Palantir Stock vs. Rigetti Computing Stock: Billionaires Buy One and Sell the Other

Hedge fund managers Israel Englander and Cliff Asness increased their Palantir Technologies (PLTR) holdings while reducing or exiting Rigetti Computing (RGTI) positions in Q2, despite both stocks experiencing substantial recent appreciation. Palantir reported robust Q3 results, driven by its AI platform and raised guidance, but its 112x price-to-sales ratio is deemed unsustainable. Rigetti, a quantum computing company, faces a decade-long path to widespread commercial viability for its technology, yet trades at an even higher 1,087x P/S, leading to strong warnings against investment in both due to their extreme valuations.

Analysis

Hedge fund managers Israel Englander and Cliff Asness significantly increased their Palantir (PLTR) holdings in Q2 while reducing or exiting Rigetti (RGTI) positions, despite both stocks experiencing substantial year-over-year gains of 210% and 1800% respectively. Englander tripled his PLTR stake to 3.6 million shares, making it his eighth largest holding, while completely exiting his RGTI position.

Palantir reported robust Q3 financial results, with revenue soaring 63% to $1.1 billion, marking its ninth consecutive acceleration, and non-GAAP net income increasing 110% to $0.21 per diluted share. The company also raised its full-year guidance, forecasting 53% revenue growth in 2025, driven by demand for its AI platform, AIP, which analysts like Dan Ives deem the "gold standard."

Despite strong operational performance, Palantir's valuation is highly stretched, trading at a price-to-sales (P/S) ratio of 112x, which is three times higher than the next closest S&P 500 company. Rigetti Computing, a quantum computing firm, faces a decade-long path to widespread commercial viability for its gate-based systems, yet trades at an even more extreme 1,087x P/S, nearly ten times Palantir's valuation.

The extreme valuations of both PLTR and RGTI suggest a significant disconnect from fundamental reality, with a major correction for Palantir considered "all but guaranteed" at some point. The market appears to have gotten ahead of itself, particularly for Rigetti, whose technology's utility for most enterprises is still years away.

Key Decisions for Investors

• Investors should exercise extreme caution with Palantir (PLTR) despite its strong Q3 performance and AI momentum, given its unsustainable 112x price-to-sales valuation which suggests a high risk of future correction.
• Avoid Rigetti Computing (RGTI) entirely, as its 1,087x price-to-sales ratio is deemed absurd, and its core quantum computing technology is likely a decade away from widespread commercial viability.
• Current shareholders of Palantir should consider trimming large positions to mitigate exposure to potential valuation-driven downside.