Cathie Wood’s Ark Invest has recently offloaded even more Palantir (NASDAQ:PLTR) after the recent post-earnings plunge. Ark still holds PLTR, but the selling action has been big enough to raise eyebrows. Over the past two weeks, she sold shares worth around $79 million. This activity followed an $8.8 million sale in late April.
These sales came hot on the heels of Palantir's first-quarter earnings, which actually beat what analysts were expecting. However, the stock did see a bit of a dip afterwards. This dip has been attributed to sky-high investor expectations. Most investors expected Palantir to trounce the consensus estimates, so the earnings beat wasn’t that much of a surprise.
It is likely a mix of Ark's standard operating procedure and how the market's been behaving lately. On May 6, 2025, Ark's flagship Innovation ETF (NYSEARCA:ARKK) divested 376,874 Palantir shares. This sale was valued at $41 million. The very next day, Ark continued to lighten its Palantir load across several of its ETFs by about $38.8 million.
The stock has delivered solid gains in the past two years, so taking some profits off the table when an investment has appreciated significantly is a common move for Wood.
It's also quite possible that simple portfolio rebalancing was a factor here. When a stock shoots up that fast, fund managers often trim the position. This helps manage risk and ensures no single stock becomes too large a part of the fund. It's worth noting that even after these sales, Palantir is still Ark's fifth-largest holding. It constitutes 6.54% of the firm's portfolio with a value of $564.6 million as of May 8, 2025, though it had previously been the second-largest. Interestingly, around the same time, Ark Invest was boosting its investments in AI chip giants like Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD). The recent sales are definitely a yellow flag from Ark, but I think Cathie is still bullish here in the long run. Palantir still makes up a big portion of their portfolio. The fresh investments in Nvidia and AMD suggest Ark is still very bullish on AI, just maybe diversifying its bets a bit more.
If you're more cautious with your cash or working with a shorter investment window, Ark’s selling could be a signal to take another look at your Palantir position. This is especially true given the stock’s recent choppiness and the market’s generally high hopes for AI companies.
You won’t find any big software stocks as expensive as PLTR right now, so the downside risk is massive if this company stops landing big contracts or if macros keep getting worse. On the other hand, NVDA and AMD are quite cheap if you compare them to their historical multiples. I wouldn’t mirror Ark one-to-one, but I’d certainly consider shifting some gains from PLTR to NVDA if I were sitting on big gains.
