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GMO, an investment management company, released its year-end letter for 2025. A copy of the letter is available to download here. As a market-neutral strategy that seeks to exploit the significant disparity between the valuations of value and growth stocks, the strategy is satisfied with its long-term performance. The Strategy returned 15.8% gross (13.4% net) for 2025. Since its inception, it has achieved a cumulative gross return of 69.3% (50.6% net), without any substantial reduction in the valuation gap. This was fueled by strong stock selection efforts, supported by a proprietary valuation model, along with robust risk management practices. In addition, you can check the portfolio’s top 5 holdings to find out its best picks for 2025.
In its fourth-quarter 2025 investor letter, GMO highlighted Palantir Technologies Inc. (NASDAQ:PLTR). Palantir Technologies Inc. (NASDAQ:PLTR) is a software company that develops and deploys software platforms to help the intelligence community with counterterrorism investigations and operations. On March 31, 2026, Palantir Technologies Inc. (NASDAQ:PLTR) closed at $146.28 per share. One-month return of Palantir Technologies Inc. (NASDAQ:PLTR) was -4.51%, and its shares gained 67.27% over the past 52 weeks. Palantir Technologies Inc. (NASDAQ:PLTR) has a market capitalization of $349.854 billion.
GMO stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its fourth quarter 2025 investor letter:
“The other eight U.S. Information Technology stocks that we held short delivered an average performance of more than 63%. Palantir Technologies Inc. (NASDAQ:PLTR), which was the single biggest detractor from absolute returns at the total portfolio level, was up a spectacular 135% for the year and is, somewhat bewilderingly, trading at a price/sales ratio well in excess of 100. Indeed, one of the reasons we remain excited about the Equity Dislocation Strategy is that there are plenty of stocks that continue to surf a wave of speculative excess.”
Palantir Technologies Inc. (NASDAQ:PLTR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 89 hedge fund portfolios held Palantir Technologies Inc. (NASDAQ:PLTR) at the end of the fourth quarter, up from 81 in the previous quarter. While we acknowledge the potential of Palantir Technologies Inc. (NASDAQ:PLTR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.