Billionaire Israel Englander Sold 59% of Millennium's Stake in Palantir and Has Opted to Pile Into a Stock Consumers Absolutely Adore

Last week, Wall Street kicked off earnings season. This marks a roughly six-week stretch where most S&P 500 companies will lift their proverbial hoods and report their quarterly operating results from the most recent quarter. While these reports help to paint a picture regarding the health of the U.S. economy and stocks, in general, there's another group of data releases that are, arguably, even more important.

Every quarter, institutional investors with at least $100 million in assets under management (AUM) are required to file Form 13F with the Securities and Exchange Commission. A 13F allows investors an over-the-shoulder look to see what Wall Street's smartest money managers bought and sold in the latest quarter. August 14 marked the filing deadline for second-quarter trading activity, and is potentially the most important data release in recent months.

While Berkshire Hathaway CEO Warren Buffett is easily the most-watched of all asset managers, other billionaire investors have garnered quite the following. One highly successful billionaire money maanger that professional and everyday investors tend to closely monitor is Israel Englander of Millennium Management.

Englander and his team run a very active hedge fund, with thousands of positions and close to $216 billion in AUM, as of the midpoint of 2024. Among the many trades undertaken by Englander and his crew during the June-ended quarter, the one that stands out most is the decisive selling activity in ultra-popular artificial intelligence (AI) stock Palantir Technologies (NYSE: PLTR).

Palantir has been a continuous holding in Millennium Management's mammoth portfolio since it became a public company in September 2020. But during the second quarter, Englander oversaw the sale of 7,074,815 shares of Palantir, which reduced Millennium's stake by 59% to 4,973,308 shares.

As of the second quarter, Palantir's stock had more than doubled from an extensive base that kept shares more or less pegged between $6 and $10 from May 2022 through April 2023. With Millennium holding its top-20 positions by market value for an average of only 11 quarters (i.e., less than three years), profit-taking is certainly a viable reason for this more than 7-million-share reduction. But it's probably not the only reason for this aggressive selling.

To be perfectly blunt, Palantir's valuation has become an eyesore. In one respect, the company absolutely deserves some level of valuation premium given that its services are irreplaceable at scale. These "services" include its AI-driven Gotham platform, which aids mission planning for federal governments, as well as its enterprise-focused Foundry platform that helps businesses streamline their operations by making sense of their data.