Palantir Technologies (NASDAQ:PLTR) It was among the best performing stocks this year. The company’s strong results led to the stock being listed on the stock exchange Standard & Poor’s 500And now I moved to Nasdaq The stock exchange, as it could soon join the more exclusive Nasdaq 100 index.
Could this become another catalyst that pushes this high-powered AI stock higher?
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At first glance, Palantir’s move from the NYSE to the Nasdaq may not seem like a big move since many of its higher growth stocks are on both exchanges.
But what has excited investors is the prospect of being added to the Nasdaq 100 index, which contains the largest non-financial stocks on the stock exchange. With many stocks in the Nasdaq 100 trading with a market capitalization of less than $100 billion, the entry of Palantir, which is worth more than $145 billion, is expected to be a devastating blow for it.
This is important because if it is included in the index, it means the stock is included in more exchange-traded funds and portfolios. All this buying can inevitably cause the stock’s value to rise. Being added to the index would also be a great sign of the tremendous success the data analytics company has achieved over the years, validating its efforts and strong growth.
As a technology and artificial intelligence leader, Palantir could also become more popular with anyone who may not be familiar with its business. It is difficult to imagine that many investors are not aware of one of the most important of these events Growth stocks On the market this year, but its presence on a well-known index could attract more attention to Palantir.
While more investors may be taking notice of Palantir, what many of them will also be paying close attention to is the stock’s sky-high valuation. With this massive market capitalization, the stock trades at 58 times the revenue it generated over the past 12 months and more than 320 times the earnings it generated. There’s no premium valuation multiple with Palantir that can help justify its current price.
It seems that many investors are willing to buy it just in the expectation that it will rise, just because it is a hot AI stock. It’s a speculative reason and probably one of the best examples of this The Greatest Fool Theory Effective now.
But attention can be both positive and negative. As Palantir crosses more investors’ radars and they notice its high valuation, their only move isn’t necessarily to buy the stock. They can also sell it short – and short interest in Palantir has been on the rise lately.
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