Palantir Technologies (NASDAQ:PLTR) has had an incredible run in 2024. The company has become one of the most talked about platforms fueling the artificial intelligence (AI) narrative, with its shares up more than 300% this year alone and joining the S&P500 index.
But with just a few weeks left in the year, Palantir may have one last big milestone in store. Below I’m going to explain why December 13 is an important date for Palantir investors. Let’s see what investors should look for and assess whether the stock is a good buy right now.
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This year December 13 falls on a Friday. And while Friday the 13th is usually associated with bad luck or superstition, Palantir investors may have even more good news coming their way.
Next Friday the Nasdaq-100 index will be rebuilt. This means that a new selection of companies will be added to the coveted index, replacing stocks that are no longer eligible.
This is important because the Nasdaq-100 is generally associated with growth stocks and lucrative opportunities outside of the S&P 500.
On September 6, Palantir announced that it had officially gained entry into the S&P 500. Since the date of that announcement, Palantir shares have risen 138% as of the market close on December 5.
A few months later, Palantir announced that it would change the exchange on which it trades: from the New York Stock Exchange (NYSE) to the Nasdaq.
Since joining the Nasdaq on November 26, Palantir’s shares are up about 10% (as of market close on December 5). That’s a pretty dramatic move in just seven trading days.
In the press release about this announcement, management indicated that “Palantir expects to meet the eligibility requirements for the Nasdaq-100 Index upon the transfer.”
While history is no guarantee of future results, the stock’s performance following its entry into the S&P 500 and transition to the Nasdaq serves as a good indication of what investors could expect if the company were to list on the Nasdaq on December 13 would earn -100. .
I think there’s a good chance Palantir will be added to the Nasdaq-100 next week, and if that were to happen, I’d be shocked if the stock doesn’t rise even further. But while joining the Nasdaq-100 is a respectable milestone, such an achievement alone doesn’t make Palantir stock a buy.
Instead, investors should look at a combination of the company’s growth prospects, Wall Street’s view of the company’s trajectory, and its valuation.
As for Palantir and Wall Street’s prospects, the company appears to be on track to continue accelerating its revenue while growing margins and achieving higher profits in the coming years.
The key catalyst driving this growth is Palantir’s Artificial Intelligence Platform (AIP), which has become a breakthrough product development for the company in recent years. As such, some of Wall Street’s most respected analysts, including Dan Ives of Wedbush Securities and Mariana Pérez Mora of Bank of America remain bullish on the stock.
The only real concern I have around an investment in Palantir at its current price comes down to its valuation. To put it bluntly, a price-to-sales ratio of 63.5 and a forward price-to-earnings ratio of 149 aren’t even reasonable.
In my view, the shares have risen so much that sooner or later a pullback is necessary. But that said, I view any potential sell-off as one that will be short-lived, as it will likely be driven by investors taking profits, as opposed to panic-induced selling, should Palantir face some sort of crisis – which, as of now, seems unlikely.
While the prospects for inclusion on the Nasdaq-100 are exciting, it’s really just another potential milestone in what I see as a long line of even more achievements that Palantir will achieve over the course of many years. All in all, I would encourage investors to keep an eye on Palantir and look for a strategy that uses dollar-cost averaging over a long-term horizon.
Consider the following before purchasing shares in Palantir Technologies:
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Bank of America is an advertising partner of Motley Fool Money. Adam Spatacco holds positions at Palantir Technologies. The Motley Fool holds positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has a disclosure policy.
Should You Buy Palantir Shares Before December 13? was originally published by The Motley Fool
