10 Funds Making the Biggest Bets on Palantir Stock

Key Takeaways

• Palantir Technologies PLTR stock became a favorite of growth and momentum funds with its massive gains in 2024, but it has collapsed 28% in just two weeks.
• The Adaptiv Select ETF ADPV has the highest allocation to Palantir, with 12.4% of its portfolio in the stock.
• The largest of the top 10 funds with the highest weighting to Palantir stock is the $18 billion iShares Russell Mid-Cap Growth ETF IWP.

Until recently, Palantir stock has been a big winner for funds with heavy weightings in the software company, thanks to its technological prowess in artificial intelligence computing. But in recent weeks, the stock has collapsed, putting a dent into those funds’ performance.

For most of the past year, Palantir has been a huge win. During 2024, shares gained some 340%. At its peak on Feb. 18, Palantir stock had another 65%. However, news that the company’s chief executive is planning to sell upwards of $1 billion worth of stock and warnings about cutbacks in government spending (on which the firm heavily relies) sent shares into a steep decline. Since then, the stock is down roughly 28%.

Which Funds Have the Biggest Weights in Palantir Stock?

For this story, we screened for the exchange-traded funds and mutual funds that have the biggest weightings in Palantir stock. We excluded sector funds and leveraged/single-stock ETFs. Funds with under $100 million in assets under management were also excluded.

Among the 10 funds, seven are actively managed. Growth and momentum-based funds dominated the list of the top 10 funds with the largest weighting in Palantir stock. The top spot went to the $123 million Adaptiv Select ETF ADPV, which had 12.4% of its assets in Palantir. The Adaptiv Select ETF is the sole fund on the list to land in the mid-cap blend category. The rest are mid-cap growth funds.

Mid-Cap and Momentum Funds Dominate List of Big Palantir Bets

The domination of the list by mid-cap funds highlights the enormous rise in Palantir’s valuation. The firm’s market cap currently sits at $200 billion, even after the recent selloff, well over any definition of “mid-cap stock.” (For the US, Morningstar currently pegs mid-cap stocks as ranging between $11 billion and $66 billion.) However, just two years ago, the stock’s market cap was less than one tenth of that, hovering around $15 billion, somewhat lower than its $20 billion valuation at its 2020 IPO.

Palantir’s rocket-like ascent is also reflected in the focus on price momentum among virtually all of the largest holders of the stock. Momentum investing is based on buying stocks that rose in the recent past (usually the previous six or 12 months). All but three of the 10 funds with the largest Palantir weighting had substantially higher focus on momentum, relative to their categories, according to Morningstar’s factor profile analysis.

The three funds with lower-than-average momentum focus for their category were all funds from ARK Investment Management or sub-advised by it: the $291 million ARK Space Exploration & Innovation ETF ARKX, the $6.1 billion ARK Innovation ETF ARKK, and the $192 million American Beacon ARK Transformational Innovation Fund ADNIX. ARK, the growth-stock-focused active management firm run by Cathie Wood, also comes up more than any other firm on the list, with no others appearing more than once.

While these funds have been riding a winner with Palantir, the recent selloff has caused them to hit an air pocket. These top holders have landed in the bottom corners of their fund categories, though their one-year track records remain strong.