Should you buy Palantir stock before December 13th?

Palantir Technologies (NASDAQ: PLTR) has had incredible success in 2024. The company has become one of the most talked-about platforms driving the artificial intelligence (AI) narrative. This year alone, shares of the stock have gained more than 300%, and that is also a member of the S&P 500 Index.

But with just a few weeks left in the year, Palantir could have one last big milestone ahead of it. Below I will explain why December 13th is an important date for Palantir investors. Let’s break down what investors should pay attention to and assess whether the stock is a good buy right now.

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This year December 13th falls on a Friday. And while Friday the 13th is usually associated with bad luck or superstition, there could be more good news in store for Palantir investors.

Next Friday, that Nasdaq-100 The index is restored. This means that a new selection of companies will be added to the coveted index, replacing stocks that have dropped out.

This is important because the Nasdaq-100 is typically associated with growth stocks and lucrative opportunities beyond the S&P 500.

A humanoid robot looking at stock prices on an electronic display. — Image source: Getty Images.

On September 6, Palantir announced that it had officially joined the S&P 500. Since the date of this announcement, Palantir shares have increased 138% through the close on December 5th.

A few months later, Palantir announced that it was changing the exchange on which it trades – from the New York Stock Exchange (NYSE) to Nasdaq.

Since going public on the Nasdaq on November 26th, Palantir shares have gained approximately 10% (as of close on December 5th). That’s a pretty dramatic move in just seven trading days.

In the press release accompanying the announcement, management stated: “With the transfer, Palantir expects to meet the eligibility requirements of the Nasdaq-100 Index.”

While history is no guarantee of future results, the stock’s performance following its entry into the S&P 500 and its transition to the Nasdaq serves as a good indicator of what investors might expect should the company gain a spot on the Nasdaq on December 13th Get -100 .

I think there’s a good chance that Palantir will be added to the Nasdaq-100 next week, and if that happens, I would be shocked if the stock didn’t rise even further. Although inclusion in the Nasdaq-100 is a respectable milestone, such success alone is not a buy for Palantir stock.

Instead, investors should consider a combination of the company’s growth prospects, Wall Street’s view of the company’s performance, and valuation.

As far as Palantir’s outlook and Wall Street’s opinion are concerned, the company appears to be on track to continue growing its revenue over the next few years while increasing margins and generating higher profits.

The key catalyst for this growth is Palantir’s Artificial Intelligence Platform (AIP), which has become a groundbreaking product development for the company in recent years. Some of Wall Street’s most respected analysts, including Dan Ives of Wedbush Securities and Mariana Pérez Mora of Bank of America remain optimistic for the stock.

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

In my opinion, the stock has risen so much that a decline is imminent sooner rather than later. Still, I view a potential selloff as one that will be short-lived, as it will likely be driven by investor profit-taking rather than panic-induced selling should Palantir enter a crisis – which it is currently doing. Well, it doesn’t look likely out of.

While the prospect of inclusion on the Nasdaq-100 is exciting, in reality it is just another potential milestone in a long line of achievements that Palantir has to achieve over many years. All in all, I would encourage investors to keep an eye on Palantir and pursue a strategy that leverages 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 holds positions at Palantir Technologies. The Motley Fool has positions in and recommends Bank of America and Palantir Technologies. The Motley Fool has one Disclosure Policy.

Should you buy Palantir stock before December 13th? was originally published by The Motley Fool

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Should you buy Palantir stock before December 13th?

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