Palantir or Archer Aviation: Cathie Wood Cuts One Top Growth Stock and Doubles Down on Another

AI and eVTOL aircraft are two futuristic segments that have been grabbing plenty of headlines recently. AI’s impact has been far more immediate, helping fuel the current bull market while already reshaping industries through tangible gains in productivity and cost efficiency. eVTOL aircraft, by contrast, remain at an earlier stage of development, but interest is building around their potential to reshape urban transportation over time.

It’s no wonder, then, that Cathie Wood has been showing a keen interest in both. The ARK CEO is famously forward-thinking and has often been signing the praises of cutting-edge industries before they become mainstream concerns.

Within Wood’s portfolio sit two distinctly different growth stories. Palantir (NASDAQ:PLTR) has emerged as a high-growth AI software name, leveraging its platforms to drive rapid revenue expansion as enterprises and governments ramp up spending on artificial intelligence. Archer Aviation (NYSE:ACHR), meanwhile, represents a more early-stage growth bet, aiming to scale a new market altogether with electric vertical take-off and landing aircraft designed to transform urban mobility. Yet, recent filings show Wood trimming her exposure to one of these growth names while doubling down on the other.

So, let’s see why one of these stocks appears to be more appealing to Wood right now – and, with some help from the TipRanks database, whether the Street’s analysts take a similar stance.

Palantir

Few, if any, stocks better capture the market’s fascination with AI than Palantir, whose shares have climbed 2,440% over the past three years. The company’s roots lie in building data integration and analytics software for government agencies, with platforms designed to handle complex, sensitive, large-scale data sets in mission-critical environments. Over time, Palantir also expanded into commercial markets, adapting those same tools for enterprise customers.

But the big bang for the stock happened with the April 2023 release of its Artificial Intelligence Platform (AIP), its flagship product that helps organizations deploy and manage AI systems using their own data, with a focus on security, governance, and practical applications. It has become the core of Palantir’s business, driving new customer wins and larger contracts as companies look for ways to implement AI while maintaining control.

Since then, the company has witnessed a phenomenal growth spurt, one that is still at play, as was evident in the most recent quarterly readout. In 3Q25, revenue reached $1.18 billion, up 62.6% year-over-year and $90 million above expectations. Adj. EPS came in at $0.21, surpassing the forecast by $0.04. Looking ahead, the company called for Q4 revenue between $1.327 billion and $1.331 billion, well above analysts’ $1.18 billion estimate.

So, where is the negative in all this? Well, alongside the real-world growth, the stock has gone on a magnificent run, one that many market observers believe has made the valuation untenable.

Maybe that issue has been nagging at Wood, as over the past month and a half – between November 25 and January 8 – she sold $76.9 million worth of PLTR shares through her ARKK, ARKW, and ARKQ ETFs.

Jefferies’ Brent Thill echoes that skepticism. While the analyst acknowledges that Palantir has built a powerful platform and is executing well operationally, he argues that at today’s valuation, the numbers simply do not add up.

“The company has now posted nine consecutive quarters of accelerating revenue, driven by strong AIP adoption in commercial and a rebound in government,” the 5-star analyst said. “While we remain fundamentally constructive and view PLTR’s AI/tech stack as unique with meaningful opportunity in a large, underpenetrated TAM, history suggests that the current valuation is difficult to sustain. At these levels, we believe the risk-reward is skewed negatively as any incremental signs of a slowdown can significantly contract the multiple.”

Bottom line, Thill rates PLTR stock an Underperform (i.e., Sell), while his $70 price target suggests it is overvalued by ~60%. (To watch Thill’s track record, click here)

1 other analyst is also a PLTR bear, yet with an additional 11 Holds and 4 Buys, the stock claims a Hold (i.e., Neutral) consensus rating. At $190.06, the average price target points to 12-month returns of 7%. (See PLTR stock forecast)

Archer Aviation

Cathie Wood is known for making some wild predictions, but the idea of flying taxis becoming part of urban transportation is no longer as far-fetched as it once sounded. Archer Aviation is certainly betting on that future. The company is one of the leading players in the eVTOL (electric vertical take-off and landing) aircraft space, developing aircraft designed for short-distance urban air mobility.

Archer is still in the process of certifying its Midnight aircraft, a lengthy and complicated process. Since FAA approval is not yet complete, eVTOLs cannot operate commercially in the U.S., and with this in mind, the company has put in place a “Launch Edition” program, which targets international customers ahead of FAA certification. Abu Dhabi Aviation is slated to be its first customer, and the company has already delivered its initial Midnight aircraft to the UAE under its agreements with Abu Dhabi Aviation and the Abu Dhabi Investment Office.

Archer has also formed some eye-catching partnerships. It has the backing of Stellantis and is working closely with United Airlines to integrate its aircraft into future urban air mobility networks. Additionally, Archer boasts a partnership with Anduril to develop hybrid VTOL aircraft for military applications. Moreover, the company has nabbed itself the role of exclusive air taxi provider for the LA28 Olympics; establishing a presence in Los Angeles’ urban air mobility network, Archer acquired Hawthorne Airport in November, which will serve as a fully equipped hub for takeoffs and landings. Underpinning it all, the company boasts a cash balance of over $2 billion.

So, plenty is going on in the ACHR universe, all of which seems to have impressed the innovation-focused Wood. Between November 20 and January 8, Wood bought $11.6 million worth of ACHR shares via her ARKK and ARKX ETFs.

The growing infrastructure footprint is also resonating with H.C. Wainwright analyst Amit Dayal, who believes the Hawthorne Airport acquisition in particular stands out as a meaningful strategic step, reinforcing Archer’s push to move from concept to real-world operations.

“We believe the LA airport acquisition is supportive to the company’s commitments to the Olympics, important in establishing a large presence in a key U.S. market for eVTOLs and could be leveraged in multiple ways to continue aircraft development and commercialization,” the analyst explained. “Management emphasized that this was a unique opportunity, and it does not intend to pursue any additional deals of a similar nature, so we believe the bolstered balance sheet will not be burdened by these types of transactions going forward. We believe the balance sheet strength lends itself to dealing with partners, customers, and other stakeholders who may seek liquidity-related comfort before entering large, long-term agreements or contracts, especially on the defense front.”

To this end, Dayal rates ACHR shares a Buy, while his Street-high $18 price target points toward 12-month returns of a hefty 104%. (To watch Dayal’s track record, click here)

The Street’s average price target is a more modest $12.40, although that figure factors in a one-year gain of ~41%. All told, based on a mix of 4 Buys and 2 Holds, the analyst consensus rates the stock a Moderate Buy. (See ACHR stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.