Wall Street’s Power Players Are Ditching Palantir Stock for Taiwan Semiconductor

Two of the most closely watched names in investing — Stanley Druckenmiller of Duquesne Family Office and Cathie Wood of Ark Invest — are making a very deliberate change up in their portfolios: they’re trimming their Palantir (PLTR) positions and redirecting capital into Taiwan Semiconductor (TSM).

Their trading patterns, disclosed in recent 13F filings, reveal a clear theme: take gains from a high-flying software stock and rotate into a chipmaker tied to the core of AI infrastructure.

Let’s break down what’s driving this move, and what it means.

Palantir: Profit-Taking after a Massive Run

Palantir Technologies (PLTR) has been one of 2025’s standout performers. PLTR stock has surged, driving its market cap to $312 billion and pushing its price-to-sales ratio near 100 — levels rarely sustained even by growth software firms.

That performance hasn’t gone unnoticed. Both Ark Invest and Duquesne have been reducing their exposure, despite Palantir being a top-five holding across Ark’s ETFs and delivering a strong earnings beat earlier this month.

In Ark’s case, some of the trimming was regulatory-driven — with capital gains large enough to trigger position-size limits. Yet what stands out is that sales continued even after those thresholds were met.

Meanwhile, Duquesne exited Palantir entirely last quarter, selling its remaining 41,710 shares. This isn’t the first time Druckenmiller has exited Palantir following a rally — he’s been in and out before.

Taken together, the activity suggests a commonly used investing strategy: realize gains during momentum spikes, especially when valuations appear stretched.

Taiwan Semiconductor: Buying the Dip on a Strategic Asset

Where is that capital going?

Into Taiwan Semiconductor Manufacturing Company (TSM) — the world’s largest and most advanced chip foundry. Druckenmiller increased his position by 457% in Q1, picking up 491,265 shares. Ark, too, has been building semiconductor exposure — adding TSMC to its roster alongside renewed buying in Nvidia and AMD.

Global tech giants are spending hundreds of billions on AI infrastructure — including GPUs, networking hardware, and server capacity. Projects like Stargate, a $500 billion AI build-out led by Oracle, OpenAI, and SoftBank, reinforce the long-term demand for advanced semiconductors. And while geopolitical risk (namely U.S.-China tensions) continues to hang over TSMC, its forward P/E of 21.3 suggests that much of that risk may already be priced in.

In short, institutional money sees an opportunity: a strategic asset with strong fundamentals, trading at a discount, right as the AI arms race accelerates.

What the Rotation Suggests

When high-profile investors start offloading a soaring stock and reallocate into a compressed one, it’s less about the story and more about timing.

Palantir may still have long-term potential — but its valuation now reflects a lot of that optimism. Taiwan Semi, on the other hand, sits at the heart of the AI supply chain, yet is trading at what Wall Street views as a discount.

The message from Druckenmiller and Wood’s portfolios is this: Bank the profits on the momentum names, and move capital into the picks and shovels powering the AI race.

Analyst Ratings Reveal a Confidence Gap Between PLTR and TSM

Investors can compare both stocks side-by-side on the TipRanks Stocks Comparison Tool. According to data, Palantir currently carries a Hold rating from Wall Street analysts — and that rating comes with a sharp edge. The average PLTR price target sits at $100.13, which implies a 23.81% downside from current levels. That’s a red flag in analyst speak: it suggests the stock may be overheated or overhyped, at least by traditional valuation metrics.

It’s not just about sentiment either. Palantir’s P/E ratio is a sky-high 575, far above any reasonable tech sector benchmark. This is a company priced for extreme growth — and with that comes volatility and expectations that are hard to live up to. Despite its $311 billion market cap, it’s being treated cautiously by the Street, reflected in a modest Smart Score of 5.

Now compare that with Taiwan Semiconductor (TSMC). Analysts give it a Strong Buy rating and a price target of $223, suggesting nearly 14% upside. The contrast is sharp. TSM’s P/E sits at 25, a fraction of Palantir’s, despite its enormous $818 billion market cap and global dominance in chip production. It also returns some capital to shareholders, offering a 1% dividend yield, while Palantir offers none.

In essence, the numbers paint a clear narrative. Palantir is a high-conviction growth bet, rich in vision but light on near-term earnings power. TSM, meanwhile, looks like a strong institutional anchor — lower risk, steady upside, and a firm foothold in a sector that powers everything from AI to iPhones.