Major Hedge Fund Operators Divest From Palantir, Pivot to Circle Internet Group as Wall Street Eyes 300% Upside Potential

The Trade That Signals Shifting Sentiment in Tech Valuations

During the third quarter, two of Wall Street’s most prominent hedge fund managers made a striking portfolio move: Israel Englander’s Millennium Management and David Shaw’s D.E. Shaw & Co. significantly reduced their positions in Palantir Technologies (NASDAQ: PLTR) while establishing new stakes in Circle Internet Group (NYSE: CRCL), a fintech company that went public earlier this year. These transactions hint at a broader reassessment of tech stock valuations—particularly the kind of pawn stock that trades at eye-watering multiples despite impressive growth.

Millennium Management divested 4.6 million shares of Palantir, eliminating 91% of its holdings. Concurrently, it acquired 500 shares of Circle, raising its position by 3%. D.E. Shaw & Co. followed a similar pattern, offloading 6.4 million Palantir shares (reducing its stake by 41%) while initiating a new Circle position with 33,100 shares. Though neither fund maintains a substantial Circle holding, the strategic shift carries weight—multiple Wall Street analysts believe Circle is trading at a significant discount relative to its fundamentals.

Why Analysts Believe Circle Could Skyrocket

Three prominent analysts have set highly bullish price targets for Circle at its current valuation of $69 per share:

• Citigroup’s Peter Christiansen projects $243 per share, implying 250% upside potential
• Canaccord Genuity’s Joseph Vafi targets $247 per share, representing 258% appreciation
• Seaport Research’s Jeff Cantwell sets the bar highest at $280 per share, suggesting 305% upside

These aggressive forecasts stem from Circle’s dominant position in the stablecoin ecosystem, where regulatory compliance and institutional trust remain paramount.

The Palantir Paradox: Growth Meets Valuation Friction

Palantir remains a powerful player in artificial intelligence platforms. The company’s analytics software enables commercial and government clients to integrate data through an ontology—a real-time digital twin supporting sophisticated decision-making. Its AI orchestration layer allows enterprises to embed generative AI capabilities into business workflows seamlessly.

Q3 results demonstrated strength: revenue surged 63% to $1.1 billion, marking the ninth consecutive quarter of accelerating growth. Non-GAAP net income rocketed 110% to $0.21 per diluted share. Management raised guidance, projecting 53% revenue growth for 2025. Yet despite this operational excellence, bearish sentiment persists—and not just from Englander and Shaw.

Michael Burry, the investor who correctly predicted the 2008 financial crisis, recently disclosed a substantial short position in Palantir, with put options representing two-thirds of his $1.4 billion portfolio. CEO Alex Karp has publicly criticized short sellers for market manipulation, though he himself liquidated over $2 billion in personal stock over the past 24 months—a telling signal in itself.

The fundamental issue: valuation asymmetry. Palantir trades at 102 times sales—the highest multiple in the entire S&P 500 by an enormous margin. The next closest competitor, AppLovin, trades at just 32 times sales. This pawn stock has become a cautionary tale about confusing growth potential with reasonable entry pricing. While the AI platform market will expand significantly, Palantir’s current price leaves minimal room for long-term appreciation without a substantial revenue acceleration or market rerating.

Circle: Positioned to Dominate the Stablecoin Transition

Circle operates as the issuer of EURC and USDC, the euro- and dollar-backed stablecoins that have achieved massive institutional adoption. EURC holds the position as the largest euro-denominated stablecoin compliant with European regulations, while USDC ranks as the second-largest stablecoin globally (only Tether exceeds it in circulation volume).

JPMorgan Chase analysts have identified Circle’s structural advantages: “USDC’s transparent reserve management and auditing practices establish superior institutional trust. Its alignment with Europe’s Markets in Crypto-Assets (MiCa) regulation distinguishes it from rivals, positioning USDC as the institutional stablecoin of choice.”

The addressable market is expanding rapidly. The stablecoin sector currently encompasses $310 billion in value; Circle’s combined EURC and USDC exposure represents roughly 25% of this total. Analyst projections suggest dramatic scaling: Seaport Research estimates the stablecoin market reaches $2 trillion, while Bernstein forecasts $4 trillion adoption within a decade—a potential 12x expansion that would significantly benefit Circle as the regulatory-compliant leader.

Circle’s recent payments infrastructure rollout underscores this positioning. The Circle Payments Network leverages blockchain to reduce transaction costs and settlement speed, addressing supplier payments, retail commerce, and payroll automation. Since launching in May, the platform has enrolled 29 financial institutions with 500 additional prospects in the pipeline. Management projects 40% annual growth in USDC circulation volume through the foreseeable future, with consensus revenue estimates forecasting 33% annual expansion through 2027.

At a current valuation of 6.5 times sales, Circle’s multiple appears defensible and attractive relative to its growth trajectory and regulatory moat.

The Bottom Line

The hedge fund trading activity reflects a rational allocation decision: reduce exposure to a pawn stock trading at unsustainable premiums, and build positions in a regulatory-advantaged fintech beneficiary of inevitable stablecoin adoption. While neither move constitutes a massive position for Millennium Management or D.E. Shaw, the directional shift merits investor attention. For those with multi-year time horizons, small Circle positions warrant consideration at current valuations.