What Griffin's Billion-Dollar Bets Reveal About AI Stock Investing

When billionaire Ken Griffin’s Citadel Advisors made strategic moves in the third quarter, picking up shares of two explosive AI stocks, it sent a clear message about where sophisticated money sees opportunity. Griffin, who runs the most profitable hedge fund in history by net gains, added 388,000 shares of Palantir Technologies and 128,100 shares of Robinhood Markets—two companies that have delivered staggering returns since early 2023. But what makes Griffin’s positions particularly instructive isn’t just the stocks he chose, but what they reveal about evaluating AI investments at different valuations and growth stages.

Why Palantir Caught Griffin’s Attention

Palantir Technologies represents the cutting edge of enterprise artificial intelligence. The company provides analytics software to both commercial enterprises and government agencies through its flagship products Gotham and Foundry, which integrate machine learning models into a sophisticated decisioning framework called an ontology. Beyond these core offerings, Palantir has built an adjacent AI platform that enables clients to embed generative AI directly into their applications and business processes.

The investment case is compelling: Morgan Stanley analysts highlight Palantir as an emerging standard in enterprise AI, while Forrester Research ranked it as a leader in AI decisioning platforms. The International Data Corp. recognized the company’s dominance in AI-enabled source-to-pay software, a technology critical for enterprises optimizing supply chain management. These aren’t casual endorsements—they’re validations from institutions that investors trust.

The financial momentum backs up the hype. Palantir’s third-quarter results crushed expectations, with revenue jumping 63% to $1.1 billion (marking the ninth consecutive acceleration) and non-GAAP adjusted net income soaring 110% to $0.21 per diluted share. Management’s decision to raise full-year guidance signals confidence, with 2025 revenue projected to grow 53%. Moreover, spending on AI platforms is forecast to expand at 38% annually through 2033, according to Grand View Research.

Yet here’s where Griffin’s move becomes complicated: Palantir trades at an absurdly expensive valuation of 96 times sales. While this represents a pullback from its August 2025 peak of 137 times sales, the current price-to-sales ratio makes Palantir nearly three times more expensive than any other stock in the S&P 500. (AppLovin, the second-most expensive, trades at 33 times sales.) This means the stock could decline 65% and still maintain the distinction of being the index’s priciest holding.

The core tension with Palantir is straightforward: it’s an excellent company with genuinely compelling growth prospects, but the risk-reward profile leans heavily toward risk because the valuation is unsustainable. Investors should carefully limit their exposure, regardless of the company’s technological leadership.

The Robinhood Effect: Why Younger Investors Matter

Robinhood Markets tells a different story. This online trading platform engineered for millennial and Gen Z investors has amassed 19 million funded accounts—nearly twice the total of its closest competitor. That positioning matters because of demographics and timing: these generations are poised to inherit over $120 trillion in assets from baby boomers in the coming decades, what some call the greatest wealth transfer in history.

While Robinhood remains relatively small in the overall brokerage market, it’s gaining meaningful share across equities, fixed income, options, and margin trading. More striking is its explosive success in prediction markets: since entering this space in late 2024, Robinhood has captured approximately 30% market share in just over a year—a remarkable achievement.

Robinhood is also making calculated moves in artificial intelligence. The company unveiled Cortex, a conversational AI assistant that helps investors make sense of financial markets by using generative AI to summarize breaking news, analyst reports, and technical information. Recently, Robinhood expanded Cortex with personalized insights that connect real-time data directly to users’ portfolios. The feature is available exclusively to Gold subscribers, who pay either $5 monthly or $50 annually.

The third-quarter financial picture is striking. Funded accounts, platform assets, and net deposits all hit record levels. Revenue doubled to $1.2 billion while GAAP net income more than tripled to $0.61 per diluted share. CEO Vladimir Tenev emphasized momentum in prediction markets specifically, noting that trading volume has doubled in every single quarter since the feature launched. That’s the kind of acceleration that justifies a CEO’s optimism.

Valuation-wise, Robinhood appears considerably more reasonable than Palantir. At 42 times earnings, with Wall Street projecting 22% annual earnings growth over the next three years, the stock looks attractively priced for a company positioned at the center of demographic wealth transfer and benefiting from the prediction market craze.

The Griffin Investment Lesson

What emerges from analyzing Griffin’s dual positions is a sophisticated portfolio construction principle: both high-valuation growth stories and more reasonably-priced opportunities deserve consideration, provided the underlying business case is compelling. Palantir offers exposure to the AI decisioning platform boom but comes with valuation risk that requires discipline. Robinhood offers more balanced risk-reward as it captures generational shifts in investing behavior.

The key takeaway transcends these two specific stocks. History suggests that companies delivering exceptional growth sometimes trade at prices that look expensive in retrospect—yet those same stocks can still generate meaningful returns if business fundamentals justify the premium. The question isn’t whether a stock has appreciated 1,100% or 2,200% already; it’s whether future growth can sustain the valuation. Griffin’s moves suggest he believes both companies can, even if at different risk-reward profiles. That nuance—understanding when premium valuations make sense and when they don’t—separates sophisticated investors from casual market watchers.