Billionaire Israel Englander Sold 96% of Millennium's Stake in Artificial Intelligence (AI) Giant Palantir and Is Piling Into This Beloved Consumer Brand

To build on this point, Wall Street is historically pricey. The S&P 500‘s Shiller price-to-earnings (P/E) ratio, which is also referred to as the cyclically adjusted P/E ratio (CAPE ratio), ended Dec. 2 at 38.61, which is its highest reading during the current bull market cycle, as well as the third-highest reading during a continuous bull market when back-tested 153 years. The Shiller P/E points to an eventual bear market, which would, presumably, hit companies with premium valuations (like Palantir) the hardest.

On the bright side, Palantir absolutely deserves some degree of valuation premium. The company’s AI-driven Gotham platform is responsible for helping federal governments (including the U.S.) plan and execute missions — and there’s simply no replacement at scale for the services (or profits) that Palantir’s Gotham offers.

Palantir’s Foundry platform, which relies on AI and machine learning to help businesses make sense of their big data, is another service to which there is no one-for-one replacement at scale.

But a moat can only carry a company so far. Englander and his team are likely aware of Palantir’s outsized premium, which is why they’ve chosen to cash in nearly all of Millennium’s chips.

On the other end of the spectrum is a stalwart consumer brand that Millennium’s brightest minds, led by Englander, can’t stop buying: auto colossus Ford Motor Company (NYSE: F).

When the year kicked off, Millennium Management was holding 314,076 shares of Ford stock. Just nine months later, the fund’s 13F shows that 9,900,280 shares were purchased, which equates to an increase of 3,120%! Similar to Palantir, it should be noted that Millennium also holds put and call options on Ford Motor, which act as a hedge to its common-stock position.

Admittedly, the auto industry has been challenging for newcomers and stalwarts alike. The problem, as Ford and its shareholders have discovered, is that building an entirely new segment from the ground up to mass production — i.e., building out the infrastructure needed to mass-produce electric vehicles (EVs) — is costly. Ford’s Model e segment is losing a lot of money, which when coupled with warranty-related expenses for its entire fleet of vehicles has weighed on the company’s bottom line.

However, Englander’s conviction in Ford may have its merits.

For starters, Ford has demonstrated a willingness to pare back its EV spending until demand, and infrastructure, warrant an increase in production. Last year, management announced plans to curtail $12 billion in EV spending, which should allay any near-term spending concerns.

Let’s also address the elephant in the room: the company’s warranty expenses. Since Jim Farley took over as CEO in 2020, Ford’s manufacturing quality has demonstrably improved. In 2024, Ford moved toward the top of the list in J.D. Power’s Initial Quality Study. Ford should be nearing the end of higher-than-expected warranty costs, much of which originated prior to Farley taking over. Once these higher warranty expenses are put into the rearview mirror, Ford’s operating results should improve.

The other undeniable positive for Ford is the company’s unstoppable truck sales. The F-Series has been America’s top-selling truck for the last 47 years, and the top-selling vehicle (period!) for 42 consecutive years. Bigger vehicles, such as trucks and SUVs, generate juicier vehicle margins than smaller sedans. Ford being a leader in truck sales has played a key role in driving its operating cash flow and profits higher over time.

Sporting a 5.5% yield and valued at roughly 6 times forward-year earnings, Ford has the appearance of a bona fide bargain that can drive home meaningful gains for patient investors.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.

Billionaire Israel Englander Sold 96% of Millennium’s Stake in Artificial Intelligence (AI) Giant Palantir and Is Piling Into This Beloved Consumer Brand was originally published by The Motley Fool