Cathie Wood Is Selling Palantir Stock. Should You?

During 2023 and 2024, investing in the technology sector seemed like a no-brainer. Euphoric narratives surrounding the artificial intelligence (AI) megatrend had investors plowing into different end markets across the technology spectrum, and minting a lot of profits in the process.

But 2025 has been a different story entirely. Just a month ago, the technology sector was down over 20% for the year with consumer electronics, computer hardware, and semiconductors being the biggest laggards. Uncertainty around tariffs and related trade negotiations inspired panic selling in areas that are vulnerable to these policies.

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The tech sector has largely recovered its losses, but one pocket of the tech realm that has proven resilient throughout 2025 is software. Shares of enterprise software darling Palantir Technologies (NASDAQ: PLTR) have surged about 70% year to date, making it one of the top-performing stocks across both the S&P 500 and Nasdaq-100 indexes.

While such a performance suggests that investors just can't get enough of the data mining software player, one notable investor has been reducing her position significantly. Let's explore some recent activity from Ark Invest's Cathie Wood as it relates to Palantir and assess if now is a good time to follow her lead.

Taking a closer look at Ark's recent activity in Palantir stock

Cathie Wood's position in Palantir is spread across five different funds: ARK Autonomous Technology & Robotics ETF, ARK Innovation ETF, ARK Fintech Innovation ETF, ARK Next Generation Internet ETF, and ARK Space Exploration & Innovation ETF.

The table below breaks down Ark's recent selling of Palantir stock between April 28 and May 9, 2025.

Data source: Ark Invest. *Sales made to comply with Internal Revenue Code asset diversification protocols.

You'll notice that the selling on April 28 and 30 is marked with an asterisk. Per Ark's disclosures, these sales occurred in order to comply with asset diversification protocols from the Internal Revenue Code. In order to qualify as a registered investment company, a fund must ensure that no more than 5% of its assets (within at least half of its total portfolio) are invested in any one issuer. Wood's initial selling of Palantir was likely required as the stock's price continued to surge.

However, what's interesting to me is that Wood continued to trim her position prior to Palantir's earnings on May 5, as well as in subsequent days.

Image source: Getty Images.

What may have inspired Wood to sell Palantir around earnings?

The chart below illustrates Palantir's share price action between April 28 and May 9 -- the same period analyzed above:

Data by YCharts.

As the graph above shows, Palantir stock experienced some momentum during the final days of April. Moreover, the stock pulled back right after the company reported first-quarter earnings on May 5, only to then rebound to levels in line with where Wood started to sell in late April.

These trends underscore one thing above all else: Palantir is a volatile stock. Given how much uncertainty is flowing through the capital markets right now, I believe Wood's decision to trim her position during a period of momentum was quite astute.

Should you sell Palantir stock, too?

One important thing investors should realize is that even though Wood has been a net seller of Palantir lately, the AI stock still ranks as the fourth-largest holding in Ark's portfolio as of this writing. While Palantir's weight in Ark's portfolio has a lot to do with the company's incredible run over the last couple of years, I see Wood's decision to hold on to Ark's core position as validation of her conviction in both Palantir and the AI revolution.

Data by YCharts.

Palantir's price-to-sales (P/S) multiple of 94 is also encroaching on all-time high territory. For reference, this is more than double what popular companies such as Amazon and Cisco peaked at during the dot-com boom.

Although I am bullish on Palantir's prospects over the next decade, the stock is likely to face some pressure in the near term. Historical trends suggest Palantir stock is due for a pullback, and it's my suspicion that Wood decided to take some gains off the table should such an event occur.

While I would not sell an entire position in Palantir today, the current valuation suggests trimming your position and cashing out some gains could prove to be a wise move in hindsight.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Palantir Technologies. The Motley Fool has positions in and recommends Amazon, Cisco Systems, and Palantir Technologies. The Motley Fool has a disclosure policy.