Billionaire Ken Griffin Just Sold Nvidia in Exchange for this Artificial Intelligence (AI) Stock

Ken Griffin’s Investment Moves

Hedge fund manager Ken Griffin made significant changes to his portfolio in the recent quarter. He reduced his stake in Nvidia (NVDA) by 79%, selling 9.282 million shares. Concurrently, he increased his holdings in Palantir Technologies (PLTR) by 1,140%, adding 5.222 million shares to his portfolio.

Nvidia’s Prospects

Nvidia’s core competency lies in the development of advanced chipsets called graphics processing units (GPUs), which play a crucial role in artificial intelligence (AI). However, concerns have emerged regarding rising competition. Advanced Micro Devices and Intel offer viable alternatives for Nvidia’s products. Additionally, tech giants like Tesla, Meta Platforms, Microsoft, and Amazon are investing heavily in their own hardware development, potentially eroding Nvidia’s market share in the long run.

Palantir’s Growth and Potential

Palantir is an enterprise software company that provides data analytics platforms to the military and private sector. Its revenue has accelerated, and its operating leverage has improved through margin expansion and consistent profitability. Furthermore, Palantir’s recent inclusion in the S&P 500 may attract more institutional investors.

S&P 500 Inclusion and Institutional Ownership

Companies included in the S&P 500 typically receive increased attention from investment banks and analysts, leading to potential inflows from institutional investors. These inflows could strengthen Palantir’s brand and perception in the investment community, further driving its stock price.

Analyst Recommendations

The Motley Fool’s Stock Advisor analyst team selected 10 stocks for investors, but Palantir Technologies was not included. However, Nvidia was recommended in 2005, and an investment of $1,000 at that time would have grown to $710,860 as of 2024.

Reasons for Griffin’s Swap

While the rationale behind Griffin’s swap is not entirely clear, the timing of Palantir’s S&P 500 inclusion may have played a role. The company’s long-term prospects appear solid, and its relationships with Microsoft and Oracle could fuel future growth. As a result, Griffin’s decision to swap Nvidia for Palantir could be seen as a strategic move.