Palantir Technologies (NASDAQ: PLTR) has had an unbelievable run in 2024. The firm has turn into one of the talked about platforms fueling the factitious intelligence (AI) narrative, shares of the inventory have gained greater than 300% this 12 months alone, and it is turn into a member of the S&P 500 index.
But with only a few weeks left within the 12 months, Palantir might need one final massive milestone achievement up its sleeve. Below, I’m going to clarify why Dec. 13 is a crucial date for Palantir buyers. Let’s break down what buyers must be looking out for and assess if the inventory is an efficient purchase proper now.
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This 12 months, Dec. 13 falls on a Friday. And whereas Friday the thirteenth is often affiliated with unhealthy luck or superstition, Palantir buyers could have some extra excellent news headed their method.
Next Friday, the Nasdaq-100 index goes to be reconstituted. This signifies that a brand new collection of firms will likely be added to the coveted index, changing shares which have fallen out of eligibility.
This is essential, as a result of the Nasdaq-100 is mostly affiliated progress shares and profitable alternatives past the S&P 500.
On Sept. 6, Palantir introduced that it had formally earned entry into the S&P 500. Since the date of that announcement, shares of Palantir have soared by 138% as of market shut on Dec. 5.
Just a few months later, Palantir introduced that it was altering the inventory trade on which it trades — shifting from the New York Stock Exchange (NYSE) to the Nasdaq.
Since becoming a member of the Nasdaq on Nov. 26, shares of Palantir have gained about 10% (as of market shut Dec. 5). That’s a reasonably dramatic transfer in solely seven buying and selling days.
In the press launch concerning this announcement, administration expressed that “upon transferring, Palantir anticipates assembly the eligibility necessities of the Nasdaq-100 Index.”
While historical past isn’t any assure of future outcomes, the inventory’s efficiency following its entry into the S&P 500 and its transition to the Nasdaq function a good proxy for what buyers may anticipate ought to the corporate earn a spot on the Nasdaq-100 on Dec. 13.
I believe there’s a good likelihood Palantir will likely be added to the Nasdaq-100 subsequent week and, ought to that happen, I’d be shocked if the inventory would not transfer even increased. But whereas changing into a member of the Nasdaq-100 is a good milestone, such an achievement alone doesn’t make Palantir inventory a purchase.
Instead, buyers ought to take a look at a mix of the corporate’s progress outlook, Wall Street’s tackle the corporate’s trajectory, and valuation.
As far as Palantir’s outlook and Wall Street’s opinion are involved, the corporate seems nicely on its technique to proceed accelerating its high line whereas rising margins and minting increased income over the following a number of years.
The main catalyst fueling this progress is Palantir’s Artificial Intelligence Platform (AIP), which has turn into a game-changing product improvement for the corporate over the past couple of years. As such, a few of Wall Street’s most revered analysts together with Dan Ives of Wedbush Securities and Mariana Pérez Mora of Bank of America stay bullish on the inventory.
The solely actual concern I’ve surrounding an funding in Palantir at its present worth comes all the way down to valuation. To put it bluntly, a price-to-sales (P/S) a number of of 63.5 and a ahead price-to-earnings (P/E) ratio of 149 should not even near affordable.
In my eyes, the inventory has run up a lot that it is due for a pullback sooner fairly than later. But with that mentioned, I see any potential sell-off as one which will likely be short-lived, as it should in all probability be pushed by buyers taking income versus panic-induced promoting ought to Palantir face some type of disaster — which, as of now, would not look seemingly.
While the prospects of inclusion on the Nasdaq-100 is thrilling, it is actually simply one other potential milestone in what I see as a protracted line of extra accomplishments to be achieved for Palantir over a few years. All instructed, I’d encourage buyers to watch Palantir and look to make use of a technique leveraging dollar-cost averaging over a long-term horizon.
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Bank of America is an promoting accomplice of Motley Fool Money. Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has a disclosure coverage.
Should You Buy Palantir Stock Before Dec. 13? was initially revealed by The Motley Fool
