Hyper-Growth Stocks Are Dumping—Time to Buy or Still a Crowded Trade?
$PLTR $APP $WMT
Hyper Growth pulls back led by Palantir and AppLovin:
I'm pretty sure most “long-term” investors are not freaking out about Palantir’s (PLTR) stock drop today after headline news about government defense cuts.* For someone who has owned Lockheed Martin (LMT), Raytheon Technologies (RTX), Northrop Grumman (NOC), and L3Harris (LHX) for many years, I sometimes kick myself for not owning PLTR as well because I’m confident in the continuation of defense spending—especially in names like Palantir. Palantir is likely the future of defense spending and geopolitical conflict management. Even though it’s insane, there’s a reason their market cap is larger than Lockheed Martins right now.
Forget the AI theme for one second, Palantir as a business is incredibly appealing on its own. Beyond the AI buzz, it’s a beautiful thing to see a company scale this fast. The financials have been extremely jaw dropping and Palantir has flipped the switch, proving it can generate real earnings while continuing to scale. And Palantir isn’t just a defense-military play, its software are in high demand across multiple industries and enterprises, from healthcare to finance, energy, and supply-chain logistics.
HOWEVER, that said, I still wouldn’t be interested in starting a position unless I felt like I was getting some kind of bargain in the name. And honestly, I’m not sure I’ll ever feel like I’m getting a bargain with this stock. That doesn’t mean it’s a bad investment idea—it just means I have to be disciplined about my entry price. It remains on my watchlist for now.
This same mindset applies to a few other high-growth, high-flying, expensive names I have my eye on—AppLovin (APP), Dutch Bros (BROS), CAVA (CAVA), Spotify (SPOT)—just to name a few. It’s very possible that you won’t feel like you’re getting a bargain or buying these names well below their intrinsic value anytime soon. I’m not saying they won’t drop to those levels, but I am saying: don’t bank on it.
I hope I’m making it clear that this is the mindset of a long-term investor—someone who wants a “fair” or low cost-basis in a stock and is willing to hold it for years, even when the business appears overvalued. One thing investing will teach you, is that you have to be extremely patient. You also may have missed it, and you need to accept that sometimes.
One last thing on Palantir, I had to blink twice. It’s around 1.5% of the QQQ already? This cute puppy has grown up very fast!
Crowded Trades and Swing Trading Temptations
I’m sorry to say, but these hyper-growth names that have already seen significant gains—like Hims & Hers (HIMS) or Palantir—feel like very crowded trades today. I’m no swing trader, but if I were, I STILL wouldn’t want to jump in on day one of a pullback on these names.
Why? Because sentiment shifts take time. Usually, when a stock pulls back hard, you need to see investors actually feeling pain—regretting they bought too high and kicking themselves for not selling earlier. That kind of shift doesn’t happen overnight.
If you’re a swing trader, you need to be twice right:
You have to know that the overall sentiment hasn’t turned bearish permanently.
You have to time your entry correctly.
On the other hand, if you’re a long-term investor, you really only need to be right once—you can wait for the moment when investors hate the stock, think the good days are over, and let the negativity settle in. That could take months or even a year.
If you’re truly investing for the long haul, short-term pullbacks on headline risks or exhausted momentum doesn’t really matter. Neither should influence your decision making if you’re committed to owning a business for many years.
So to wrap up this section on starting positions in hyper growth stocks:
You’re going to see extreme volatility, no matter what.
You don’t need to chase a stock just because one day it drops hard.
Walmart (WMT): A Retail Giant That Keeps Delivering
I’ve never owned Walmart (WMT) stock, and to be honest, I’ve never been a fan of brick-and-mortar, low-margin retailers. Part of that comes from my real-life job exposure to the industry, which has shaped my perspective over the years.
That being said, Walmart’s latest quarter—and the full-year performance—was undeniably impressive. While margins in this industry are typically razor-thin, the key takeaway is this: if you keep growing revenue, everything else “should” fall into place. Gross profit and operating income “should” naturally expand as long as top-line growth remains strong and management executes.
Even if Walmart’s margins don’t meaningfully increase, the company is still delivering results to shareholders year over year. And that’s what matters. Whether that leads to more buybacks, dividend increases, or further investments—I don’t know, because I don’t follow the stock that closely.
But if I were a Walmart investor today, I wouldn’t be overly concerned about lighter guidance for 2025. Instead, I’d be focused on the fact that Walmart is a clear winner in retail—one that continues to prove its dominance despite the broader challenges in the industry.
A Personal Note from Yesterday’s Animal Spirits Podcast
Switching gears a bit, like most weeks, I listen to the Animal Spirits podcast with
and Ben Carlson. Little did I know I’d be in tears halfway through the episode while walking my dog.Ben Carlson shared a deeply personal loss about his older brother Jon, and even though I’ve never met Ben or Michael—and probably never will—I felt their pain. We’re about the same age, have mostly the same interests (finance, stocks, sports), and after listening to them religiously over the years, they are like celebrities in my world.
So if Michael or Ben are hurting, I’m going to hurt too. And I just wanted to send Ben a note thanking him for the courage to share his story about his hero—his older brother.
Why am I bringing this up? Because we need reminders to keep life in perspective.
Today was a reminder that stocks flashing on a screen, portfolio gains, what Palantir stock is going to do next week or next year, and whether there will be a Strategic Bitcoin Reserve—none of that shit actually matters in the grand scheme of things.
Also, don’t let things you can’t control bother you.
However, the episode also taught us finance is still incredibly important. If you don’t have your finances in order—if you’re not in a position to support your family—you need to start tackling that today, not tomorrow. Don’t procrastinate when it comes to your finances or your family’s financial security.
That’s what I got out of today’s Animal Spirits podcast, and I’ll leave you with the link below in my references.*
Thanks for reading as always and let’s go USA Hockey!
*References:
https://www.cnbc.com/2025/02/19/palantir-shares-pentagon-cuts-trump.html
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. All opinions are my own, and I am not a financial advisor. The information provided reflects my personal views and is intended to encourage discussion and thought among readers. Investments involve risk, including the loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified professional before making any financial decisions.