ClearBridge Growth Strategy Highlights Palantir Technologies (PLTR) in Q4 2024 Investor Letter Amid AI Momentum

January 10, 2025 – ClearBridge Investments, a prominent investment management firm, recently released its Q4 2024 investor letter for the ClearBridge Growth Strategy. The report revealed that the firm’s growth-focused strategy slightly underperformed the Russell Mid Cap Growth Index during a market marked by momentum and stock-specific weaknesses. Despite this, Palantir Technologies Inc. (NASDAQ:PLTR) stood out as a key stock holding for the strategy.

Palantir’s Role in ClearBridge Growth Strategy

As part of its focus on high-growth sectors like artificial intelligence (AI), ClearBridge highlighted Palantir Technologies Inc., noting its importance in the strategy’s portfolio. Despite the stock experiencing a one-month return of -6.79%, Palantir demonstrated an impressive 309.05% increase in value over the past 52 weeks, closing on January 8, 2025, at $68.23 per share with a market capitalization of $155.4 billion.

The ClearBridge Growth Strategy took a calculated approach by taking profits from established holdings like Broadcom and redirecting those profits into AI-driven stocks, including Palantir and AppLovin. This strategy reflects the firm’s belief in AI’s transformative potential and its aim to maintain exposure to this rapidly growing sector.

Palantir Technologies: An AI-Driven Growth Stock

ClearBridge outlined Palantir Technologies as a key player in the AI-driven software industry. The company’s AI-powered operating system connects data to existing customer applications, improving business outcomes across both government and commercial markets. Palantir’s platform allows users to synthesize diverse data sources into actionable insights in real time, making it a crucial tool for organizations across various industries.

The company’s ability to achieve 80%+ gross margins while maintaining rapid growth at scale highlights its strong financial health and market position. Despite the stock’s elevated valuation, ClearBridge sees potential for Palantir Technologies to capitalize on the AI arms race, offering a multiyear tailwind that could drive continued growth.

AI Sector Outlook: The Future of Palantir Technologies

As a highly profitable company within the AI sector, Palantir Technologies is positioned for significant growth. ClearBridge highlighted that the growing demand for AI-driven solutions, such as those offered by Palantir, positions the company for future success. Given the company’s profitability, strong margins, and strategic position in AI, it is expected to benefit from ongoing advancements in the sector.

While Palantir is not among the 30 most popular stocks among hedge funds, it remains a favored pick in the AI space, with 43 hedge funds holding positions in the company at the end of Q3 2024. The firm’s solid growth trajectory and high valuation suggest that it will remain a pivotal player in the AI-driven technology sector for the foreseeable future.

The Growing Promise of AI Stocks

While Palantir Technologies has a strong foothold in the AI sector, ClearBridge Investments notes that AI stocks, in general, are poised for higher returns in the near term. This sentiment is shared by experts who have been bullish on AI-driven companies like Palantir and NVIDIA. As companies in the AI space continue to innovate and deliver transformative solutions, the demand for their products and services is expected to skyrocket, propelling stock growth in the coming years.

For investors looking for promising AI stocks, Palantir Technologies remains a standout name, with a proven track record of rapid growth, profitability, and industry leadership.