Ken Griffin's Strategic AI Investment Play: Inside Citadel's Bet on Palantir and Robinhood

One of Wall Street’s most successful investors has quietly made a significant move into the artificial intelligence sector. Ken Griffin, the billionaire founder of Citadel Advisors—historically the most profitable hedge fund based on net gains—deployed capital into two of the year’s most talked-about AI plays during the third quarter. This move offers a rare glimpse into how elite portfolio managers view the current tech landscape and where they see growth potential in the AI revolution.

Citadel’s specific moves tell an interesting story. The hedge fund acquired 388,000 shares of Palantir Technologies and 128,100 shares of Robinhood Markets. What makes these positions noteworthy isn’t just the pedigree of the buyer, but the dramatic performance trajectory of these stocks. Palantir has surged 2,200% since the start of 2023, while Robinhood has climbed 1,100% over the same period. Yet Ken Griffin’s decision to invest in stocks that have already multiplied so dramatically sends a clear message: explosive past returns don’t necessarily disqualify a company from being a prudent investment today.

Palantir Technologies: The AI Platform Leader with a Valuation Puzzle

Palantir operates at the intersection of data and artificial intelligence, providing sophisticated analytics software to enterprises and government agencies worldwide. The company’s core infrastructure—platforms called Gotham and Foundry—allows organizations to integrate machine learning models into decision-making frameworks. Beyond its foundational products, Palantir has built an adjacent AI platform that enables clients to embed generative AI capabilities directly into their business applications and workflows.

The market’s perception of Palantir as an AI leader continues to strengthen. Morgan Stanley’s research team recently highlighted Palantir as a frontrunner in enterprise AI adoption. Separately, Forrester Research ranked the company as a leader in AI decisioning platforms, while the International Data Corporation recognized Palantir’s dominance in AI-enabled supply chain optimization solutions. These endorsements from independent research firms validate the company’s technical positioning.

Financially, Palantir delivered impressive third-quarter results that exceeded Wall Street expectations. Revenue expanded 63% year-over-year to reach $1.1 billion—marking the ninth consecutive quarter of accelerating growth. Adjusted net income per diluted share surged 110% to $0.21. Management’s optimism about future prospects was evident in their full-year guidance raise, projecting 53% revenue growth for 2025. These figures demonstrate real momentum in the business.

However, the investment thesis for Palantir presents a complex risk-reward profile. The company trades at a price-to-sales multiple of 96 times—an extraordinarily steep valuation. While this has moderated from an August 2025 peak of 137 times sales, it still positions Palantir as nearly three times more expensive than the next priciest company in the S&P 500 (AppLovin at 33 times sales). The mathematical implication is sobering: Palantir could experience a 65% decline and still retain the distinction of being the index’s most expensive stock.

The underlying growth narrative deserves consideration. Research firm Grand View Research projects that AI platform spending will expand at a 38% annual rate through 2033—a tailwind that justifies premium valuations for category leaders. Yet the current price reflects significant optimism already baked in. Ken Griffin’s position, while strategically sound from a market exposure perspective, carries concentration risk that sophisticated investors must monitor carefully.

Robinhood Markets: Winning the Generational Wealth Transfer

Robinhood operates a mobile-first trading platform engineered for younger demographics. The company has attracted 19 million funded accounts, predominantly from millennial and Gen Z investors—nearly double the user base of its closest competitor. This demographic advantage positions Robinhood to capture a portion of what some analysts call the greatest wealth transfer in history: over $120 trillion expected to flow from baby boomers to younger generations in coming decades. This generational wealth shift is already translating into measurable market share gains.

While Robinhood remains a relatively small player in the broader brokerage industry, the company is steadily gaining ground across multiple trading categories: equities, fixed income, options, and margin trading all show expansion. Perhaps most tellingly, Robinhood’s recent foray into prediction markets has proven remarkably successful, with the platform capturing approximately 30% market share in just over a year—a striking result for a category entry.

Robinhood’s artificial intelligence strategy centers on a product called Cortex, a conversational AI assistant designed to demystify financial markets for retail investors. The tool uses generative AI to synthesize breaking news, analyst research, and technical analysis into digestible summaries. The company recently layered personalized insights onto this foundation, connecting real-time market data to individual user portfolios. Cortex is currently offered as a premium feature to Gold subscribers (either $5 monthly or $50 annually), creating a potential recurring revenue stream.

The company’s financial performance in the third quarter validated this growth strategy. Funded accounts, platform assets, and net new deposits all reached record levels. Revenue doubled to $1.2 billion while GAAP net income more than tripled to $0.61 per share—a productivity gain that impressed investors. CEO Vladimir Tenev emphasized the outsized momentum in prediction markets, noting that trading volume has doubled each quarter since the feature’s late-2024 launch. This acceleration suggests Robinhood has tapped into genuine user demand rather than a temporary novelty.

From a valuation perspective, Robinhood presents a different profile than Palantir. The stock trades at 42 times forward earnings while the Street expects earnings to compound at 22% annually over the next three years. This makes Robinhood appear reasonably valued relative to its expected growth rate—a contrast to the premium-laden Palantir.

What Ken Griffin’s Portfolio Moves Reveal About AI Investing

Ken Griffin’s dual investment in these AI-focused companies illustrates an important principle for equity investors: historical performance and current attractiveness aren’t mutually exclusive. Both stocks have delivered extraordinary returns from their 2023 lows, yet they each contain elements worth evaluating in the present moment.

The Palantir position reflects confidence in enterprise AI’s long-term trajectory, even at elevated valuations. The Robinhood position captures exposure to applied AI in financial services, paired with a more balanced growth-to-valuation ratio. Together, they suggest that Ken Griffin and Citadel see the AI megatrend as persistent enough to justify measured exposure, even as they exercise selective discipline about which AI stories to back and at what price.

For individual investors, the lesson is nuanced: growing companies trading at stretched valuations can still merit investment consideration, but position sizing and risk management become paramount. The fact that a legendary investor like Ken Griffin is comfortable with these positions doesn’t eliminate the need for personal diligence and appropriate portfolio positioning.