You might not realize it, but one of the most important data releases of the entire quarter dropped on Aug. 14. While most investors have been enamored with earnings season, the quarterly filing of Form 13Fs can provide invaluable information on which stocks Wall Street's brightest money managers have been buying and selling.
The theme of the second quarter is that artificial intelligence (AI) stocks remain polarizing among billionaire money managers. Whereas five prominent billionaires dumped shares of Palantir Technologies (PLTR -1.80%) in the second quarter, other billionaire investors found an AI applications stock they couldn't stop buying: Google parent Alphabet (GOOGL -0.32%)(GOOG -0.36%).
Image source: Getty Images.
Palantir's outsize growth is overshadowed by its stratospheric valuation
Palantir has been absolutely crushing it since the start of 2023, with its shares rallying more than 2,600% as of Aug. 20, 2026. These gains didn't happen by accident. They reflect the company's seemingly impenetrable moat as an AI-driven software-as-a-service (SaaS) provider.
Palantir's Gotham is a SaaS platform used by the U.S. government and its allies to plan and oversee military missions. With minimal large-scale competition for lucrative long-term government contracts, Gotham is generating sustained double-digit growth and hearty profits for the company.
NASDAQ: PLTR
Key Data Points
Nevertheless, five billionaire asset managers dumped shares of Palantir Technologies during the second quarter, including:
- John Overdeck's and David Siegel's Two Sigma Investments
- Cliff Asness's AQR Capital Management
- Ken Griffin's Citadel Advisors
- Steven Cohen's Point72 Asset Management
While profit-taking is a logical reason for these billionaires to cash in their chips, it may not be the only reason.
Historically, no company at the forefront of a game-changing technology has sustained a price-to-sales (P/S) ratio above 30 for any extended period. Palantir entered the year at a P/S ratio north of 100, and it still sports a P/S ratio of 73 (as of Aug. 20). This stratospheric valuation likely isn't sustainable.
Image source: Getty Images.
Billionaire money managers can't stop buying Alphabet stock
On the other hand, Wall Street's savviest billionaire investors keep piling into Alphabet. The latest round of 13Fs shows four billionaires as buyers, including:
- Ken Fisher's Fisher Asset Management
- Dan Loeb's Third Point
- Stanley Druckenmiller's Duquesne Family Office
- Cliff Asness's AQR Capital Management
You could also include Berkshire Hathaway in this group, given that the now-retired Warren Buffett kick-started what's become the company's third-largest position in the latter half of 2025.
Alphabet's seemingly impenetrable advertising moat has long been its lure. Google accounts for more than 91% of worldwide internet search traffic, and Alphabet also owns YouTube, the second-most-visited site on the planet behind Google. It rightly garners exceptional ad pricing power and can take advantage of long-winded economic expansions.
$GOOG Alphabet Q2 FY26:
-- App Economy Insights (@EconomyApp) July 22, 2026
• Revenue +24% Y/Y to $119.8B ($2.8B beat).
• Operating margin 34% (+2pp Y/Y).
• $98B net gains from equity investments.
☁️ Google Cloud:
• Revenue +82% Y/Y to $24.8B
• Operating margin 36% (+15pp Y/Y).
▶️ YouTube ads +13% to $11.1B pic.twitter.com/seYlITzfg6
But it's Alphabet's AI ambitions that really have billionaires excited. Cloud infrastructure services platform, Google Cloud, was already sustaining double-digit annual sales growth before the AI revolution. Integrating generative AI and large language model solutions into Google Cloud has supercharged growth rates. High-margin revenue growth for Google Cloud reached 82% in the second quarter when compared to the previous year.
Prominent billionaire money managers appear to have chosen their preferred AI applications stock, and it isn't Palantir.
