Investing

Billionaires Are Selling Palantir Stock and Buying an Index Fund That May Soar Up to 100%, According to Certain Wall Street Experts

Chris MacDonald

Published: January 9, 2025 4:55 pm

Palantir Technologies (NASDAQ:PLTR) shares surged 283% in 2024, leading the S&P 500 toward its second year of 20%+ gains. Indeed, one could make the argument that Palantir’s rise is indicative of the broader market sentiment right now. This big data and analytics company has seen a surge of investor interest as the company pivots toward AI-driven solutions, which have seen strong uptake not only from the company’s government clients but also a broader range of commercial buyers. 

This has fed into a long-term growth narrative which has allowed PLTR stock to balloon to a valuation of more than 70-times sales. And while most fundamental-first value investors will scoff at such a valuation (and avoid touching this stock with a 10-foot pole), there are plenty of other growth investors out there who will happily continue to add Palantir until the momentum stops.

The question for many Palantir investors, then, is just how long of a momentum-driven runway this stock has, given that there’s a tremendous amount of future growth baked into the company’s current valuation. For billionaire investors like Peter Thiel (one of Palantir’s co-founders), this multiple certainly seems to invite a solid selling opportunity. Recently, Thiel alone sold approximately 16 million shares for $600 million in gross proceeds, bringing his total sales for the year to over $1 billion.

So, does this selling activity from a Palantir insider suggest that now is the time for retail investors to jump ship and focus on a key holding where Thiel is adding to in large quantities (the iShares Bitcoin Trust (IBIT)?

Let’s dive into this question.

Key Points About This Article:

• Peter Thiel is among the billionaire investors that have been selling Palantir stock and buying index funds instead.
• Here are some of the more notable sellers of Palantir stock, and where they decided to put their capital to work.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

The Shift Toward Index Funds

Peter Thiel is among other notable billionaire investors who have been selling their Palantir stock (and presumably taking some very nice gains), choosing instead to invest in a range of index funds. Other notable sales of Palantir stock came from Ken Griffin of Citadel Advisors, who sold 5.1 million shares of Palantir, slashing his stake by 91%. The hedge fund bought 14,521 shares of the Vanguard Information Technology ETF, increasing its position by 3,178%. Additionally, Israel Englander’s Millennium Management sold 4.4 million shares of Palantir, cutting its stake by 90%. The hedge fund bought 2,388 shares of the Vanguard Information Technology ETF, starting a small position. And finally, David Shaw’s D.E. Shaw sold 8.7 million shares of Palantir stock, reducing the firm’s stake by 45%. Instead, the hedge fund added 12,259 shares of the Vanguard Information Technology ETF, starting a small position.

Now, Thiel’s choice to invest in IBIT does suggest this technology founder believes in the future of Bitcoin. Other Wall Street experts such as analysts at Bernstein seem to agree, with a number of price targets for Bitcoin implying roughly 100% growth over 2025, returns which most investors may rightly assume should beat the returns of Palantir over the course of the coming year.

That said, if Palantir has a 2025 that’s even remotely close to its 2024, this won’t be true. But both investments clearly provide investors with some significant (likely) volatility ahead, and unique higher-risk higher-reward profiles that are only suitable for a niche group of investors.

For the other hedge fund managers choose more broadly diversified ETFs, this selling decision may align closer with most investors’ expectations. That’s what makes markets, though.

Analyzing Long-Term Market Trends

These decisions carried out by a range of billionaire investors to move away from Palantir and toward ETFs of their choosing suggests that individual stock picking is a hard game. Indeed, even the pros looking to play certain trends may choose ETFs as key investing vehicles to gain exposure. That’s because the diversification that can come from holding broader baskets can allow for larger positions (and a lower likelihood these reported positions will swing individual stock prices), providing a more steady rise higher.

Markets do still provide investors with plenty of inefficiencies to take advantage of, and these hedge funds are all prone to take advantage of certain idiosyncratic events from time to time. Their positions in Palantir (well-time, for sure) suggest the managers of these funds certainly know what they’re doing. But with all this recent selling pressure, perhaps these insiders know something we don’t? After all, prevailing market trends support continued growth for companies in the AI space.

I think these investors are simply making a cost-benefit call on Palantir stock here, and determining that this rally may be nearing its peak. That’s fair, and it’s a hard assessment to take issue with. While stock indices continue to trade near their all-time highs, there are plenty of potential headwinds that could unfold moving forward, so risk management may become increasingly important in 2025. We’ll have to see how things play out, but these billionaire investors appear to be taking the safe road ahead (if you can call a Bitcoin ETF the safe road).

The Verdict

Peter Thiel’s decision to rotate out of Palantir and into the iShares Bitcoin Trust is certainly an intriguing decision I think many growth investors may want to hone in on. There are plenty of ways investors can move out on the risk spectrum right now, and with more investing vehicles available for those looking to buy Bitcoin in the market, IBIT and other ETFs will likely continue to get more action in the market.