Should You Buy Palantir Stock Before Dec. 13?

By Investor Empires On Dec 9, 2024

Palantir Technologies (NASDAQ:PLTR) The company has achieved incredible success in 2024. The company has become one of the most talked-about platforms fueling the artificial intelligence (AI) narrative, and shares of the stock have gained more than 300% this year alone, becoming a member of Standard & Poor’s 500 index.

But with only a few weeks left in the year, Palantir may have one last big accomplishment up its sleeve. Below I’ll explain why December 13 is an important date for Palantir investors. Let’s break down what investors should be looking for and evaluate whether the stock is a good option to buy right now.

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This year, December 13 falls on a Friday. And while Friday the 13th is typically associated with bad luck or superstition, Palantir investors may have more good news coming their way.

next friday, Nasdaq-100 The index will be reconfigured. This means that a new set of companies will be added to the required index, replacing stocks that are no longer eligible.

This is important, because the Nasdaq 100 is generally associated with growth stocks and profitable opportunities outside the S&P 500.

Image source: Getty Images.

On September 6, Palantir announced that it had officially gained entry into the S&P 500. Since the date of this announcement, Palantir shares had risen 138% as of market close on December 5.

After a few months, Palantir announced that it is changing the stock exchange Which are traded – they move from the New York Stock Exchange (NYSE) to the NASDAQ.

Since joining the Nasdaq on November 26, Palantir shares have risen about 10% (as of market close on December 5). This is a very exciting move in just seven trading days.

In the press release related to this announcement, management expressed that “upon the transfer, Palantir expects to meet the eligibility requirements of the Nasdaq-100 Index.”

While history is no guarantee of future results, a stock’s performance after it enters the S&P 500 and moves into the Nasdaq is a good proxy for what investors can expect if the company earns a spot in the Nasdaq 100 on December 13. .

I think there’s a good chance Palantir will be added to the Nasdaq-100 next week, and if that happens, I’d be shocked if the stock doesn’t move higher. But while joining the Nasdaq-100 is a respectable achievement, such an achievement alone does not make Palantir shares a buy.

Instead, investors should look at a combination of a company’s growth expectations, Wall Street’s view of the company’s trajectory and its valuation.

Regarding Palantir’s outlook and Wall Street opinion, the company appears to be on track to continue accelerating its top line while increasing margins and generating higher profits over the next several years.

The primary catalyst fueling this growth is Palantir’s Artificial Intelligence Platform (AIP), which has become a game-changing product development for the company over the past two years. As such, some of Wall Street’s most respected analysts including Dan Ives of Wedbush Securities and Mariana Perez Mora of Wedbush Securities. Bank of America Stay bullish on the stock.

The only real concern I have with investing in Palantir at its current price comes down to valuation. To put it bluntly, a price-to-sales (P/S) multiple of 63.5 and a price-to-earnings (P/E) ratio of 149 are not even close to reasonable.

In my view, the stock has rallied so much that it is set for a pullback sooner rather than later. However, I see any potential sell-off as short-lived, as it will likely be driven by investors taking profits rather than panic selling in the event that Palantir faces some sort of crisis – which, right now, does not seem likely.

While the prospects of a Nasdaq-100 listing are exciting, it’s really just another potential milestone in what I see as a long line of more milestones to be achieved for Palantir over many years. Finally, I would encourage investors to keep an eye on Palantir and look to use a strategy that takes advantage of dollar cost averaging over a long-term horizon.

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Bank of America is an advertising partner of Motley Fool Money. Adam Spatacco He has positions at Palantir Technologies. The Motley Fool has positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has Disclosure policy.

Should you buy Palantir stock before December 13? Originally published by The Motley Fool