Palantir Technologies (PLTR 8.61%) And Nvidia (NVDA 4.07%) They are up 141% and 174% respectively this year, as the artificial intelligence (AI) boom accelerates. They may look attractive today due to continued solid earnings growth and expectations for the AI ​​market as a whole in the coming years. Analysts predict that today’s $200 billion AI market will grow to more than $1 trillion by the end of the decade.

Both Palantir and Nvidia can benefit from this; Given the pace at which stocks are rising, investors understand this. However, a billionaire investor in particular may have a different view on Palantir. In the second quarter, Coatue Management’s Philippe Laffont sold his entire Palantir position while increasing his stake in Nvidia. Does the billionaire know anything that others don’t? Let’s find out.

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A major technology investor

First, it’s important to note that Laffont is heavily invested in technology (he holds over 200 tech stocks in his fund) and is a big investor in AI stocks, holding positions in players from different countries. Amazon with Microsoft And Taiwan Semiconductor. Artificial intelligence is one of Laffont’s top investment themes this decade, according to an interview with him. Financial Times In 2022.

In Coatue’s market outlook in July, the firm said: “Our analysis shows that public markets remain resilient and AI continues to offer a new vector of opportunity.”

Now let’s move on to Laffont’s moves in the second quarter, starting with Palantir. The average Wall Street analyst recommends holding the stock, and we’ve seen shares continue to rise recently. Moreover, Palantir continues to report significant earnings growth. Just this week, the software company hit record levels of revenue and net income in its third-quarter earnings report and raised its annual revenue forecast.

Palantir helps both government and commercial customers collect their data and use it in the best possible way. The company’s Artificial Intelligence Platform (AIP) leverages the power of AI throughout the process, and customers have been flocking to AIP since its launch last year. The company has cited “relentless” demand and delivered double-digit revenue growth every quarter, so there’s reason to be optimistic about the future.

Now back to our question: Does Philippe Laffont know anything that others don’t? After all, Palantir’s earnings are strong and its shares are rising rapidly; but Laffont sold his entire position. Although it is important to consider movements of billionairesIt is also important to remember that a particular sale may not be due to a loss of trust in a particular company.

Palantir’s 500% gain

Coatue first acquired Palantir shares in the first quarter of 2023, and shares have risen more than 500% since then. That’s why Laffont and his team may have decided to focus on earnings and invest in other promising AI players. It is also possible that the company is too high valuation — stock transactions occurred 113 times forward earnings forecasts — pushed Laffont to make the move. After all, if investors decide that the stock looks too expensive, a high valuation could limit stock performance in the coming months.

All this means that Laffont doesn’t necessarily know something that other companies in the market don’t know. As previously mentioned, Palantir was a profitable investment for the billionaire, and he still believes in the potential of AI to revolutionize many industries. But at a certain point, it makes sense for an investor to lock in gains in certain bullish assets and pursue other opportunities.

And Laffont maintained its bullish AI stance, increasing its position in Nvidia by more than 800% in the second quarter. As previously mentioned, Nvidia shares have also been on the rise this year, but the stock still looks reasonably priced, trading at 47 times forward earnings estimates. And Nvidia has a major catalyst ahead of it with the upcoming release of its new Blackwell architecture; This means that despite recent gains, now could be a great time to enter or increase positions in this top AI stock.