Why a Billionaire Investor Just Swapped Amazon for a 1,030% AI Powerhouse: The Griffin Meaning Behind This Hedge Fund Move

The Move That Caught Wall Street’s Attention

Ken Griffin, whose portfolio decisions have consistently outpaced the S&P 500, made a significant shift in his holdings during the third quarter. The head of Citadel Advisors reduced Amazon stock by 1.6 million shares while simultaneously acquiring 388,000 shares of Palantir Technologies. This rebalancing matters because Palantir has delivered a 1,030% return since the start of 2024—leaving even Nvidia’s impressive 281% gain in the dust.

But understanding the Griffin meaning here requires looking beyond the surface transaction. What does this move reveal about where elite investors see opportunity in the AI boom?

Palantir’s Explosive Rise: Beyond the Hype

Palantir’s 1,030% surge didn’t happen in a vacuum. The company’s third-quarter results showed revenue climbing 63% to $1.1 billion, marking the ninth consecutive quarter of accelerating growth. Non-GAAP earnings more than doubled, reaching $0.21 per diluted share. This isn’t just momentum trading—it’s driven by genuine demand for the company’s artificial intelligence and data analytics platforms.

Forrester Research crowned Palantir the most capable AI/ML platform on the market earlier this year, ranking it ahead of Google, Amazon Web Services, and Microsoft Azure. The firm noted that “Palantir is quietly becoming one of the largest players in this market.” That recognition reflects the company’s ontology-based software approach, which uses machine learning models to continuously improve decision-making frameworks across supply chain management, retail inventory optimization, and financial fraud detection.

The fundamental question is whether this growth trajectory justifies the current valuation. Palantir trades at 119 times sales, making it the most expensive stock in the S&P 500—by a massive margin. The nearest competitor, AppLovin, sits at 45 times sales. Since January 2024, Palantir’s stock price increased 11-fold while revenue less than doubled. The math is simple: investors have been willing to pay dramatically higher multiples, not because underlying fundamentals changed that dramatically, but because the AI narrative captured imagination.

Amazon: Still a Powerhouse, But Timing Matters

So why did Griffin sell Amazon shares? The answer isn’t that he lost faith. Amazon remains among Citadel’s top 10 holdings despite the reduction. What likely transpired was strategic rebalancing—taking some profits from a mature position while redirecting capital toward higher-growth opportunities.

Amazon’s fundamentals remain formidable. The company operates three powerful growth engines:

E-commerce and Retail: Amazon runs North America and Western Europe’s largest online marketplace. The company deployed generative AI tools across customer service, inventory placement, and last-mile delivery optimization. Its AI shopping assistant Rufus is tracking toward $10 billion in annual sales.

Digital Advertising: As the third-largest ad tech company and largest retail advertiser, Amazon developed generative AI capabilities allowing brands to create images, video, and audio. The company also built agentic AI tools that research products and design campaigns autonomously.

Cloud Computing: Amazon Web Services remains the dominant public cloud provider. AWS introduced custom AI chips for training and inference workloads, offering customers a cost-effective alternative to Nvidia GPUs. The platform also now includes AI agents that automate software development and security operations.

Third-quarter results demonstrate these investments working: revenue increased 13% to $180 billion with accelerating growth in advertising and cloud segments. Operating margin expanded 60 basis points while operating income rose 23% to $21.7 billion. Wall Street projects earnings growth of 18% annually over the next three years, supporting a valuation of 33 times earnings.

The Griffin Meaning: Reading Between the Moves

This portfolio shift reveals how even the most successful investors manage the tension between conviction and valuation discipline. Griffin’s move doesn’t signal weakness in Amazon’s prospects. Rather, it reflects a strategic calculation: Amazon trades at reasonable valuations for its earnings growth, while Palantir’s explosive momentum created an opportunity to rotate into a higher-growth asset class.

However, investors should note that Palantir doesn’t rank among Griffin’s top 300 holdings. His position size suggests measured enthusiasm rather than a major conviction bet. The purchase appears opportunistic—capturing Palantir’s AI-driven momentum while it remains explosive—rather than a signal that he expects this valuation premium to persist indefinitely.

The Valuation Problem Nobody’s Discussing

Here’s what keeps analysts awake at night: Palantir’s price-to-sales multiple cannot expand forever. At 119 times sales, the company has no room for sentiment shifts. A 60% decline would still leave it as the S&P 500’s most expensive stock. The Griffin meaning in choosing this now might be timing a peak in AI enthusiasm, or it might reflect confidence that Palantir’s growth acceleration justifies current multiples.

For retail investors, the lesson is clear: explosive stock performance attracts smart money, but valuation discipline matters. Griffin’s willingness to sell Amazon and buy Palantir speaks to where he sees opportunity. Yet his measured position size in Palantir suggests even he recognizes the valuation risks that eventually confront any stock trading at such extreme multiples.

The real test comes when the AI growth narrative faces pressure. On that day, Palantir’s vulnerability becomes undeniable—and the Griffin meaning of this move may look very different in hindsight.