Billionaires ditch Nvidia for this AI stock that's soared 2,000% since 2023

Economic Times

2 days ago

Nvidia has seen massive growth due to the AI boom. However, some hedge fund managers are shifting focus to Palantir Technologies. Like Ken Griffin and Israel Englander, they have reduced their Nvidia holdings while increasing their Palantir stakes recently. Palantir's AI tools are gaining traction, with revenue and customer acquisition growing.
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Nvidia has been among the largest beneficiaries of the artificial intelligence (AI) boom triggered by the introduction of ChatGPT late in 2022, with stock price soaring 715%, and its earnings per share rising 1,690% in the last 12 months, as per a report. But some of Wall Street's most influential hedge fund managers are turning their sights on a different AI stock that's recorded a 2,000% gain since January 2023 and that company is Palantir Technologies, as per a report by The Motley Fool.According to the report, Citadel Advisors' billionaire Ken Griffin disposed of 1.5 million shares of Nvidia, slashing his stake by half. He was meanwhile building up his position in Palantir by 204%, adding 902,400 shares, as per The Motley Fool report.Even Israel Englander of Millennium Management also cut his stake in Nvidia by 7% and increased his stake in Palantir by 302% as he bought 986,400 shares in the firm, according to the report.These transactions have led to a rising perception among top investors that Palantir might have even more upside in the artificial intelligence domain than Nvidia, as per The Motley Fool report.ALSO READ: Trump blasted for embarrassing typo in tariff letter — misgenders foreign leader Nvidia keeps posting solid performances, with revenue growing 69% from year earlier to $44 billion in the latest quarter, fuelled by record demand for AI chips, according to the report. Non-GAAP net income rose 33% to $0.81 per share, as per the report. CEO Jensen Huang attributed growth to "incredibly strong" demand for AI infrastructure, reported The Motley Fool.But some investors became nervous earlier this year after a Chinese AI firm, DeepSeek, had reportedly trained a sophisticated language model on low-cost and less capable chips than those of Nvidia's top chips, as per the report. This may have been taken by some as a warning sign, but some think it might actually give Nvidia's business a boost by making AI affordable for more companies, according to The Motley Fool.Nvidia is still a clear leader in both generative and physical AI, the latter driving applications such as autonomous vehicles and robotics, as per the report.The Motley Fool reported that Wall Street has projected that Nvidia's earnings will rise at 28% annually over the next three to five years.ALSO READ: Trump's tariff bombshell sends copper prices through the roof, sends markets into frenzy — what's next? Palantir is growing fast as during the first quarter, the company saw revenue grow 39% to $884 million and non-GAAP earnings by 62% to $0.13 per diluted share, as reported by The Motley Fool. Customer acquisition also grew 39% in total clients and 124% in spending from repeat customers, according to the report.The management also increased its full-year guidance and sales are now project to jump 36% in 2025, as per the report.The firm designs analytics software for the commercial and government sectors and its core platforms, Gotham and Foundry, let customers integrate and query complex information with analytical applications and machine learning models, as reported by The Motley Fool.Forrester Research has recognised Palantir as a leader in artificial intelligence and machine learning platforms, awarding its AIP product higher scores than similar tools from Alphabet's Google and Microsoft, according to the report.ALSO READ: VantageScore 4.0 just got a major boost - what it means for your credit and loans Some hedge fund managers believe Palantir may now offer more growth potential in the AI space and are reallocating funds accordingly.Palantir has jumped 2,000% since January 2023, making it one of the best-performing AI stocks.