Cathie Wood Has Been Selling Palantir Into Every Rally Since Its 29% Earnings Pop
Key Points
Funds run by ARK Invest sold 109,492 Palantir shares on Aug. 4 and 5, worth about $17 million, right after the stock's 29% earnings-day jump.
The funds were still selling on Monday, unloading another 11,525 shares while buying about $26.6 million of Nvidia.
Palantir trades at about 150 times earnings, even with revenue growing 93% year over year.
Palantir Technologies (NASDAQ: PLTR) reported second-quarter results on Aug. 3 that CEO Alex Karp called "otherworldly" in the company's earnings release -- and the numbers back the word up. Revenue rose 93% year over year. Shares jumped 29.5% the next day, narrowly missing their biggest single-day gain ever.
Cathie Wood spent that week selling.
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On Aug. 4 and 5, funds run by her firm, ARK Investment Management, sold a combined 109,492 shares of the artificial intelligence (AI) software specialist, worth about $17 million, according to ARK's daily trade disclosures. And after shares jumped another 10% on Friday, ARK sold again on Monday, unloading 11,525 more shares worth about $2 million.
That same Monday, ARK bought about $26.6 million of Nvidia.
Wood built her reputation on maximum optimism about disruptive technology. But why does she keep selling one of the AI theme's best performers each time it jumps?
Image source: Getty Images.
Selling into strength
The dates carry the message. Palantir's report landed after the market closed on Aug. 3, and the numbers were extraordinary. Revenue rose 93% year over year to $1.94 billion, accelerating from 85% growth in the first quarter. U.S. commercial revenue, the fastest-moving piece of the business, grew 149% year over year to $764 million, U.S. government revenue grew 90% to $809 million, and closed total contract value rose 49% to $3.4 billion. Profitability kept pace, with net income reaching $1.06 billion, a 55% margin. And management raised its guidance across the board, putting third-quarter revenue near $2.16 billion and the full-year outlook at about $8.15 billion, roughly 82% more than 2025.
The stock jumped 29.5% the next day. ARK sold that day and the next. Shares cooled off midweek, and ARK sold again on Aug. 6 before the stock surged about 10% on Friday. Monday brought another sale, and the stock rose anyway, closing at $175.23.
Shares sit near $176 as of this writing, up roughly 40% from where they traded before the report and about 15% below their record high of $207.52.
The trades themselves are small next to Palantir's market capitalization of more than $400 billion. The pattern, however, isn't subtle. Each time the stock has rallied since its report, ARK's daily files have shown sales.
Wood has traded this range before
To be fair, nothing here looks like abandonment. Some of the selling may be ordinary portfolio management, since funds often trim a fast-rising position to keep it from getting too big.
And Wood has worked both sides of this stock's swings. In April, with shares down nearly 30% for 2026, ARK bought about $11 million of Palantir.
It bought more in June, and Palantir still ranks among the biggest holdings across ARK's family of funds. Zoom out and the arc repeats. ARK built the position up in 2024, sold much of it into 2025's climb, and bought back in as shares fell earlier this year.
About 150 times earnings
The price is steep by almost any measure: At about $420 billion, Palantir costs about 150 times the earnings it generated over the past year. Even measured against the earnings analysts expect from it over the next 12 months, shares trade at about 90 times.
Nvidia, the chipmaker at the center of the AI build-out, costs about 22 times forward earnings. In other words, ARK's two Monday trades sat on opposite ends of a wide gap. It trimmed the software stock priced at 90 times expected earnings and added to the chip giant priced at about a quarter of that.
Of course, Palantir's growth is much faster, and the market knows it. After all, a company compounding revenue at 93% deserves a premium. But even the best growth rates can come down as a business gets bigger, and at these multiples, even a modest slowdown could hit the stock hard.
I don't take the sales as a verdict on Palantir's business, which just closed a second quarter with 93% growth and a 55% profit margin. They look more like a judgment on the price -- and on that point, I think Wood has it right. Shares may well keep climbing anyway, as nothing about the past week suggests the market minds. But at about 150 times earnings, a buyer today is paying for years of quarters Palantir hasn't reported yet.
Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.