In October 2020, Laurence Cohen made a trade that no financial adviser would ever endorse. He decided to invest every penny of his life savings into over 10,000 shares of the data-analytics company Palantir Technologies Inc., which had just debuted on the New York Stock Exchange for $10 apiece. 

“If I was wrong about Palantir, I would have nothing right now,” Cohen, a 42-year-old business owner who lives in London, told MarketWatch. Cohen’s initial investment has ballooned to around $2.2 million today as shares of Palantir have skyrocketed over 1,600% since their listing on the public market.

Manish Kapoor, a 54-year-old IT worker in Wisconsin, took a similar leap of faith, taking out a quarter-million-dollar home-equity loan and putting it all into shares of Palantir last November. The $250,000 quickly turned into $350,000 as shares of Palantir soared after an earnings beat. Kapoor then converted his entire position into call options, paying upfront premiums for the right to buy the stock at a fixed price. It was a risky move that could have resulted in his contracts expiring worthless if Palantir’s stock fell. But as Palantir’s stock rose, so did the value of his contracts. Kapoor periodically sold his contracts back into the market and reinvested the proceeds into more batches of call options, often making big bets on the stock’s rise around earnings calls. In early August, Kapoor’s Palantir position reached a peak of $13.5 million.

The ascent hasn’t been for the faint of heart. Although Palantir is the seventh-best-performing stock in the S&P 500 this year, its volatility has been on full display in recent weeks amid a widespread selloff among artificial-intelligence names. Palantir, which sells enterprise software to consolidate disparate data stores, has received criticism both on and off Wall Street for its business. Shares of Palantir have tumbled over 20% from their recent peak since a13F filingrevealed Michael Burry’s Scion Asset Management heldbearish put optionson 5 million shares.

If GameStop is a meme stock and Nvidia is the stock-market bellwether, Palantir resembles something of a cult to shareholders, comparable only to the bets investors have made on Elon Musk and Tesla Inc.. Kapoor and Cohen are just two successful Palantir investors among a massive retail movement. They both shared their trading records for MarketWatch to review.

Communities of dedicated Palantir shareholders populate the internet across X, Reddit, Discord and YouTube, posting constant updates on company news and memes. They diligently tune in to earnings calls and company filings, and devour every piece of content featuring Chief Executive Alex Karp. They buy official Palantir swag, with the company’s merchandise drops often selling out within 20 minutes of launch, 28-year-old accountant and Palantir investor Brett Krieger told MarketWatch.

To loyal Palantir investors, the recent drawdown is an early Christmas present — an opportunity to buy the stock at a discount and prove the doubters wrong. Krieger, who posts daily Palantir updates on his X account, added 50 shares to his Palantir position last week, worth almost $7,500 at the time. Palantir comprises roughly 40% of his entire stock portfolio.

“I’m not concerned,” Krieger said of the recent selloff and the overall AI trade. To him, Palantir and Nvidia represent “the future of AI.” 

Etienne Breton, a 47-year-old mechanical engineer based in Quebec, made an even bigger bet, buying 1,000 shares of Palantir last week. Breton has been a Palantir investor since 2021, when he sold his real-estate holdings and put almost everything he owned into the stock. He currently holds around 14,000 shares of Palantir, a position worth over $2.2 million, and sells covered calls against his underlying shares to generate additional income, according to documents viewed by MarketWatch.

In Breton’s opinion, Palantir is the best-positioned company to survive a potential AI bubble due to the benefit that its software provides its customers. He’s concerned about the rising trend of Big Tech companies raising debt to fund their AI plans. 

“Palantir is the only company that really creates value,” Breton told MarketWatch. “Nvidia creates value, but I don’t see proof yet that their customers will.” 

The cult of Alex Karp

How did a B2B SaaS company gain such a devoted fanbase? Palantir’s origin story and unconventional CEO offer clues. 

Named after the “seeing stones” in “The Lord of the Rings” trilogy, Palantir was founded by Silicon Valley venture capitalist Peter Thiel and Karp in 2003 to build technology that could enhance national security following the 9/11 terrorist attacks. Thiel had co-founded PayPal, invested early in Facebook and became known for a unique brand of libertarianism. Karp’s track record included a PhD in neoclassical social theory from Goethe University Frankfurt. 

At the core of Palantir’s products is its Ontology technology, which stitches an organization’s scattered data together to create a virtual replica of its real-world operations. The initial decision by engineer Breton to invest in Palantir came as a result of his job as a technical expert at a manufacturing company, where he often dealt with unorganized and siloed data. To him, Palantir offered the perfect solution to everyday issues he encountered at work.

“The Wall Street analysts didn’t know that,” Breton told MarketWatch. “My job gave me the guts to go all-in.”

Early seed funding from the CIA’s venture capital arm IN-Q-Tel solidified Palantir’s focus on intelligence and defense. Rumors that Palantir’s technology had played a role in locating Osama bin Laden were what first led business-owner Cohen to look into the company in 2015, years before Palantir became a public company. To this day, Palantir has neither confirmed nor denied its involvement. 

The company’s government contracts, combined with Karp’s unfiltered personality, has made Palantir a pariah among some in liberal-leaning Silicon Valley — a status that Palantir fans have wholeheartedly embraced. Just weeks before the company went public in 2020, Palantir moved its headquarters from Palo Alto, Calif., to Denver. In the company’s earnings call earlier this month, Karp declared Palantir the first “completely anti-woke” company. 

“For early retail investors, investing in Palantir felt like we were fighting back against this oppressive, totalitarian push that we were seeing, especially during the pandemic,” Cohen said. “You’ve got a CEO who is just completely honest and transparent with his thoughts.” 

Palantir’s direct public offering — meaning that the company sold its stock straight to the public without a Wall Street middleman underwriter — is a particular source of pride for Karp. 

Karp’s affinity for German philosophy permeates his mannerisms. A direct public offering “is a way of offering the means of production to the worker,” Karp told MarketWatch earlier this month. “Every other person, every other company, basically with notable exceptions, essentially does a deal with the bank, which means rich people get richer. We brought the instruments of venture capital to the working class of America.” 

Outsmarting Wall Street

For many of Palantir’s retail investors, Burry’s short and the recent drawdown isn’t their first instance of combating Wall Street’s negative sentiment.

While shares of Palantir initially rose as high as $39 in the months after the public offering, they dropped to an all-time low of $6 in late 2022. Instead of panicking, Cohen began adamantly advocating that his parents put their retirement savings into the stock.

“They really didn’t have much in their savings. It was a problem,” Cohen said of his parents. At the time, his father was making a living as a taxi driver. “I called a family meeting, I took out a whiteboard, and pitched them the background of Peter Thiel and Alex Karp,” Cohen added.  Eventually, Cohen said he convinced his parents to invest their five-figure life savings into Palantir.

Palantir bears see the stock’s valuation — trading at 171x forward earnings, according to FactSet data — as a sign of irrational exuberance. The multiple suggests Palantir is one of the most expensive big stocks ever.

“Everyone is aware of the rich premium,” Krieger said of Palantir’s valuation. “I’ve never considered it an issue.” To Krieger and Palantir loyalists, the company’s technology is something truly unprecedented in today’s world.

The dedication and fanaticism of Palantir investors may indicate a high element of risk to outsiders, but it has translated into life-changing money for some. Cohen’s parents’ investment has risen to well over $1 million in value and allowed them to retire. Breton is planning on retiring next year thanks to his Palantir position. 

Today, both Kapoor and Cohen have diversified their portfolios to include holdings other than Palantir, but they’re eagerly waiting for the opportunity to buy more shares if the stock continues to fall. Kapoor plans to re-establish his original position “once technical analysis confirms a definitive market bottom in the current bearish environment,” he said.

Palantir’s shareholders “didn’t listen to some highly-paid expert who told them Palantir would not succeed,” Karp told MarketWatch. “They listened to their own vocational training and their own talents, and they put their own money into Palantir.”