Are AI stocks suddenly less appetizing than a burrito bowl? That’s the question buzzing on Wall Street after Ken Griffin, billionaire founder of Citadel, made a surprising portfolio shuffle: trimming nearly half of his stake in Palantir (PLTR) while boosting his holdings in Chipotle Mexican Grill (CMG) by a whopping 167%.
The move has investors scratching their heads. Why would one of the sharpest hedge fund managers in the game dial back on a high-flying AI darling and double down on a restaurant chain known for guacamole upcharges? Let’s break it down.
Palantir: Riding the AI Wave, But Pricey
Palantir has been one of the poster children of the AI revolution, with its stock riding a wave of enthusiasm for data analytics and machine learning applications. But here’s the rub: its forward P/E ratio and price-to-sales ratio are sky-high. Hedge funds like Citadel don’t just chase hype—they watch valuations like hawks.
So Griffin’s big sell-off doesn’t necessarily mean he’s bearish on AI. More likely, it’s a classic case of profit-taking. When a stock’s priced for perfection, even the most bullish investor knows it’s smart to lock in gains before the music stops.
Chipotle: From Soggy Salsa to a Potential Comeback
Now, about those burritos. Chipotle had its own drama after a 50-for-1 stock split in June 2024. The split initially sparked excitement, but the stock’s been on a roller coaster since. Management turnover and sluggish revenue growth left investors with indigestion, and the stock’s forward P/E ratio slid to a five-year low of around 33.
That’s where Griffin saw an opening. While most of Wall Street was focused on Chipotle’s stumbles, he seems to be betting that the worst is over. In hedge fund speak, this is called buying the dip—but in plain English, it’s like grabbing a burrito when it’s on the discount menu.
A Tale of Two Trades
Griffin's moves highlight a broader theme in today’s market: AI stocks are sizzling, but valuations are stretched, while some consumer names are quietly becoming bargains. By trimming Palantir and bulking up on Chipotle, Citadel is showing that even in the middle of an AI gold rush, fundamentals still matter.
It’s also a reminder that hedge funds don’t think in headlines. Selling Palantir isn’t a rejection of AI’s future—it’s a nod to the reality that no stock goes up forever. Buying Chipotle isn’t about burritos being tastier than algorithms—it’s about spotting value where others see volatility.
The Bottom Line
Ken Griffin’s portfolio shuffle is a masterclass in hedge fund pragmatism. AI may be the hottest story on Wall Street, but when valuations get frothy, even billionaires know it’s time to take some chips off the table. And when a household brand like Chipotle looks beaten down, that’s when savvy investors quietly load up.
So, are AI stocks less appealing than burritos? Maybe not. But in Griffin’s world, sometimes the smarter bet is to trade a little hype for a side of guac.