Over the last two years, there’s not been a hotter trend on Wall Street than the rise of artificial intelligence (AI). In Sizing the Prize, the analysts at PwC predict AI will lift worldwide gross domestic product by $15.7 trillion come 2030.
The overwhelming potential for artificial intelligence to infiltrate almost every sector and industry of the global economy isn’t lost on Wall Street analysts or its top money managers. Thanks to quarterly filed Form 13Fs, investors have the ability to track the buying and selling activity of Wall Street’s most-prominent money managers.
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Although Berkshire Hathaway‘s Warren Buffett is the most-followed of all billionaire investors, there are plenty of other billionaire asset managers known for making waves on Wall Street. Susquehanna International’s Jeff Yass is the perfect example. Yass made a name for himself as a highly successful options trader in the 1980s, which is a strategy employed by Susquehanna today through its market-making operations.
Admittedly, 13Fs don’t tell the complete story about billionaire money managers. For instance, Susquehanna’s 13F won’t show short positions or options where the firm has a short position. Nevertheless, these filings can still be useful in deciphering which stocks, industries, sectors, and trends are piquing the interest of Wall Street’s big-money investors.
Susquehanna’s 13F shows that Yass and his team have been decisive sellers of Palantir Technologies‘ (NYSE: PLTR) shares since 2024 began, and have been piling into another AI stock that’s consistently been in the headlines of late (albeit for all the wrong reasons).
With the exception of AI-graphics processing unit (GPU) company Nvidia, there’s probably not a hotter AI stock on the planet than Palantir. Shares of the company have soared 546% over the trailing-two-year period, as of the closing bell on Nov. 5.
Despite this outperformance, Susquehanna’s 13Fs show that 1,539,566 shares of Palantir stock have been sold in the first-half of 2024, representing a 61% reduction. To reiterate, Yass and his team rely on put and call options, as well as potential short options which aren’t listed in a 13F, to hedge their common-stock positions.
The logical reason for investors to head for the exit with Palantir is its valuation. Even with the company comfortably cruising past Wall Street’s third-quarter sales and profit forecast, and lifting its guidance in both arenas for the remainder of the current year, its shares are valued at 39 times full-year revenue and roughly 116 times forecast earnings. These are nosebleed levels for a tech stock whose growth rate has slowed considerably in recent years.
