TLDR
- Millennium Management sold 91% of its Palantir stake while quadrupling its Tesla position in Q3 2025.
- Palantir trades at 110 times sales, making it three times more expensive than any other S&P 500 stock.
- Tesla’s EV deliveries fell 8.5% in 2025, largely due to Model Y refresh disruptions.
- Second-half annualized deliveries reached 1.83 million vehicles, suggesting 2026 growth is possible.
- Tesla’s focus on robotaxis and humanoid robots offers long-term growth potential beyond traditional EVs.
Israel Englander’s Millennium Management made a surprising move in Q3 2025. The hedge fund sold 4.5 million Palantir shares while adding 311,000 Tesla shares.
The trade raised eyebrows. Palantir crushed the market while Tesla struggled with declining EV sales. But Englander’s track record demands attention—Millennium beat the S&P 500 by 39 percentage points over three years.
Millennium slashed its Palantir stake by 91%. The AI software company had ranked among the fund’s top 10 holdings. Tesla’s position quadrupled despite the stock’s recent underperformance.
The Palantir Valuation Problem
Palantir’s business is booming. Q3 revenue jumped 63% to $1.1 billion. Customer count climbed 45% while spending per customer rose 34%.
The company leads in AI platforms according to Forrester Research. Non-GAAP net income surged 110% to $0.21 per diluted share. Management claims Palantir excels at moving AI projects from prototype to production.
But the valuation is extreme. Palantir trades at 110 times sales. That’s the highest in the S&P 500 by far.
The second-priciest stock, AppLovin, trades at just 38 times sales. Palantir could drop 65% and still be the most expensive stock in the index. Few software companies have ever sustained price-to-sales ratios above 100.
Tesla’s Challenging Year
Tesla’s 2025 was rough. Full-year EV deliveries fell 8.5%. The company lost roughly 5 percentage points of market share. Chinese automaker BYD now leads global electric car sales.
But the story has nuance. The Model Y refresh explains much of the decline. Production shifts and buyer anticipation for the new Juniper model hammered first-half deliveries.
Model 3 sales actually rose 17.6% in the first nine months of 2025 in the U.S. The problem was Model Y-specific, not company-wide. The Model Y accounts for over a quarter of U.S. EV sales.
Second-half performance improved. Annualized deliveries from that period hit 1.83 million vehicles. Wall Street consensus for 2026 sits at 1.75 million deliveries.
The Physical AI Opportunity
Tesla’s investment thesis has shifted beyond electric cars. The focus is now on robotaxis and humanoid robots—what the company calls physical AI.
Tesla’s camera-only approach provides cost advantages over competitors like Waymo. The company avoids expensive lidar and radar sensors. Its software doesn’t require high-definition city maps.
Tesla has 8 million vehicles on the road. The plan is letting owners add their cars to a crowdsourced robotaxi platform. That’s a massive existing fleet advantage.
CEO Elon Musk projects the Optimus humanoid robot could eventually generate $10 trillion in revenue. The robotaxi market is projected to grow 74% annually through 2030. The humanoid robot market should expand 54% annually through 2035.
Musk expects regulatory approvals for unsupervised robotaxis in 2026. Cybercab production is scheduled to start in April. European FSD approval in the Netherlands could arrive in early 2026.
The Juniper rollout is now complete globally. Tesla is selling newer, more affordable Model Y versions to compete on price.
