TLDR
- Billionaires Ken Griffin and Israel Englander sold Nvidia shares and bought Palantir stock in Q1 2025
- Nvidia reported 69% revenue growth to $44 billion in Q1 despite DeepSeek concerns about AI efficiency
- Palantir’s customer base grew 39% to 769 clients with existing customers spending 124% more
- Palantir trades at 107 times sales, making it the most expensive stock in the S&P 500
- Wall Street expects Nvidia earnings to grow 28% annually over the next 3-5 years
Two prominent hedge fund managers made major moves in the first quarter of 2025, selling Nvidia shares while adding positions in Palantir Technologies. The trades highlight shifting sentiment in the artificial intelligence sector.
Ken Griffin of Citadel Advisors sold 1.5 million Nvidia shares, cutting his stake by 50%. He simultaneously added 902,400 Palantir shares, increasing his position by 204%.
Israel Englander of Millennium Management followed a similar pattern. He sold 740,500 Nvidia shares, reducing his stake by 7%, while purchasing 986,400 Palantir shares to boost his position by 302%.
Palantir has delivered exceptional returns since January 2023, with shares climbing 2,000%. The data analytics company has benefited from growing demand for AI-powered business solutions.
Nvidia continues to dominate the AI chip market despite recent challenges. The company reported first-quarter revenue of $44 billion, representing 69% growth year-over-year.
CEO Jensen Huang described demand for AI infrastructure as “incredibly strong.” Non-GAAP net income reached $0.81 per diluted share, up 33% from the previous year.
The DeepSeek controversy earlier this year raised questions about Nvidia’s future. The Chinese AI company reportedly trained sophisticated language models using less expensive hardware than U.S. competitors.
However, concerns about reduced AI infrastructure spending have not materialized. DeepSeek’s efficient training methods may actually increase demand for Nvidia chips by making AI more accessible to smaller companies.
Nvidia’s Market Position Remains Strong
Nvidia’s graphics processing units remain the preferred choice for AI development. The company’s CUDA software platform supports most AI projects and includes specialized tools for autonomous vehicles and robotics.
Wall Street analysts project Nvidia’s earnings will grow 28% annually over the next three to five years. The stock trades at 51 times forward earnings, which appears reasonable given the growth expectations.
Palantir’s Expensive Valuation Raises Concerns
Palantir reported strong first-quarter results with revenue climbing 39% to $884 million. The company added customers at a 39% rate, reaching 769 total clients.
Existing customers increased their spending by 124% on average. Management raised full-year guidance, forecasting 36% revenue growth in 2025.
The company’s Gotham and Foundry platforms help organizations analyze complex data using machine learning models. The newer artificial intelligence platform adds support for large language models and natural language processing.
Forrester Research recognized Palantir as a leader in AI and machine learning platforms. The research firm gave Palantir’s AIP product higher scores than competing tools from Google and Microsoft.
Despite strong fundamentals, Palantir’s valuation raises red flags. The stock trades at 107 times sales, making it the most expensive company in the S&P 500 by a wide margin.
The next closest S&P 500 company by price-to-sales ratio is Texas Pacific Land at 33 times sales. Only a handful of software companies have achieved such extreme valuations in recent decades.
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