Cathie Wood’s ARK ETFs bought Palantir shares on Friday, increasing their total holdings in the company to more than $283 crore, according to daily trade data on the ARK’s website. The exchange-traded funds, meanwhile, sold AMD shares worth more than $10 million on Friday.
Palantir Technologies shares declined around 14% in five days, and more than 15% in one month. In the longer term, the stock declined around 28% in six months but jumped 38% in one year and 470% in five years.
Trump’s praise for Palantir
Recently, Trump praised Palantir for its “war-fighting capabilities and equipment” amid the country’s war with Iran in the Middle East. “Palantir Technologies has proven to have great war-fighting capabilities and equipment. Just ask our enemies,” he wrote in a post on his social media platform Truth Social.
Palantir is a data analytics company co-founded by billionaire investor and Trump supporter and Republican megadonor Peter Thiel, as per The New York Times. Palantir’s final quarterly report for 2024 mentioned that the company made $1.2 billion in revenue from the US government last year, the report added.
Burry’s bets against Palantir
Michael Burry, popularly known for correctly predicting the 2008 housing crisis, however, remained firm on his bets against the company, triggering AI bubble worries. “I now own the June 17, 2027 Strike Price 50 Puts and the December 19, 2026 Strike Price 100 Puts. I am not selling these today,” Burry wrote in a Substack post on Friday. He began betting against the company last year.Burry recently argued that Anthropic is outpacing Palantir in enterprise AI. He claimed Anthropic may have captured nearly 73% of new enterprise AI spending. That number alone was enough to shake confidence. He also pointed out a key weakness. Palantir still relies heavily on government contracts. Those tend to have lower margins compared to commercial AI deals. Even though Burry later deleted the post, the damage was already done.
AI bubble is years away
Cathie Wood, however, recently dismissed AI bubble worries. In a blog post released in January this year, Wood said that an AI bubble, if any, is “years away”. “What once was the cap in spending seems to have become a floor now that the AI, robotics, energy storage, blockchain technology, and multiomics sequencing platforms are ready for prime time. After the tech and telecom bubble of the nineties, a 20-year peaking process around $70 billion has given way to what could become the most powerful capital spending cycle in history…In our view, an AI bubble is years away!” she wrote.
Palantir stock is trading at extremely high valuation multiples. Estimates suggest around 100x to 235x earnings depending on the metric used. That is far above the sector average, which sits near 20x. The stock has declined more than 16% in one month.
Cathie Wood’s Ark Innovation ETF saw approximately $1.34 billion in net outflows, with $225 million exiting the fund over the past month, according to data from ETF research firm VettaFi cited by TheStreet.
Despite the renewed optimism, Palantir is not among the top 10 holdings of Wood’s ARK ETFs. Tesla, AMD, CRISPR Therapeutics, Tempus, Shopify, Robinhood, Teradyne, Roku, Circle Internet Group and Coinbase are among them, with Palantir taking the 11th position.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)