Billionaire Hedge Funds Sell Palantir and Buy Circle Internet Stock

TLDR

• Billionaire hedge fund managers Israel Englander and David Shaw sold Palantir stock and bought Circle Internet Group shares in Q3 2025
• Wall Street analysts have set price targets for Circle between $243-$280 per share, suggesting up to 305% upside potential
• Circle’s stock dropped 77% from its summer peak of $299 to $69, returning to its IPO debut price
• Circle posted strong Q3 earnings with $740 million in revenue and $214 million in net income, beating Wall Street estimates
• Despite the price drop, investors like Cathie Wood’s Ark Invest purchased $3.1 million in Circle shares this week

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Two major hedge funds made identical trades in the third quarter of 2025. They sold large positions in Palantir Technologies and bought shares of Circle Internet Group. The moves came as Circle’s stock price fell back to its initial public offering levels.

Circle Internet Group, CRCL

Israel Englander’s Millennium Management sold 4.6 million shares of Palantir, cutting its position by 91%. The fund bought 500 shares of Circle, growing that stake by 3%. David Shaw’s D.E. Shaw & Co. sold 6.4 million shares of Palantir, reducing its holding by 41%. The fund also started a new position with 33,100 shares of Circle.

The hedge funds aren’t alone in their bearish view on Palantir. Michael Burry, known for betting against subprime mortgages before the 2008 crisis, took a large short position in Palantir. Two-thirds of his $1.4 billion portfolio consists of Palantir put options.

Palantir trades at 102 times sales, making it the most expensive stock in the S&P 500. The next closest company in the index is AppLovin at 32 times sales. Palantir CEO Alex Karp has accused short sellers of market manipulation, though he himself has sold more than $2 billion in stock over the past two years.

Circle’s stock closed at $69.72 on November 19, just above its $69 IPO opening price from June. This marked a 77% drop from its summer peak of $298.99. By November 20, the stock traded even lower at $66.38.

Wall Street Sees Major Upside in Circle

Despite the price decline, several Wall Street analysts believe Circle is undervalued. Peter Christiansen at Citigroup set a target price of $243 per share. Joseph Vafi at Canaccord Genuity set his target at $247 per share. Jeff Cantwell at Seaport Research gave the highest target of $280 per share, implying 305% upside from current levels.

Circle issues EURC and USDC, stablecoins tied to the European euro and U.S. dollar. USDC is the second largest stablecoin overall, with only Tether holding a larger market value. EURC and USDC together account for about 25% of the $310 billion stablecoin market.

JPMorgan Chase analysts say Circle has an advantage over competitors. They noted that USDC’s transparent reserve management and regular audits make it more trustworthy among institutional investors. Its compliance with European MiCa regulations sets it apart from other stablecoins.

Strong Earnings Despite Stock Decline

Circle posted strong third-quarter earnings with $740 million in revenue and $214 million in net income. Both figures beat Wall Street estimates. The company’s reserve yield dropped 96 basis points to 4.15% in the third quarter.

Management warned that lower Federal Reserve rates could pressure returns on Circle’s reserve holdings. These reserves consist mainly of short-term U.S. Treasury bills. The concern about shrinking interest income contributed to the stock sell-off.

Circle’s IPO in June raised $1.1 billion. The company sold 34 million shares, priced above the initial range of $50 to $52 due to strong demand. This was up from the originally planned 24 million shares. The company began trading on the New York Stock Exchange under the ticker CRCL.

Cathie Wood’s Ark Invest bought $3.1 million in Circle shares this week. The firm also purchased shares of Coinbase and Bullish for its crypto-focused ETFs. Jeff Cantwell at Seaport estimates the stablecoin market will eventually reach $2 trillion. Bernstein analysts predict the market will hit $4 trillion in the next decade.

Circle expects the volume of circulating USDC to increase by 40% annually going forward. Wall Street estimates revenue will grow at 33% annually through 2027. The current valuation of 6.5 times sales reflects this growth outlook.

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