Billionaires’ Dilemma: Palantir’s Ascent, Nvidia’s Descent

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Since the dawn of 2023, the stock of Nvidia (NVDA) has ascended 1,100%, while Palantir Technologies (PLTR) has soared 2,360%. Yet, in the second quarter, certain hedge fund magnates, whose judgments are often held in high esteem, divested their stakes in Nvidia and embraced Palantir-a decision that might stir murmurs among the faithful of Wall Street, who, with their eyes fixed on the horizon, deem Palantir overvalued.

  • The billionaire Israel Englander of Millennium Management, whose acumen in the art of capital allocation is as renowned as his penchant for discretion, divested 1.1 million shares of Nvidia, curtailing his position by 12%. In parallel, he acquired 3.6 million shares of Palantir, swelling his stake by 282%.
  • Similarly, the enigmatic Chris Rokos of Rokos Capital Management, whose strategies are as elusive as they are effective, liquidated 283,544 shares of Nvidia, reducing his exposure by 14%, while augmenting his Palantir holdings by 185%.

Notably, both hedge funds have outpaced the S&P 500 (^GSPC) over the past three years, their performances a testament to the alchemy of their managers. For the individual investor, such triumphs are both a beacon and a riddle.

Nvidia: The Stock Englander and Rokos Sold in the Second Quarter

Nvidia’s first-quarter results, a symphony of robustness, revealed a 69% surge in revenue to $44 billion, driven by insatiable demand for artificial intelligence infrastructure. Non-GAAP net income, too, rose 33% to $0.81 per diluted share. Yet, the specter of export restrictions on China cast a shadow, only to be dispelled by the thawing of political winds under President Trump.

The investment thesis of Nvidia is as clear as the skyline of a bustling city: its dominance in data center GPUs, the engines of AI, and its leadership in generative AI networking gear, coupled with a burgeoning cloud software division, render it indispensable. Its competitive moat, forged in technical mastery and the inertia of switching costs, is formidable. The CUDA platform, a labyrinth of tools for AI development, binds programmers to its fold.

Grand View Research forecasts a 36% annual growth in AI spending through 2030, a trajectory where Nvidia, with its strategic positioning, seems poised to lead. Wall Street’s projections of 30% annual earnings growth for the next three years suggest that its current valuation of 57 times earnings is not unreasonable, but rather a calculated bet on the future.

Yet, why did Englander and Rokos part with their shares? Perhaps a simple act of profit-taking, a prudent maneuver in the ever-shifting tides of the market. To infer a loss of confidence would be hasty; excluding options, Nvidia remains a top 10 holding in both funds. For the patient investor, its allure endures.

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Palantir: The Stock Englander and Rokos Bought in the Second Quarter

Palantir’s second-quarter results, a testament to its vigor, saw a 43% rise in customer count to 849 and a 28% increase in average spend per existing client. Revenue, bolstered by this momentum, surged 48% to $1 billion, with non-GAAP net income leaping 77% to $0.16 per diluted share. The company’s trajectory, though, is as precarious as a flame in a storm.

Palantir’s competitive edge lies in its ontology-driven software, a framework that intertwines data with actionable insights. This architecture, praised by its chief technology officer as a “unique moat,” enables users to extract evolving wisdom from their data. Forrester and IDC, esteemed arbiters of technological merit, have recognized its leadership in AI/ML and decision intelligence platforms.

Yet, the valuation of Palantir is a paradox-a gilded cage. At 120 times sales, it dwarfs even Nvidia’s 29 times, a disparity that invites both awe and trepidation. To suggest that its shares could plummet 75% and still reign as the most overvalued S&P 500 constituent is to acknowledge the folly of markets.

Why, then, did Englander and Rokos acquire it? Perhaps a gamble on momentum, a fleeting allure of rapid gains. But for the prudent investor, such a stock is a tempest in a teacup-tempting, yet fraught with peril. Until its valuation aligns with reason, it remains a specter of speculation.

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2025-08-21 13:24