2024 was a big year for the data analytics company Palantir Technologies (NYSE: BLT). Perhaps the most important event for the company is its addition to Standard & Poor’s 500 earlier this year — a feat that few thought would have been possible just four years ago when Palantir went public and was quickly written off as a glorified government contracting and consulting firm with no real technology capabilities.
This story has come to an end. Over the past two years, Palantir has entered a new phase of growth thanks to the company’s successful launch of a new software suite called the Artificial Intelligence Platform (AIP).
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All of these factors have contributed to a notable increase in interest in Palantir shares over the past few months. At the time of this writing, Palantir shares are up 283% year to date. With the stock price at all-time highs, is it possible for it to continue rising?
In my view, I think Palantir stock is set to continue to perform. Below, I’ll analyze the company’s latest announcement and point out why investors should have their eyes on Palantir stock on November 26.
One thing that is often overlooked with stocks is… exchange which they trade. But, believe it or not, trading on the New York Stock Exchange (NYSE) versus the NASDAQ stock market can actually have some pretty big implications for a company.
A few days ago, Palantir announced that it would move its listing from the New York Stock Exchange to the Nasdaq. Palantir shares are expected to begin trading on Nasdaq on November 26.
On the surface, this may seem like ordinary news. But below I will detail a number of examples of other companies that switched to the NASDAQ and illustrate how their stock prices moved after the switch.
Below, I profile two companies that have moved from their original stock exchange to the Nasdaq in recent years.
Work day: On September 1, 2017, software company Workday announced that it would switch from the New York Stock Exchange to the Nasdaq. Workday shares began trading on the Nasdaq stock exchange two weeks later, on September 20. Here’s how Workday shares have moved since it became a publicly traded security on the Nasdaq:
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Between September 1, 2017 and September 20, 2017, shares fell by a nominal 2%.
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Between September 20, 2017 and September 20, 2018, the stock rose more than 30%.
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Since becoming a member of Nasdaq, the stock has risen 144%.
PepsiCo: On December 8, 2017, beverage and snacks group PepsiCo announced that it would move from the New York Stock Exchange to the Nasdaq. PepsiCo began trading as a member of the Nasdaq Stock Exchange on December 20, 2017.
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Between December 8, 2017 and December 20, 2017, shares rose by a nominal 2%.
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Between December 20, 2017 and December 20, 2018, the stock fell approximately 7%.
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Since becoming a member of Nasdaq, the stock has risen 33%.
I believe the decision to move to Nasdaq benefited PepsiCo and Workday in several ways. First, the Nasdaq is often associated with technology, growth, and innovation. While PepsiCo is a consumer packaged goods empire, I think the move to the NASDAQ helped visualize the company as more of a growth stock and less of a regular soda and snack company.
Additionally, Workday and PepsiCo have joined forces Nasdaq-100 After their movements from the New York Stock Exchange. Obtaining a listing on the Nasdaq-100 could help a company get onto more investors’ radars. As such, increases in trading and buying volume can occur which positively affects stock prices.
While the news about Palantir changing from the NYSE to the Nasdaq is interesting, you’re probably wondering why the company did this in the first place.
To be honest, there are a lot of reasons that can influence a company’s decision to move exchanges. Some of the more discreet factors could be related to the fees associated with different stock exchanges, for example. In my view, the cost structures between different exchanges are not really a concern for Palantir.
Instead, I believe the move to the Nasdaq is rooted in the brands. While the Nasdaq is home to companies in many different industries, they are mostly affiliated with the technology sector. Given the success Palantir has had throughout the AI revolution, I think the idea of the company being a consulting firm for the government has been erased.
Palantir has a close alliance with major technology companies It reinforces the company as a powerful force in the AI industry, and I believe the move to the Nasdaq stock exchange will help reinforce the company’s image as a legitimate player in the world of technology.
I previously predicted that Palantir’s inclusion in the S&P 500 would help put the company on the radar of more institutional investors. I now reiterate this position, as joining the Nasdaq would help better position Palantir as an attractive growth stock in a sea of leading technology companies.
Some analysts are already predicting that increased institutional buying coupled with the spotlight on the Nasdaq could push Palantir into the coveted Nasdaq 100 index. If that comes true, I think it’s almost certain that the company’s stock price will continue to rise.
Although I can’t say for sure what will happen, Palantir’s stock price has already seen some momentum following news of the company’s transition from the New York Stock Exchange. I believe that trading on the Nasdaq will help Palantir become more widely recognized as a leading opportunity in the AI and technology fields over time. For these reasons, I believe the stock will follow the trends I mentioned above and continue to rise after it moves to the Nasdaq.
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Adam Spatacco He has positions at Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies and Workday. The Motley Fool has Disclosure policy.
Prediction: Palantir stock will rise after November 26th Originally published by The Motley Fool