pltr stock: Cathie Wood sells, but why?

Okay, let's break down Ark Invest's recent moves, specifically that Palantir (PLTR) sale. Monday, November 3rd, 38,338 shares gone from the ARK Innovation ETF (ARKK). At $207.18 a share, that's roughly $7.9 million. Not an insignificant sum. But is it a sign of trouble, or just portfolio rebalancing?

Reading Between the Lines

The immediate narrative is "Palantir's killing it!" Q3 earnings blew past expectations – revenue at $1.18 billion against an anticipated $1.09 billion. Adjusted earnings per share also beat forecasts (21 cents vs. 17 cents). The real eye-popper, though, is the U.S. commercial revenue increase: 121% year-over-year, hitting $397 million. That’s the kind of growth that gets headlines.

But here’s where the data analyst in me gets twitchy. A 121% increase sounds amazing, but let's consider the baseline. What was the previous year's commercial revenue? A high growth rate off a small base can be misleading. Without that context, the percentage is just a shiny distraction.

And then there's the Benzinga Edge Stock Rankings, flagging Palantir with Momentum in the 97th percentile. Okay, fine. But what exactly does that mean? What factors are being weighted? How reliable is Benzinga’s ranking system, anyway? (I’ve seen some questionable methodologies in my time.) Momentum is great, but it's not a substitute for fundamental value. It's like surfing – thrilling, but you're ultimately at the mercy of the wave.

Ark, meanwhile, wasn't just selling. They were scooping up shares of Bullish (BLSH), a crypto exchange backed by Peter Thiel. 238,346 shares across ARKK, ARKF, and ARKW, to be exact. At $50.26 a share, that’s about $11.9 million. They also increased their position in Beam Therapeutics Inc (BEAM), buying 56,833 shares through ARKG and a whopping 279,424 through ARKK. They also trimmed positions in Roku Inc (ROKU) and Guardant Health Inc (GH).

The Portfolio Puzzle

So, what's the underlying logic? Is Ark pivoting away from data analytics companies like Palantir and towards crypto and biotech? That's one interpretation. Or is it simply a matter of managing risk and exposure? Maybe Palantir had become too large a position within ARKK, and this was a necessary correction. Hard to say for sure without access to Ark's internal models (which, naturally, we don't have).

I've looked at hundreds of these filings. One thing I've noticed is that Cathie Wood's fund often makes contrarian moves. While everyone else is piling into a stock based on hype, Ark might be quietly taking profits. It's a high-risk, high-reward strategy, and it doesn't always pay off. Remember the Zoom sell-off?

The previous Thursday, they also dumped approximately $3.9 million worth of Palantir. That’s a decent chunk of change.

What I find genuinely puzzling is the timing. Palantir just delivered a stellar earnings report. The stock price is up. Why sell now? Perhaps Ark believes the market has already priced in the good news, and there's limited upside potential left. Or maybe they have concerns about Palantir's long-term growth prospects that aren't reflected in the current market sentiment.

A Cold, Hard Look

Ultimately, this Palantir sale is a reminder that even the most successful investors make mistakes (or at least, appear to make mistakes in hindsight). It's also a reminder that past performance is no guarantee of future results. Ark's track record is impressive, no doubt. But that doesn't mean they're infallible. And it certainly doesn't mean that we should blindly follow their every move. We need to do our own homework, analyze the data, and make our own informed decisions.

Time to Re-Evaluate the Thesis

Ark's Palantir exit isn't a doomsday signal, but it is a data point worth considering. It forces us to re-examine our own investment thesis and ask ourselves: Are we truly convinced of Palantir's long-term potential, or are we just caught up in the hype? And are we comfortable with the risks involved? Those are questions every investor needs to answer for themselves.

The Numbers Don't Lie (But They Can Mislead)

The key takeaway? Don't get blinded by flashy growth percentages or momentum scores. Dig deeper. Understand the underlying data. And always, always be skeptical. That's the only way to survive in this market.