Artificial intelligence — with its potential to revolutionize entire industries, has been one of the hottest market segments of the past two years. While the backbone of this exciting new frontier — chipmaker Nvidia (NASDAQ: NVDA), has been the most closely-watched success story, there’s one company in the space that has managed to outperform it, owing to recent surges.
That would be Palantir (NASDAQ: PLTR) — the leading data analytics business has seen a sharp, sudden move to the upside after an especially strong Q3 2024 earnings call which saw a beat in terms of both earnings and revenue.
To contrast, NVDA shares are currently up 180.96% on a year-to-date (YTD) basis — in the same timeframe, Palantir stock has gone up by 298.37%. In other words, one PLTR share was trading at $16.58 at the beginning of the year — at press time, prices have increased to $66.05.
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Interestingly enough, institutional investors and hedge funds were skeptical of Palantir for a long time, whereas retail investors were bullish. The second point remains unchanged — but on the back of such stellar performance, hedge funds have started piling in on PLTR stock— with one notable exception.
Ken Griffin, the co-founder and CEO of Citadel LLC, one of the most successful hedge funds in the world, was a notable Palantir bull — having first invested in the company way back in Q1 2021. Now, a recently released 13-F filing has revealed that the billionaire has slashed his stake in the business by 91%.
Is Ken Griffin’s Palantir stock sale a cause for concern?
Griffin and Citadel held a total of 5,680,767 Palantir shares as of June 30, per the hedge fund’s Q2 2024 13-F filing — as well as call options representing 13,314,100 shares and put options representing 12,148,800 shares.
Citadel’s next 13-F filing was made public on November 14 — the Q3 2024 report, which details the fund’s holdings as of September 30, includes only 508,086 Palantir stocks — a 91% reduction.
While this would appear to be extremely bearish at first glance, the situation is a bit more complicated.
The AI infrastructure business has seen huge returns throughout the year — so taking profits is quite a reasonable move. In tandem with this, Citadel has doubled down on its PLTR options — it now owns calls representing 17,320,900 shares, a 30% increase, and puts representing 12,799,800 shares, 5% more than in the last quarter.
This disproportionate increase in call options suggests a stance that is still fundamentally bullish — on top of that, the fund has increased its Nvidia stock position by 194% — a strong sign that Citadel and Griffin see strong returns yet to come from the burgeoning AI industry.
Featured image via Shutterstock
