Billionaire Peter Thiel co-founded Palantir Technologies and retains a significant stake in the company, approximately 100 million shares. In addition, he manages a hedge fund known as Thiel Macro, which recently divested all stocks from its portfolio.
According to SEC Forms 13F, in the third quarter of 2025, Thiel Macro had $74 million distributed among Tesla (TSLA 0.88%), Microsoft (MSFT 1.57%), and Apple (AAPL 2.15%), but sold all three in the fourth quarter and did not report any new trades.
While we cannot ascertain Thiel’s exact reasoning, these actions indicate a lack of confidence in Tesla, Microsoft, and Apple, potentially reflecting concerns about valuation across the market. The S&P 500 (^GSPC 0.61%) was notably expensive by historical standards during that time.
Thiel Macro’s Historical Caution
In late 2019, Thiel Macro undertook a similar move, liquidating all its positions and remaining inactive for the next five years. During that period, the S&P 500 yielded returns of about 91%, yet nearly two-thirds of Thiel’s portfolio was allocated to put options against the index.
This strategy allowed him to avoid significant losses, but he also forfeited potential gains during a booming market, particularly as the S&P 500 surged following the emergence of artificial intelligence (AI) developments after the launch of ChatGPT in Q4 2022.
Valuation Insights on the S&P 500
As of Q4 2025, the S&P 500 exhibited an average cyclically adjusted price-to-earnings (CAPE) ratio of 39.1, which significantly exceeds the historical average of 28.5. It’s worth noting that such a CAPE ratio hasn’t been recorded since the dot-com bubble.
By February 2026, the S&P 500 had become slightly pricier, with a CAPE ratio of 39.2. Historically, this ratio suggests poor performance. If past trends hold, a decline of 4% by February 2027, and beyond, could occur. Remarkably, historical data reveals that the S&P 500 has never shown a positive three-year return when the CAPE ratio is above 39.
Wall Street’s Optimism
Contrary to Thiel’s viewpoint, Wall Street analysts largely consider Tesla, Microsoft, and Apple to be undervalued. For example, analysts suggest a median target price of $477.50 for Tesla—an implied increase of 22% from its current price of $391. Similar targets exist for Microsoft ($600) and Apple ($302.50), indicating substantial potential growth.
In summary, Thiel Macro has displayed mixed outcomes. While it successfully avoided losses in 2019, it also missed considerable gains due to inactivity. Despite the S&P 500’s current high valuation, Wall Street maintains a positive outlook on Tesla, Microsoft, and Apple.
