Peter Thiel Has Steadily Sold Down His Palantir Stake for Years Yet Remains Its Largest Individual Shareholder. Here's What His Selling Pattern Signals for Investors.

The actions of Palantir (NASDAQ: PLTR) co-founder Peter Thiel have drawn investors' attention. In 2024, Thiel sold shares under the Rule 10b5-1 framework. This was a pre-planned sale that occurred prior to its massive run-up in 2024, so it is probably not one that should involve investors.

Thiel's selling resumed in March, when he disclosed a sale of 2 million shares of the company, netting approximately $280 million. Now, the question for investors is whether the sale is indicative of challenges with the software-as-a-service (SaaS) stock or a move made for personal reasons. I believe it is the latter, and here's why.

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Thiel and his Palantir sale

Indeed, insider sales often confuse investors. The SEC does not require insiders to disclose why they sold shares, which typically leaves investors speculating about the reasons for specific sales. This is certainly the case with Thiel's sale of Palantir shares.

Admittedly, the sale could mean that Palantir stock is not a buy right now. Even the most robust growth stocks can struggle to justify a 151 price-ot-earinings (P/E) ratio or a price-to-sales (P/S) ratio of 74, as is certainly the case with Palantir. Such conditions arguably make it a good time to sell smaller portions of one's stake.

However, Thiel still owns roughly 3% of Palantir, around 98 million shares. Hence, a sale of 2 million shares represents only a small portion of his holdings.

Moreover, Palantir is likely a hold if one is already a long-term shareholder. In an increasingly dangerous world, Palantir's Artificial Intelligence Platform (AIP) is a valuable tool for defensive purposes. The AIP has also helped companies make massive productivity gains within their operations.

Knowing that, it is little wonder that revenue of $3.57 billion rose 89% yearly in the first half of 2026. Also, since costs and expenses grew more slowly than revenue, Palantir earned a profit of more than $1.94 billion, a 256% year-over-year gain.

Looking forward, the company forecasts revenue of around $8.15 billion for 2026. If that prediction holds, that will amount to 82% annual growth, a slightly slower but still robust figure.

Finally, market.us estimates a compound annual growth rate (CAGR) of 30.6% for the artificial intelligence (AI) market through 2035. Even though Palantir seems to far exceed that performance, that estimate indicates that the technology has a long way to run, further validating the bull case for Palantir stock.

What investors should do (or not do)

Given the relative size of Thiel's sale and the future of Palantir's AI, investors should probably brush off Thiel's move.

Indeed, seeing a co-founder sell 2 million shares can concern investors. Nonetheless, it accounts for a tiny percentage of Thiel's overall holdings, suggesting he remains bullish on the company.

Palantir's recent financial performance and the industry's optimism indicate that the company's long-term growth should continue. Even if one feels 74 times sales is too expensive, now is probably not a time to abandon a long-term bullish thesis on Palantir stock.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.