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On August 14, the quarterly 13F filings were released, offering investors a window into the portfolio moves of Wall Street’s top money managers. The latest data reveals a notable divergence within the AI application sector: five prominent billionaires reduced their positions in Palantir Technologies (PLTR) during the second quarter, while Google parent Alphabet (GOOGL) emerged as a consensus buy among multiple billionaires.
Palantir: Profit-Taking Under the Weight of a Stretched Valuation
Since the start of 2023, Palantir’s stock has surged more than 2,600%, giving it a market capitalization of approximately $423 billion as of August 20. This extraordinary rally reflects the moat built by its Gotham platform—a software-as-a-service solution used by the U.S. government and its allies for military mission planning and oversight—as well as sustained double-digit growth. However, the massive gains have also brought valuation pressures that are hard to ignore. Even after a recent pullback, Palantir’s price-to-sales ratio remains around 75 times, with a price-to-earnings ratio exceeding 150 times.
In the second quarter, five billionaire-run funds—including Two Sigma Investments, AQR Capital Management, Citadel Advisors, and Point72 Asset Management—all reduced their Palantir holdings. Profit-taking is clearly a reasonable explanation, but it may not tell the whole story. Historically, companies at the forefront of game-changing technologies have rarely sustained a price-to-sales ratio above 30 times for any extended period. Palantir’s current valuation level may well be prompting some “smart money” to step to the sidelines.
Alphabet: AI-Powered Cloud Business Ignites a “Collective Buy”
On the other side, Alphabet attracted a rare “consensus buy.” Second-quarter 13F filings show that Stanley Druckenmiller’s Duquesne Family Office established a new position in Alphabet, Dan Loeb’s Third Point significantly increased its stake, and Ken Fisher’s Fisher Asset Management and Cliff Asness’s AQR Capital Management joined as buyers.
Even more striking, in the second quarter following Warren Buffett’s retirement, Berkshire Hathaway launched a major offensive on Alphabet, accumulating approximately 48.1 million shares across both Class A and Class C stock, adding more than $17 billion in new position value. This move pushed Alphabet past Bank of America to become Berkshire’s fourth-largest holding.
What are these billionaires seeing? Alphabet’s Google Cloud is emerging as a core growth engine. In the second quarter of fiscal 2026, Google Cloud revenue surged 82% year-over-year to $24.8 billion, with operating margins improving significantly to 36%. As generative AI and large language model solutions are integrated into the platform, Google Cloud’s growth trajectory has been redefined. Meanwhile, with Google commanding over 91% of the global internet search market, its advertising business enjoys an exceptional moat. With the addition of a high-margin cloud business, Alphabet’s appeal clearly extends far beyond its traditional advertising giant identity.
Market Signal: “Picking the Best” in the Growth Race
The divergent treatment of Palantir and Alphabet in the second quarter reflects a “picking the best among the best” process unfolding in the AI application sector. When an asset’s valuation has run far ahead of its fundamentals, capital naturally flows toward names that offer both growth potential and relatively reasonable valuations. For investors, this may be a signal worth heeding: amid the AI frenzy, whose story can support its valuation, and who will find the next foothold amid the divergence?
