We recently published a list of Ark Invest Stock Portfolio: Top 10 Stocks to Buy. In this article, we are going to take a look at where alantir Technologies Inc. (NASDAQ:PLTR) stands against other top stocks to buy from Ark Invest’s portfolio.
ARK Investment Management LLC, commonly known as ARK Invest, is an American investment management firm headquartered in St. Petersburg, Florida. Founded by Cathie Wood in 2014, the firm specializes in actively managed exchange-traded funds (ETFs) focused on disruptive innovation. As of Q4 2024, ARK holds over $12 billion in 13F securities, with its top ten positions comprising slightly over 50% of its diversified portfolio, which typically comprises between 35 and 55 holdings. The firm’s investment approach spans various market capitalizations, sectors, and geographies, aiming to identify and invest in companies poised to lead in transformative technological advancements.
Cathie Wood, born Catherine Duddy Wood in 1955, is widely recognized as one of the most influential figures in the investment industry. As the founder, CEO, and chief investment officer of ARK Investment Management, she has carved out a reputation for her innovative and forward-thinking investment strategies. Wood’s approach to investing has consistently focused on identifying and capitalizing on disruptive innovation, setting her apart as a visionary in the financial sector.
After graduating from the Notre Dame Academy Catholic girls’ school, Wood pursued higher education at the University of Southern California (USC), where she earned a summa cum laude degree in finance and economics in 1981. She later completed a Master of Business Administration in finance at USC’s Marshall School of Business. A key influence in her academic journey was economist Arthur Laffer, known for the Laffer Curve, which theorizes the relationship between tax rates and tax revenue. Laffer’s mentorship helped shape Wood’s understanding of economic theory and her investment philosophy.
Wood’s career in finance took off after graduation, with roles at prestigious firms such as Jennison Associates, where she spent 18 years in various leadership roles, and Capital Group, as an assistant economist. At AllianceBernstein, where she managed over $5 billion, she honed her ability to identify long-term growth trends. Despite criticism of her investment decisions during the 2008 financial crisis, Wood remained steadfast in her belief that disruptive innovation would drive the future of economic growth. She later went on to co-found Tupelo Capital Management, a hedge fund focused on global thematic strategies.
In 2014, Cathie Wood founded ARK Invest with the goal of focusing exclusively on disruptive innovation and seizing the investment opportunities it generates. Her pioneering move involved structuring actively managed investment strategies as exchange-traded funds (ETFs), an industry-first approach that allowed a broader range of investors to participate in emerging technologies. She recognized that investing in such transformative technologies requires active management to navigate rapid changes, an open research ecosystem unrestricted by sectors, geographies, or market capitalizations to capture technological convergence, and the sharing of knowledge to deepen understanding of emerging industries. Reflecting these principles, ARK stands for Active Research Knowledge—a philosophy that underpins the firm’s investment approach.
Accordingly, ARK’s investment philosophy is centered around thematic investing in disruptive innovation, leveraging over 40 years of experience in identifying high-growth opportunities. ARK defines disruptive innovation as the introduction of technologically enabled products or services that significantly alter existing industries. The firm’s research process focuses on cross-sector innovations such as artificial intelligence, autonomous vehicles, Fintech, robotics, energy storage, DNA sequencing, 3D printing, and blockchain technology. ARK’s goal is to seek long-term capital appreciation by investing in these cutting-edge industries, believing that companies driving technological advancements will fundamentally reshape industries and offer outsized returns compared to traditional investment strategies.
Our Methodology
The stocks discussed below were picked from Ark Invest’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders as of Q4: 64
Ark Invest’s Equity Stake: $589.42 Million
Palantir Technologies Inc. (NASDAQ:PLTR) is a data analytics company that builds software platforms for data-driven operations and decision-making, primarily focused on helping government agencies and organizations analyze and visualize data from various sources. It reported its financial results for Q4 and fiscal year 2024 on February 3, 2025, with CEO Alexander C. Karp emphasizing the company’s integral role in the AI revolution. Karp highlighted how Palantir’s early predictions about the commoditization of large language models have materialized, reinforcing the company’s strategic direction. He also acknowledged the contributions of Palantir employees, noting their efforts in driving growth and the well-earned rewards from market-vesting stock appreciation rights (SARs). His statement reflects confidence in Palantir’s ability to maintain its leadership in AI-driven analytics and software solutions.
For Q4 2024, Palantir Technologies Inc. (NASDAQ:PLTR) reported strong growth across key financial metrics. Total revenue increased 36% year-over-year to $828 million against expectations of $776 million, with U.S. revenue growing 52% to $558 million. The company closed 129 deals worth at least $1 million, with 32 surpassing $10 million, showcasing robust enterprise demand. Customer count rose by 43% year-over-year, and Palantir Technologies Inc. (NASDAQ:PLTR) achieved a net income of $79 million and an EPS of $0.14 against analyst predictions of $0.11, underscoring its ability to drive profitability while scaling its operations.
For the full year 2024, Palantir recorded a 29% year-over-year revenue increase to $2.87 billion, with notable growth in both its U.S. government and commercial sectors. U.S. commercial revenue surged 54% to $702 million, while government revenue climbed 30% to $1.2 billion. Palantir Technologies Inc. (NASDAQ:PLTR) reported net income of $462 million and income from operations of $1.13 billion. With $5.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities, Palantir is well-positioned for continued expansion in 2025.
By the end of Q4 2024, hedge fund interest in Palantir Technologies Inc. (NASDAQ:PLTR) had grown significantly, with 64 hedge funds holding positions valued at $3.88 billion. This marked a substantial increase from the prior quarter, where 43 hedge funds had investments totaling $3.09 billion. This rising institutional confidence indicates Palantir’s continued expansion and strong financial performance in the following year.
Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
Overall, PLTR ranks 4th on our list of top stocks to buy from Ark Invest’s portfolio. While we acknowledge the potential for PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.