Billionaires Sell Palantir Stock and Buy an IPO Stock Wall Street Says Could Soar Up to 300%

Two billionaire-led hedge funds, Millennium Management and D.E. Shaw, materially reduced their Palantir stakes in Q3—Millennium sold 4.6 million shares (down 91%) and D.E. Shaw sold 6.4 million (down 41%)—while taking small/new positions in Circle Internet Group, signaling a rotation despite Palantir’s strong Q3 results (revenue +63% to $1.1bn, non‑GAAP EPS +110% and raised 2025 revenue guidance). The moves reflect concern over Palantir’s very rich valuation (around 102x sales) and significant short interest versus Circle’s pitch as a regulated stablecoin and payments play: USDC/EURC represent ~25% of a $310bn market today, Circle trades at ~6.5x sales, has rollout traction for its payments network and Street revenue forecasts of ~33% CAGR to 2027, and carries analyst target prices implying ~250–305% upside from the ~$69 share price. For allocators, the trades underscore a preference for regulated crypto-payments exposure with multi-year growth optionality over a high‑multiple AI software name where valuation leaves limited margin for error.

Analysis

Two macro hedge funds materially rotated exposure in Q3: Israel Englander’s Millennium Management sold 4.6 million Palantir shares (a 91% reduction) while adding 500 Circle shares (a ~3% increase), and D.E. Shaw sold 6.4 million Palantir shares (a 41% reduction) while initiating 33,100 shares of Circle. These moves are notable because both funds cut large Palantir holdings despite the company’s strong third-quarter results and took modest positions in Circle amid bullish analyst targets for CRCL at $243–$280 versus a ~$69 market price.

Palantir reported revenue up 63% year‑over‑year to $1.1 billion with non‑GAAP EPS rising 110% to $0.21 and management guiding to 53% revenue growth for 2025; however, the stock trades at roughly 102x sales and faces concentrated bearish activity (Michael Burry’s sizable put exposure) and significant insider selling (> $2 billion by CEO Alex Karp). The valuation multiple is the primary risk, leaving little margin for execution or growth shortfalls despite leading positions in AI platforms.

Circle offers a contrasting risk/reward profile: EURC and USDC represent about 25% of a $310 billion stablecoin market, Circle trades at ~6.5x sales, and consensus models project ~33% revenue CAGR to 2027 with company expectations of 40% annual USDC volume growth. Circle Payments, launched in May, has enrolled 29 institutions with ~500 in the pipeline, and sell‑side targets imply 250%–305% upside, supporting a selectively long, multi‑year exposure but reliant on continued adoption and regulatory stability.

Key Decisions for Investors

• Reduce or refrain from initiating new long positions in Palantir given the 102x sales valuation, concentrated short interest, and recent large hedge fund exits; consider re‑entry only after valuation compression or clear visibility on sustainable margins
• Consider establishing a modest, time‑weighted position in Circle for a multi‑year horizon (>=3 years) given 6.5x sales valuation, projected 33% revenue CAGR to 2027, and payments network traction, but size positions conservatively
• Monitor leading indicators before adding to Circle: quarterly USDC circulation growth versus the company’s 40% target, onboarding metrics for the Circle Payments Network (institution counts and transaction volume), and regulatory developments such as MiCa compliance
• Hedge tail risk for both names by using position sizing limits or option protections; specifically, watch insider selling, hedge fund flow disclosures, and any divergence between revenue growth and margin expansion as triggers to adjust exposure