Another Famous Tech Investor Sold Some Palantir Stock—Time To Do the Same?

Ark Invest’s Cathie Wood, who’s a big investor in disruptive innovators, has been reducing her stake in AI data analytics firm Palantir (NASDAQ:PLTR | PLTR Price Prediction) in recent weeks. And a bit of profit-taking at quite a volatile and anxious time certainly does seem wise, especially as Dr. Michael Burry looks to keep those subscribed to his newsletter  informed on his views of big tech and his bearish put positions.

Undoubtedly, Cathie Wood and her line of Ark Invest ETFs are having quite the incredible year, outpacing the market by a wide margin, thanks in part to the AI boom, falling rates, and a hunger for innovative growth ideas. And while I still believe in the long-term growth prospects of Palantir, I think that Cathie Wood’s latest trims should ring yet another alarm bell for investors who are up big and fearful of a swift reversal, primarily due to valuation concerns.

Cathie Wood’s Ark trims Palantir. But it’s still a major holding in the Ark Innovation Fund

While it’s never encouraging to learn of another seller of shares of Palantir, especially as AI bubble calls grow louder, it’s important to note that the name still represents quite a sizeable part of the flagship Ark Innovation ETF (NYSEARCA:ARKK). Arguably, recent selling activity is less of a running for the hills kind of move, and perhaps more of a smart round of ringing the register.

If Palantir stock is due for a more severe decline, let’s just say I wouldn’t be surprised if Ark were to increase its position. Given the extreme volatility and the recent bounce-back gain of nearly 18% off recent lows, I’d say the stock is in a very difficult spot technically.

Of course, Dr. Michael Burry wants the name to go lower, while other forces, including Palantir CEO Alex Karp, seem more than willing to do everything to keep the $433 billion AI data company moving at its blistering pace. The AI Platform (AIP) is booming, and if the growth can impress, I do think the AI bubble fears and Burry’s warnings might be put to rest, at least for the time being. Until then, though, I think there’s a serious amount of risk in buying up Palantir stock as it soars past $180 per share again.

This bull is still pounding the table loudly on Palantir shares

It’s getting harder to hard the table on Palantir, even as shares wander through a more difficult period. The company clocked in a blowout number that was met with selling. Arguably, that’s a correction that might prove unfair. Once investors digest the results and calm their nerves, perhaps that wonderful quarter might be able to sustain a robust rally later on.

In any case, Dan Ives of Wedbush Securities was in the trenches, reportedly speaking with more “prospective customers” about their viewpoints and the sheer “shock” they have following product demos. I think this AI “shock” factor might be key as the next wave of growth comes in for 2026.

Undoubtedly, it certainly feels like there’s more adoption and growth on the horizon. And if that’s the case, selling shares of Palantir just because others, including Cathie Wood, are might not be the best move in the world, provided you’re willing to ride out a hyper-volatile stock into what could be another AI-induced scare.