions In
Nvidia is a leader in accelerated computing solutions, renowned for its graphics processing units (GPUs) that dominate the market in boosting complex data center workloads such as AI. It captures approximately 90% of AI accelerator sales, with the market expected to grow at 24% annually through 2030.
The company boasts a unique full-stack strategy, augmenting its GPUs with complementary data center hardware, including central processing units (CPUs) and networking equipment. Additionally, it offers a comprehensive software platform called CUDA, which includes numerous code libraries and pretrained models for developers working on diverse AI applications.
Nvidia recently reported stellar financials for the fourth quarter of fiscal 2025, exceeding estimates for both revenue and earnings. Revenue jumped by 78% to $39 billion, driven by strong demand in the data center segment, while non-GAAP net income rose by 71% to $0.89 per diluted share.
Moreover, a recent regulatory change has positioned Nvidia favorably. The Commerce Department rescinded a rule that would have restricted the sale of advanced chips to various countries, allowing Nvidia to further its partnerships, including agreements with Saudi Arabian companies to create AI factories.
Looking ahead, Wall Street predicts Nvidia’s adjusted earnings will grow by 46% in fiscal 2026, ending in January. This optimism renders its current valuation of 45 times earnings comparatively reasonable, leading to a price-to-earnings-to-growth (PEG) ratio of 1—much lower than Palantir’s PEG ratio of 8.5.
The motivation behind Ken Griffin and Israel Englander’s decision to reduce their positions in Nvidia could stem from profit-taking or portfolio rebalancing initiatives. Nonetheless, it likely does not reflect a lack of confidence in the company, as both hedge funds continue to hold Nvidia shares, with it ranking as Millennium Management’s second-largest holding outside options contracts.
Is it Time to Invest $1,000 in Palantir Technologies?
Before investing in Palantir Technologies, consider the following:
The analysis team recently identified what they regard as the 10 best stocks for investors right now—and Palantir Technologies did not make this list. These 10 stocks have significant potential for substantial returns in the years ahead.
Consider how Netflix was included on this list on December 17, 2004… if you had invested $1,000 at that time, you’d have $642,582!*
Or when Nvidia was highlighted on April 15, 2005… a $1,000 investment then would be worth $829,879!*
The average return of the analyzed stocks is 975%—a market-beating performance compared to 172% for the S&P 500. Access the latest top 10 list by joining Stock Advisor.
*Data from Stock Advisor reflects returns as of May 12, 2025.
Trevor Jennewine holds positions in CrowdStrike, Nvidia, and Palantir Technologies. The Motley Fool has investments in and recommends CrowdStrike, Nvidia, and Palantir Technologies. Please refer to the disclosure policy for more information.
The views expressed here represent the author’s opinions and do not necessarily reflect those of Nasdaq, Inc.
