Yahoo Finance·2025-10-17 21:00Core Insights - Nvidia's stock has increased by 620% since OpenAI's public debut on November 30, 2022, and it is now considered a benchmark for the AI megatrend [1] - Several prominent investors, including Ray Dalio and Stanley Druckenmiller, have reduced their stakes in Palantir while reallocating capital towards Nvidia [2][3][6] - Hedge funds are taking profits from Palantir as its stock reaches record highs, while simultaneously increasing their positions in Nvidia [4][8] Investor Behavior - Bridgewater Associates, led by Ray Dalio, has been cautiously trimming its position in Palantir and fully exited by Q1 2025 [2] - Duquesne Family Office, managed by Stanley Druckenmiller, held 769,965 shares of Palantir at the start of 2024 but exited completely within a year [3] - Citadel reduced its Palantir position by 48% in Q2 while also holding both put and call options, indicating a more complex trading strategy [4] Market Trends - Institutional investors are reallocating capital towards Nvidia, which is perceived to have more upside potential based on its valuation ratios [7][11] - Nvidia's stock has climbed an additional 55% post-split as of October 13, 2024, while Palantir's valuation multiples have expanded, suggesting a more aggressive pricing strategy [8][10] - Nvidia currently trades at a price-to-sales ratio of 28 and a forward price-to-earnings multiple of 42, with its market capitalization reaching record highs [9] Valuation Comparison - Investors are favoring Nvidia over Palantir due to Nvidia's more moderated valuation multiples compared to Palantir's "frothy" profile [10][12] - The shift in investment from Palantir to Nvidia is largely attributed to valuation considerations, with Nvidia seen as a more reasonably valued asset [11][12]