Palantir vs. Nvidia: Hedge Fund Billionaires Shift Strategies

In partnership with

Greetings, Savvy Investors!

Welcome to another edition of our newsletter where we dive into the most intriguing moves shaping the financial markets. Today’s spotlight is on a striking divergence in AI stock strategies by two of the world’s most successful hedge fund managers.

Institutional Activity Signals a Strategic Pivot

Recent 13F filings from top institutional investors reveal an intriguing shift in investment strategies among some of Wall Street's most successful hedge fund managers. Notably, billionaires Ken Griffin of Citadel Advisors and Israel Englander of Millennium Management have made opposing moves with two leading artificial intelligence (AI) stocks: increasing their positions in Palantir Technologies (NASDAQ: PLTR) while simultaneously trimming their stakes in Nvidia (NASDAQ: NVDA).

Hedge Fund Moves: Palantir In, Nvidia Out

In the first quarter, Griffin’s Citadel Advisors significantly increased its holdings in Palantir by acquiring 902,486 shares—tripling its position. At the same time, it offloaded 1.5 million shares of Nvidia, halving its stake. Englander's Millennium Management followed a similar path. These hedge funds, ranked among the most profitable in history, are closely watched for their market insights. While the data reflects Q1 activity, it’s worth examining the fundamentals behind these stocks for a more current perspective.

Palantir Technologies: Riding the AI Wave

Palantir specializes in AI and data analytics platforms tailored for complex decision-making. Recently, industry authorities like the International Data Corporation and Forrester Research named Palantir a leader in decision intelligence and machine learning platforms, respectively.

Strong Q1 Performance and Expanding Government Contracts

The company's performance in Q1 was strong: customer count surged 39% year-over-year to 769, while average spend per customer rose 24%. As a result, total revenue climbed 39% to $884 million, driven in large part by growth in government contracts. Non-GAAP earnings rose 62% to $0.13 per share. This momentum appears to be continuing, fueled by strong demand for its AI capabilities.

For instance, in April, NATO selected Palantir’s Maven Smart System—a platform that integrates data from drones, satellites, and other sources to enhance battlefield awareness. This follows a $100 million U.S. military contract secured last September for the same platform.

Perhaps most notably, Palantir has now posted revenue acceleration for seven consecutive quarters. The company also raised its full-year guidance following its Q1 results. Despite these bullish indicators, Palantir stock is priced at an extreme premium—trading at 64 times forward sales. To compare, the next most expensive software name, CrowdStrike, trades at 18 times

Valuation Concerns: A Double-Edged Sword

Investors with a long-term horizon might consider holding the stock, albeit while bracing for volatility. However, new entrants may prefer to wait for a more attractive valuation. Analyst consensus currently targets the stock at $100 per share, which would represent a 22% pullback from its current price of $129.

Nvidia: Dominating AI Infrastructure

Nvidia remains a central player in AI infrastructure, best known for its industry-leading graphics processing units (GPUs), which represent around 90% of global AI accelerator sales. Analysts expect the AI hardware market to grow at an annual rate of 24% through 2030, a promising backdrop for Nvidia’s continued dominance.

Full-Stack Ecosystem and Software Synergies

The company’s competitive advantage lies in its full-stack ecosystem—pairing GPUs with central processing units (CPUs), networking components, and its CUDA software suite. CUDA includes a vast array of code libraries and pretrained models that simplify AI development across various sectors, from robotics to predictive analytics.

Impressive Financial Results and Regulatory Tailwinds

In Q4 of fiscal 2025, Nvidia reported revenue of $39 billion, up 78% year-over-year, and non-GAAP net income of $0.89 per share, marking a 71% increase. Growth was particularly strong in its data center segment, underpinned by soaring AI-related demand.

Adding to the positive outlook, Nvidia recently benefited from a regulatory shift. The U.S. Commerce Department reversed a rule that had previously limited the global export of advanced AI chips. Nvidia moved quickly, finalizing agreements to supply Saudi firms with the hardware necessary for developing AI infrastructure.

Valuation and Growth Outlook Remain Strong

Wall Street forecasts Nvidia's adjusted earnings to grow 46% in fiscal 2026. With a current price-to-earnings (P/E) ratio of 45 and a price-to-earnings-to-growth (PEG) ratio of 1, the stock appears reasonably valued considering its growth rate. In comparison, Palantir’s PEG ratio stands at 8.5, reflecting a much steeper valuation.

Despite the recent selling activity by Griffin and Englander, Nvidia remains a core holding—ranking as Millennium's second-largest position, excluding options. Their trades likely reflect portfolio balancing or profit realization, not a fundamental shift in confidence.

Final Thoughts: Two AI Giants, Different Investment Cases

Palantir and Nvidia are both leaders in the rapidly evolving AI landscape, but their roles differ—Palantir provides platforms for AI-powered decision-making, while Nvidia builds the infrastructure that powers such applications. While hedge fund activity has recently favored Palantir over Nvidia, investors should weigh valuation, growth potential, and personal risk tolerance before drawing conclusions. Both companies have compelling long-term narratives, but only one currently trades at a reasonable price.

Thank You for Reading

We appreciate your time and interest in staying informed about key investment trends and market movements. If you found this analysis helpful, feel free to share it with fellow investors or reach out with your thoughts and feedback.

Until next time, stay curious and invest wisely!

Disclaimer

This content is for informational purposes only and should not be considered financial advice. Please consult a financial advisor before making investment decisions.

Gold hitting record highs

The price of gold keeps heating up. If the record-breaking year of 2024 wasn't enough, gold hit a major historic 2025 milestone by crossing the $3,000/ounce threshold!

Here are 3 Key Reasons:

1. Looming economic & political uncertainty

2. Increasing central bank demand

3. Rising National Debt - over $36 Trillion

So, could gold surge even higher?

According to a recent statement from Jeffrey Gundlach, famed American business man and investor… “Gold continues its bull market that we’ve been talking about for a couple of years, ever since it was down to $1,800.” He expects gold to reach $4,000/oz.

Is it time you learn more about precious metals?

Get all the answers in your free 2025 Gold & Silver Kit. Plus, if you request your free kit today, you could qualify for up to 10% Instant Match in Bonus Silver*.

Learn more >>

_{*Offer valid on qualified orders of Goldco premium products only. Receive up to 10% in free silver based on purchase amount; cannot be combined with other offers. Additional terms apply—see your customer agreement or contact your representative for details.}