Is Palantir Technologies (PLTR) the Best Stock to Buy According to Jim Simons' Renaissance Technologies?

We recently published a list of 15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other best stocks to buy according to Jim Simons’ Renaissance Technologies.

Even after his passing in 2024, billionaire investor and mathematician Jim Simons remains known as the “Quant King” of hedge funds due to the extraordinary success of Renaissance Technologies, his quantitative trading firm based in New York. After years of researching the finance industry, Simons realized the untapped potential of employing quantitative analysis to capitalize on market inefficiencies. This insight led him to develop a data-driven investment strategy of analyzing market behavior solely using statistical and mathematical models. By identifying subtle, non-random patterns in financial data, the quant genius predicted future stock movements and generated impressive returns.

Although it is closed to outside investors, Jim Simons’ secretive Medallion hedge fund, a flagship of Renaissance, has produced ground-breaking results since its inception. The Medallion Fund raked in impressive returns of 56.6% and 74.6% during the early 2000s dot-com crash and the global financial crisis between 2007 and 2011. The fund has maintained a substantial annual return of 31.5% since its first two years of operation. At the time of his death, Simons was worth $31.4 billion, ranking him among the world’s wealthiest individuals, thanks to the strong market performance of the Medallion Fund and Renaissance.

READ ALSO: Billionaire David Einhorn’s 10 Stock Picks with Huge Upside Potential and Billionaire Michael Platt’s 10 Stock Picks with Huge Upside Potential.

Renaissance Technologies’ computer-driven powerhouse came off to a great start after a stellar performance in 2024. The Renaissance Institutional Diversified Alpha Fund has gained 9.05% as of February, continuing to build on its impressive 2024 return of 15.6%, which was its best since its inception in 2021. Meanwhile, the Renaissance Institutional Equities Fund has had its best start in over ten years, rising 11.85% in the first two months of 2025. Both funds are allowed to maintain sizable individual stock positions in addition to using stock index futures and options to help manage risk. However, the firm warns that it may be difficult to quickly unwind these sizable holdings without impacting market prices.

Our Methodology

For this list, we picked stocks from Renaissance Technologies’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Palantir Technologies Inc. (NASDAQ:PLTR)

Renaissance Technologies Q4 Stake: $1.72 billion

Number of Hedge Fund Holders: 64

Palantir Technologies Inc. (NASDAQ:PLTR) is a software and data analytics company that develops platforms for large corporations, financial institutions, and government organizations to analyze massive amounts of data. Its government sector serves customers from the US government and non-US government agencies, while the commercial segment oversees clients from various non-governmental industries.

On May 6, Cantor Fitzgerald raised its price target for Palantir Technologies Inc. (NASDAQ:PLTR) from $98 to $110 with a Neutral rating on the stock. This change follows Palantir’s first-quarter 2025 earnings, which beat the Visible Alpha consensus by 2.5%. The company attributed this outperformance to strong results in the U.S. commercial sector, where revenue surpassed projections by 10%, and overall government revenue, which was 5% higher than anticipated. However, Cantor Fitzgerald observed that the degree of revenue outperformance was lower compared to the prior quarter, despite the report’s positive aspects. Due to persistent challenges across Europe, international revenues, especially among the commercial sectors abroad, fell 16% short of projections.

Ithaka US Growth Strategy stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q1 2025 investor letter:

“From the front-lines of warzones to Fortune 500 enterprises, Palantir Technologies Inc. (NASDAQ:PLTR) builds software to address high-level action items, respond to defense and security concerns, and improve organizational efficiency. The company offers a number of software products from data analysis and curation (Palantir Gotham and Foundry) to a cloud-based operations software (Apollo). The company rose to popularity, in part, due to several government contracts (~55% of revenues) arising from recent and continuous global conflicts. In addition to creating generative AI defense solutions for governments across the globe, commercial customers (~45% of revenues) have flocked to the company’s security and data analysis solutions to monitor and analyze business data and protect sensitive information. The stock’s rise in the quarter was due to a strong earnings report that beat Street expectations as well as investor excitement with regard to the company’s ability to further monetize its AI product across its growing customer base.”

Overall, PLTR ranks 1st on our list of best stocks to buy according to Jim Simons’ Renaissance Technologies. While we acknowledge the potential for PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%.  If you are looking for an AI stock that is more promising than PLTR but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.