We recently published a list of Renaissance Technologies Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other Renaissance Technologies portfolio’s top stock picks.
The American quant hedge fund Renaissance Technologies is known for using statistical and mathematical tools to drive its investment programs. It was founded in 1982 by Jim Simons, a mathematician who worked as a code breaker for the US National Security Agency during the Cold War. As of December 31, Renaissance Technologies had a portfolio valued at over $67.5 billion.
READ ALSO: Cathie Wood’s Stock Portfolio: 2025 Stock Picks and Jim Cramer’s February Portfolio: Top 10 Stocks.
Simons was among the pioneers of quantitative investing. He had an estimated net worth of $31.4 billion at the time of his death in May last year, making him the 51st richest person in the world at the time. His use of mathematical models and algorithms to drive long-term investment returns earned him a legacy that rivaled the likes of Warren Buffett and George Soros.
The Renaissance founder stepped down from active hedge fund management in 2010 and resigned as its executive chairman in 2021. The firm is now headed by Peter Brown, who has a strong educational background in mathematics and computer sciences. His father, Henry B.R. Brown invented the Reserve Primary Fund in 1970, the first money market fund to be established.
Brown is committed to using mathematical models to discover and unlock the value of stocks in the market. 2024 was a strong year for Renaissance Technologies. According to a report on Business Insider, the two funds that are open to investors—Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA)—delivered double-digit returns of 22.7% and 15.6%, respectively.
Its signature Medallion fund performed even better, with a 30% gain, outperforming the broader market by nearly seven percentage points. Medallion was closed to outside investors in 1993 and has since then only been available to past and current employees, and their families. The fund generated average annual returns of 66% for three decades between 1988 and 2018, resulting in over $100 billion in profits during the period. This earned Medallion the reputation of being one of the most successful investment portfolios of all time.
On February 13, Renaissance Technologies filed a portfolio update, reflecting its holdings for the fourth quarter of 2024. The 13F SEC filings revealed significant changes in the portfolio, including a substantial reduction of stake in a leading technology conglomerate and increased investments in Asia-based artificial intelligence companies during the quarter.
Our Methodology
We scanned Renaissance Technologies’ 13F portfolio, as of December 31, 2024. From there, we picked the top 10 stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NASDAQ:PLTR)
Stake Value as of Q4 2024: $1,723,595,850
Palantir Technologies Inc. (NASDAQ:PLTR) is a technology company that specializes in software platforms for data analytics. These platforms are used by government agencies, financial institutions, and several large corporations.
On February 3, the company announced financial results for the fourth quarter of fiscal 2024. Total revenue for the quarter was $828 million, an increase of 36% from last year. U.S. revenue was posted at $558 million, growing 52% year-over-year. About 61%, or $343 million, of the U.S. revenue was contributed by the U.S. government, whereas the remainder was commercial revenue. The U.S. government revenue was up 45% compared to last year.
Palantir Technologies Inc. (NASDAQ:PLTR) continued to close high-value deals during the quarter. It closed 129 deals valued at over $1 million, 58 deals of at least $5 million, and 32 deals that were worth more than $10 million. This included a $400 million agreement with the U.S. Army in support of the Army Data Platform. The four-year contract has an available ceiling of $618.9 million.
Palantir Technologies Inc. (NASDAQ:PLTR)’s share price has risen 40% year-to-date, with a substantial surge post the Q4 2024 earnings call. The company’s strong financial performance over the past year has attracted investor interest. According to Insider Monkey’s database for Q4 2024, 63 hedge funds held a stake in Palantir, up from 43 at the end of the third quarter.
PLTR is the top pick from the Renaissance Technologies portfolio. As of December 31, 2024, the hedge fund had a stake of over $1.7 billion in the company.
Overall, PLTR ranks 1st on our list of Renaissance Technologies portfolio’s top stock picks. While we acknowledge the potential of software companies, 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 more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
