Large asset managers are mandated to reveal their equity holdings through quarterly Forms 13F, allowing investors to monitor the stock choices of wealthy individuals. For example, several hedge fund managers acquired shares of Palantir Technologies (PLTR 7.69%) and Upstart (UPST 1.35%) in the first quarter, as detailed below:
- Chris Rokos of Rokos Capital Management initiated a new position by purchasing 55,809 shares of Palantir.
- Philippe Laffont of Coatue Management boosted his position in Upstart by 150%, acquiring 521,887 shares.
- Ken Griffin of Citadel Advisors raised his stake in Palantir by 204% with an acquisition of 902,486 shares and increased his Upstart shares by 618% with an additional 202,094 shares.
- Paul Tudor Jones of Tudor Investment expanded his Palantir position by 573% with 149,191 shares and boosted his Upstart holdings by 28% with 13,729 additional shares.
Notably, some Wall Street analysts foresee significant gains for investors. Dan Ives at Wedbush Securities projects Palantir could reach a $1 trillion valuation within three years, indicating a potential 240% upside from its current market cap of $294 billion. Meanwhile, Dan Dolev from Mizuho Securities has set a target price of $85 for Upstart, an anticipated increase of 85% from its current price of $46.
Palantir Technologies: 240% Implied Upside Over Three Years
Initially, Palantir focused on creating customized data analytics solutions for U.S. intelligence. It has since transitioned to offering modular software platforms for both government and commercial clients. Its main products, Gotham and Foundry, help users integrate complex data and extract valuable insights using machine learning technologies.
In 2023, Palantir launched an adjacent Artificial Intelligence Platform (AIP) that supports large language models and natural language processing, allowing organizations to enhance their data analytics with generative AI. Forrester Research recognized Palantir as a leader in artificial intelligence and machine learning platforms.
Palantir’s first-quarter performance was impressive, with a 39% increase in customer count to 769 and a 24% rise in average spending per customer. Revenue surged 39% to $884 million, while non-GAAP earnings jumped 62% to $0.13 per diluted share, attributed to strong demand for its AI platform.
Upstart: 85% Implied Upside Over One Year
Upstart has introduced a lending platform that utilizes artificial intelligence to help financial institutions more accurately assess credit risk compared to traditional credit scores. Its business thrives on a network effect, improving its machine learning models with each borrower’s payment behavior.
The company reported robust financial results in the first quarter, exceeding expectations with loan originations more than doubling, revenues rising 67% to $2.1 billion, and non-GAAP net income increasing to $0.30 per diluted share from a loss of $0.31 in the same quarter the previous year. However, the stock price fell after earnings release, as investors expressed concerns regarding the lending landscape.
This environment, influenced by tariffs from the Trump administration, may restrict economic growth, potentially leading to a recession, which typically makes banks more hesitant to issue credit. Nevertheless, patient investors may find opportunity, as Wall Street expects Upstart’s adjusted earnings to grow at an impressive 195% annually through 2026, rendering its current valuation of 140 times earnings justifiable.
Trevor Jennewine holds positions in Palantir Technologies. The Motley Fool also holds positions in and recommends Palantir Technologies and Upstart. They have a disclosure policy.
