TLDR
- Two billionaire-led hedge funds sold Palantir positions and purchased Circle stock during the third quarter of 2025
- Circle shares declined 77% from summer highs to $69, returning to June IPO opening price levels
- Wall Street firms set Circle price targets ranging from $243 to $280, suggesting 250% to 305% upside
- Circle reported $740 million Q3 revenue and $214 million net income, surpassing analyst expectations
- Stablecoin market could expand from $310 billion to $4 trillion over the next decade according to analysts
Two prominent hedge funds made identical portfolio moves in the third quarter. Both sold large Palantir Technology positions and added Circle Internet Group shares. The timing coincided with Circle’s stock returning to its debut trading price.
Palantir Technologies Inc., PLTR
Israel Englander’s Millennium Management sold 4.6 million Palantir shares, slashing its holding by 91%. The fund purchased 500 Circle shares, growing that position by 3%. David Shaw’s D.E. Shaw & Co. unloaded 6.4 million Palantir shares, cutting its stake by 41%. The firm initiated a position with 33,100 Circle shares.
Neither hedge fund holds a substantial Circle position yet. However, the moves align with bullish Wall Street sentiment. Analysts believe Circle trades well below its fair value at the current $69 price point.
Citigroup analyst Peter Christiansen targets $243 per share. Canaccord Genuity’s Joseph Vafi forecasts $247 per share. Seaport Research’s Jeff Cantwell projects $280 per share, representing 305% potential upside.
Palantir Faces Valuation Pressure
Palantir trades at 102 times sales, making it the S&P 500’s most expensive stock. AppLovin holds the second-highest multiple at 32 times sales. The valuation gap has attracted short sellers including Michael Burry.
Burry allocated two-thirds of his $1.4 billion portfolio to Palantir put options. The investor gained fame for betting against subprime mortgages before the 2008 financial crisis.
Palantir delivered strong third-quarter results. Revenue climbed 63% to $1.1 billion, marking the ninth consecutive acceleration. Non-GAAP net income rose 110% to $0.21 per diluted share. Management increased full-year guidance to 53% revenue growth.
Despite these numbers, CEO Alex Karp has sold over $2 billion in stock over two years. The extreme valuation multiple leaves limited upside according to market observers.
Circle Posts Strong Earnings Despite Stock Decline
Circle closed at $69.72 on November 19, barely above its $69 IPO opening price from June. The stock reached $298.99 during the summer before dropping 77%. Shares traded at $66.38 on November 20.
The company exceeded third-quarter expectations. Revenue hit $740 million and net income reached $214 million. Management cautioned that lower Federal Reserve rates could pressure reserve returns.
Circle’s reserve yield dropped 96 basis points to 4.15% in Q3. The company holds reserves mainly in short-term U.S. Treasury bills. Lower interest rates directly impact these holdings.
Circle issues USDC and EURC stablecoins tied to the U.S. dollar and euro. USDC ranks as the second-largest stablecoin behind Tether. The combined tokens represent 25% of the $310 billion stablecoin market.
JPMorgan Chase analysts favor Circle over competitors. They cite transparent reserve management and regular audits as key advantages. USDC compliance with European MiCa regulations attracts institutional investors.
Market Growth Projections Support Long-Term Outlook
The stablecoin market could reach $2 trillion according to Seaport Research. Bernstein analysts project $4 trillion within ten years. This represents potential twelvefold growth from current levels.
Circle expects USDC circulation to increase 40% annually going forward. Wall Street forecasts 33% annual revenue growth through 2027. The stock trades at 6.5 times sales based on these projections.
Cathie Wood’s Ark Invest purchased $3.1 million in Circle shares this week. The firm also bought Coinbase and Bullish for crypto-focused portfolios. Some institutional investors view the price decline as a buying opportunity.
Circle’s June IPO raised $1.1 billion through 34 million shares. Strong demand pushed the offering above the initial $50 to $52 range. The company originally planned to sell 24 million shares. Shares opened at $69, up 124% from the $31 IPO price.
The company launched Circle Payments Network in May. The blockchain-based system enables faster and cheaper transactions. Twenty-nine financial institutions have enrolled with 500 more in the pipeline.
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