Strong Results Boosted Palantir Technologies’ (PLTR) Performance in Q1

Fred Alger Management, an investment management company, released its “Alger Mid Cap Focus Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1 2025, U.S. equities faced increased volatility due to shifting fiscal, monetary, and trade policies. The rise of advanced AI models from China, which matched U.S. capabilities at lower costs, intensified this uncertainty. As a result, investors reevaluated the high capital expenditures of U.S. tech firms, leading to a sell-off in AI stocks and concerns over domestic AI returns. Against this backdrop, Class A shares of the Fund underperformed the Russell Midcap Growth in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Alger Mid Cap Focus Fund highlighted stocks such as Palantir Technologies Inc. (NASDAQ:PLTR). Palantir Technologies Inc. (NASDAQ:PLTR) develops and deploys software platforms for the intelligence community. The one-month return of Palantir Technologies Inc. (NASDAQ:PLTR) was 6.51%, and its shares gained 469.54% of their value over the last 52 weeks. On May 28, 2025, Palantir Technologies Inc. (NASDAQ:PLTR) stock closed at $123.76 per share, with a market capitalization of $292.062 billion.

Alger Mid Cap Focus Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q1 2025 investor letter:

Palantir Technologies Inc. (NASDAQ:PLTR) builds advanced platforms for data integration, management, and security, enabling interactive, AI assisted analysis for its users. Its core offerings include Palantir Gotham, designed for government clients, and Palantir Foundry, tailored for commercial customers. Originally focused on U.S. intelligence agencies, Palantir has expanded into defense contracts with western governments and entered the commercial market in 2016. During the quarter, the company reported strong fiscal fourth-quarter results, with revenues surpassing analyst estimates due to heightened demand from both U.S. commercial and government clients. Management also raised its fiscal 2025 revenue outlook, citing robust demand in its Artificial Intelligence Platform (AIP), which continues to gain adoption across various industries. Collectively, these developments drove a notable rise in Palantir’s share price, positively contributing to performance during the quarter.

Jim Cramer Says “Palantir (PLTR)'s a Little Too Speculative For Me"

A software engineer manipulating a vast network of code on virtual monitors.

Palantir Technologies Inc. (NASDAQ:PLTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 77 hedge fund portfolios held Palantir Technologies Inc. (NASDAQ:PLTR) at the end of the first quarter, which was 64 in the previous quarter. While we acknowledge the potential of Palantir Technologies Inc. (NASDAQ:PLTR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Palantir Technologies Inc. (NASDAQ:PLTR) and shared the list of AI stocks on Wall Street’s radar. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.