Palantir's Inclusion in S&P 500: A Milestone for the Data Analytics Giant

Analysts respond to Palantir's entry into the S&P 500

Stories that Palantir Technologies (PLTR) helped locate Osama bin Laden have been circulating for quite a while. Related: Three hot stocks -- one a surprise -- will join S&P 500 In the book "The Finish," detailing the killing of bin Laden, author Mark Bowden wrote that Palantir's software "actually deserves the popular designation Killer App." The data-analytics company's tech also helped locate Mexican drug cartel members who murdered an American customs agent, and it tracked down hackers who installed spyware on the computer of the Dalai Lama. Gen. David Petraeus, director of the CIA under President Barack Obama, described Palantir to Forbes in 2013 as "a better mousetrap when a better mousetrap was needed" and CEO Alex Karp as "sheer brilliant." But about bin Laden...? When the New York Times columnist Maureen Dowd asked Karp whether the company had indeed played a role in locating the architect of the 9/11 attacks, he said that "if you have a reputation for talking about what the pope says when you meet him, you'll never meet the pope again." He added that without Palantir's software, "you would've had massive terror attacks in Europe already, like Oct. 7 style," referring to the Hamas attacks on Israel. The Denver data-analytics company, which has been trading publicly only for the past four years, saw its stock surge some 12% on Sept. 9 on news that the group will be added to the S&P 500. S&P Dow Jones Indices said Palantir, Dell Technologies (DELL) and Erie Indemnity (ERIE) would join the broadest list of U.S. blue-chip shares on Sept. 23. American Airlines (AAL) , Etsy (ETSY) and Bio-Rad Laboratories (BIO) will join the mid-cap S&P 400 index. Related: Palantir stock surges on huge S&P 500 decision Founded in 2003 by Karp, billionaire investor Peter Thiel, and Stephen Cohen, the company's name comes from the "seeing stones" in J.R.R. Tolkien's "Lord of the Rings." These were indestructible balls of crystal used for communication and to see events in other parts of the world. "We were founded in 2003 and started building software for the intelligence community in the United States to assist in counterterrorism investigations and operations," the company said in a regulatory filing. Sign up for TheStreet's free daily newsletter. "We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data," the filing said. Critics have complained about Palantir's work at the border, which helped U.S. Immigration and Customs Enforcement track down undocumented migrants for deportation. In 2019, about 70 demonstrators blocked access to the cafeteria outside the Palo Alto office, shouting "Immigrants are welcome here, time to cancel Palantir." In addition, Thiel is backing former President Donald Trump in the November election, and Karp said he told the billionaire "this is not making our life easier." Palantir, which does not do business with China, Russia or other countries that oppose the West, posted record quarterly profit last month. Sales rose 27% thanks in part to surging demand for its AIP Logic platform, which tests and improves AI-related strategies. Investing veteran 'banging the table' for Palantir Karp said in his letter to shareholders that "every part of our organization is focused on the rollout of AIP, which has gone from a prototype to a product in months." The demand for large language models from commercial institutions in the U.S., he said, "continues to be unrelenting." LLMs are models, trained on data, that can understand and generate language and perform tasks. More Tech Stocks: "This is a super important time for Palantir because we have proven to the world that what we do is quantifiable and real," Karp told analysts during the company's earnings call. "We are focused on growing this company to be much more impactful, much larger, and much more valuable." "We know that many of you also support us because you realize that we are value-aligned with your values, which means fighting to make the West a stronger and better place, including on the battlefield," he added. Among those staunchly supporting the company is TheStreet Pro's Stephen Guilfoyle. "I have been pounding the table for Palantir for quite some time," he said "The 'Stocks Under $10' portfolio was long the shares with a mid-single-digits net basis. Once that product was terminated as a stand-alone offering and I was allowed to own the shares of portfolio stocks in my own accounts, PLTR was the first name I bought for myself, with a $16 handle." Wedbush's Dan Ives on Palantir Wedbush analyst Dan Ives said the company's addition to the S&P 500 is a moment that Palantir investors "have been anxiously waiting for over the past year as the profitability profile of this story has significantly been bolstered with this, another validation moment for the Palantir story." "We believe many skeptics of Palantir have underestimated the profitability and cash flow potential of Palantir with Artificial Intelligence Platform and the US commercial business a core driver of the business model going forward," he said. AIP has been able to show its customers how to work through specific tasks that require Al and enable it to propose and undertake real-world actions as well, said Ives, who maintained his outperform rating and $38 price target on the shares. The analyst said it's also likely to spur a multiyear cycle for deals, as more companies seek out Al capabilities that provide value and innovation, something Palantir's AlP can help with. "In a nutshell, getting added to the S&P 500 Index is an important moment in the Palantir story that we believe marks a new era of enterprise growth and profitability over the next few years," Ives said. Related: Veteran fund manager sees world of pain coming for stocks

What's Going On With Palantir Stock? - Palantir Technologies (NYSE:PLTR)

Palantir Technologies, Inc. PLTR shares have gained more than 12% since Friday. Here's a look at what's going on. What To Know: Palantir's stock soared by 14.08% Monday following Friday's announcement that the stock will join the S&P 500 index. Alex Karp, CEO of Palantir, celebrated the company's inclusion in the S&P 500 which he referred to as "one of the most important institutions in economic life." "We structured our company around what you ought to build, not only what you are told to build. It is a momentous occasion, not just for us, but for all our partners who rely on us. The rebels won on Friday. There's no better metaphor for that than joining the S&P 500," Karp told CNBC. Wedbush analyst Dan Ives viewed Palantir's inclusion as a boost to its profitability and called the move "another validation moment for the Palantir story." B of A Securities analyst Mariana Perez maintained a Buy rating on the stock and raised the price target from $30 to $50 on Tuesday. Read Next: Oracle Stock Climbs On Strong Q1 Results, Partnerships With Google Cloud, AWS What Else: Palantir's rise was also fueled by the company's latest enterprise agreement with BP PLC BP announced on Monday. The agreement will introduce new artificial intelligence capabilities with Palantir's AIP software to assist BP to safely and reliably harness large language models (LLMs) to improve and accelerate human decision-making with suggested courses of action based on automated analysis of the underlying data. PLTR Stock Prediction 2024: Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock. Shares of Palantir Technologies have an average 1-year price target of $27.79, representing an expected downside of 19.95%. Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. 4 analysts have bearish recommendations on Palantir Technologies, while 5 analysts have bullish ratings. The street high price target from B of A Securities is $50, while the street low from RBC Capital is $9. PLTR Price Action: According to Benzinga Pro, Palantir shares are down 0.2% at $34.53 at the time of publication Tuesday. Read Also: What's Going On With GameStop Stock Ahead Of Earnings? Image: Shutterstock Market News and Data brought to you by Benzinga APIs

Palantir's S&P 500 Inclusion A 'Watershed Moment,' Says Bank of America, Anticipates 'More Institutional Investors' - AppLovin (NASDAQ:APP), iShares Expanded Tech-Software Sector ETF (BATS:IGV)

The firm's strong financials, including $3.9 billion in net cash, and leadership in AI platforms position it as a standout among peers. With its inclusion in the S&P 500 index, Palantir Technologies Inc. PLTR is entering a new phase that will likely attract a new wave of investors and long-term capital, according to Bank of America. On Tuesday, the investment bank reiterated a Buy rating and raised the price target for the data analytics and artificial intelligence firm from $30 to $50, as "S&P 500 inclusion provides a watershed moment" for institutional investors. "We think that becoming a member of the S&P 500 could be highly beneficial to PLTR's stock volatility. We think that the inclusion would attract more institutional investors, both passive and active," wrote Mariana Perez Mora, an analyst at Bank of America. Strong Financials, Strategic AI Leadership Palantir has become a key player in artificial intelligence, leveraging its deep ties with both government and commercial sectors. Bank of America's revised $50 price target reflects a new valuation approach, which rolls estimates forward to 2026. This leads to a projected enterprise value of $116 billion, propelling Palantir closer to the top 100 companies in the S&P 500 (from its current ranking in the 165th range). Mora explained that the elevated multiple derived from the updated price target is justified by Palantir's position in national security, its leadership in AI platforms, and its opportunistic partnerships. She also stressed the company's strong balance sheet, particularly its $3.9 billion net cash position, as a sign of financial strength that sets Palantir apart from competitors. A Misunderstood Giant in AI Bank of America draws attention to a significant market underestimation of Palantir's future potential, likening it to AT&T Inc.'s T early misjudgment of the mobile phone market in the 1980s. "In 1980, AT&T hired a consultancy company to estimate the market size for cell phones by 2000. The study suggested there would only be 900k users. The actual number of mobile subscriptions in 2000 was more than 100 million," the report stated. The analogy underscores how early forecasts often miss the mark on disruptive technologies. Similarly, Palantir's advanced AI capabilities, particularly its Foundry platform, are seen as a vastly underappreciated asset. Foundry is designed to make data not only accessible but actionable, transforming decision-making processes across various industries. Bank of America's bullish outlook on Palantir is also supported by its expanding list of partnerships. The company is working closely with major corporations and government agencies, including PwC, Jacobs, Accenture, and Airbus, to broaden its customer base. "We see Palantir as a beneficiary of rapidly growing demand for Artificial Intelligence (AI)-platforms in both commercial and government end-markets," the report stated. Shares of Palantir traded 0.4% lower by 11:15 a.m. ET on Tuesday, after rallying as much as 14.1% a day earlier. Within the software-related industry, as tracked by the iShares Expanded Tech-Software Sector ETF IGV, Palantir ranks third in year-to-date returns, rising 100%, behind Zeta Global Holdings Corp. ZETA, which skyrocketed 187%, and AppLovin Corp. APP, which surged 116%. Read Next: EXCLUSIVE: Lazard Small-Cap Expert Predicts 30-50% Russell 2000 Rally On The Back Of Lower Interest Rates Photo: World Economic Forum on Flickr Market News and Data brought to you by Benzinga APIs

Palantir's S&P 500 Journey: Rebel Tech Giant Transforms Into 'Frankenstein Monster Powered By Freak Show Leader' - Palantir Technologies (NYSE:PLTR)

CEO Alex Karp emphasized the company's rejection of traditional management and its global influence. Palantir Technologies PLTR recently reached a significant milestone: its inclusion in the prestigious S&P 500. The inclusion in the S&P 500 will put the stock inside several of the leading ETFs including the SPDR S&P 500 ETF Trust SPY. And the company's journey -- from a small, often misunderstood startup to a technology giant -- is not lost on co-founder and CEO Alex Karp. Bold Journey: Karp marked the S&P 500 inclusion occasion, calling it "an enormous, momentous occasion for every Palantir." This achievement is particularly striking given the unconventional path the company has taken to profitability and recognition. Karp emphasized how Palantir's unique approach, centered on building exceptional products, has been key to its success. "We built the best products in the world. We started off in one area of the West Clandestine Services. We migrated into the military, into Spec Ops in the US commercial and into us into commercial globally," Karp explained. See below. From the development of early tools like PD PPG to more advanced platforms like Apollo and Foundry, Palantir has continuously expanded its offerings. "All of these products were conceived and productized and now are being platform designs," Karp added. Profitability was crucial for Palantir's inclusion in the S&P 500, and Karp did not shy away from this reality. "In order to be on the S&P 500, you have to be profitable, which is a financial way of saying you have to make real tendies," he remarked. Did You Know? Congress Is Making Huge Investments. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool From Frankenstein to Profits: This profitability marked a turning point for Palantir, which had previously been viewed skeptically. "They do not comprehend how we could have turned a switch and gone to Gap profitability and gone from what adults, professional managers and some analysts thought was a Frankenstein monster powered by a freak show leader -- me -- to a dynamic, clearly profitable company worthy of and admitted to the S&P 500," Karp stated. Central to Palantir's philosophy has been its rejection of traditional corporate management. Karp underscored this when he said, "We rejected professional management people everywhere discussing how to build companies in a way that keeps the somewhat, if not toxic, often carcinogenic influence of people who have written PowerPoints out of your company." He emphasized that Palantir's culture and revenue model reflect this independent approach: "Our products reflect that. Our culture reflects it. Our revenue reflects it." Palantir's partnerships with key institutions have also played a significant role in its growth. "Look at the list of people that use our product. The most important clandestine services. The most informed and special operators. The most important AI targeting work in the world. The most important allies, none of whom were ashamed to support in private or in public," Karp noted. These relationships, spanning both public and private sectors, have been integral to Palantir's influence globally. Summing up the significance of Palantir's inclusion in the S&P 500, Karp declared, "And the rebels won on Friday. I don't know any other occasion like this where the rebels actually got inside the gate and helped the institutions transform themselves." For Karp, this moment not only marks financial success but also signifies a broader shift in how institutions operate. As he optimistically stated, "We did this together and the future belongs to us." PLTR Price Action: Palantir shares trade at $34.80 Tuesday, hitting new 52-week highs. Palantir stock is up 109% year-to-date in 2024. This article was partially written using artificial intelligence and was reviewed by Benzinga editors. Read Next: Palantir's S&P 500 Inclusion 'Another Validation Moment' As It Embarks On New Era Of Enterprise Growth And Profitability, Says Bullish Analyst Image via Shutterstock Market News and Data brought to you by Benzinga APIs

Palantir stock leaps on big S&P 500 boost for data analytics group

Palantir shares powered higher in early Monday trading after news that the data-analytics group, which has only been trading publicly for the past four years, will be added to the S&P 500. Palantir (PLTR) , which went public in 2020, has added more than $35 billion in market value over the past year, was chosen to replace stalwart American Airlines (AAL) in the S&P 500. S&P Dow Jones Indices, which manages the benchmark, said Palantir, Dell Technologies (DELL) and Erie Indemnity (ERIE) would join the broadest list of U.S. bluechip shares on Sept. 23, with American, Etsy (ETSY) and Bio-Rad Laboratories (BIO) leaving for the mid-cap S&P 400 index. Stocks added to the benchmark much have a market cap of at least $13.1 billion, be highly liquid, have a float of at least 10% of shares outstanding and mut have maintained positive earnings over the past four quarters. Inclusion in the benchmark typically attracts buying interest from investment funds that track the value of major indices by holding the stocks within them. The so-called S&P 500 inclusion effect, however, has been mixed over the past decade, with a recent Standard & Poor's indicating little long-term impact from a stock's place in the benchmark. Nonetheless, the addition of Palantir, a data-analytics group focused on AI that caters to commercial and government clients, marks a key milestone in its 20-year history and validates investor enthusiasm for the Denver-based group founded by Peter Thiel and Joe Lonsdale. "This was a moment that Palantir investors have been anxiously waiting for over the past year as the profitability profile of this story has significantly been bolstered with this another validation moment for the Palantir story," said Wedbush analyst Dan Ives. Related: Analyst revamps Palantir stock price target on earnings, Microsoft deal "In a nutshell, getting added to the S&P 500 Index is an important moment in the Palantir story that we believe marks a new era of enterprise growth and profitability over the next few years," he added. Commercial earnings boost Palantir recorded a notable surge in its commercial division sales last quarter, a move which helped the group raise its annual profit forecast as it expands the success of its AIP Logic platform, which tests and improves AI-related strategies, outside its legacy government client list. The group forecast full-year sales of around $2.75 billion, a modest boost from its prior forecast, with adjusted profit from operations in the region of $966 million to $974 million. Related: Veteran trader who predicted Palantir, SoFi, and Rocket Lab's rally updates outlook It also unveiled a new partnership with Microsoft (MSFT) that will see the tech giant integrate Palantir's products into Azure's cloud services for government customers. Palantir will also adopt Azure's OpenAI, with the ability to deploy it in classified environments among its growing base of government and intelligence community clients. More AI Stocks: "We believe this is the start of a multi-year cycle for Palantir to continue generating significant deal flow as more organizations look to add AI capabilities that provide value and innovation in real time across operations that are unique to each enterprise," Ives said. Palantir shares were marked 7.15% higher in premarket trading to indicate an opening bell price of $32.50 each, a move that would extend the stock's six month gain to around 28%. Related: Veteran fund manager sees world of pain coming for stocks

Is Palantir Technologies Stock a Buy Now? | The Motley Fool

Palantir Technologies (PLTR 14.08%) investors recently got great news: The artificial intelligence (AI) and data analytics company is joining the S&P 500. The stock has been quite volatile since the company went public in 2020. Making the S&P 500 validates what many investors have long been saying: Palantir is a quality business deserving recognition among America's most prominent companies. Now that Palantir is bound for the S&P 500, what does that mean for investors today? The stock price has already risen more than 127% over the past year. Should you buy Palantir stock now? Here is what you need to know. Palantir making the S&P 500 is a big deal for several reasons. First, it provides some validation that Palantir is a quality business. Companies must meet specific requirements to join the S&P 500 index, including consistent profitability under generally accepted accounting principles (GAAP) and certain market cap thresholds. These requirements help keep speculative stocks out of the index and ensure the S&P 500 represents the best American companies. Palantir passing those rules is noteworthy, but the simple inclusion into the S&P 500 is a badge of honor that could make investors see the stock in a new light. Additionally, it should create investor demand for the stock. Many people invest in exchange-traded funds that track the S&P 500 index. Once Palantir formally joins the index, these funds must buy Palantir accordingly. It is exciting that Palantir has joined the S&P 500, but its strong fundamentals ultimately got it into the index, and they should form the basis of any investor's thesis. Palantir is profitably growing because of the custom software it sells to the United States government, its allies, and to private U.S. companies. This technology combines artificial intelligence and data analytics to provide insights and analysis that help users make more intelligent, real-time decisions. That is a vague description, but only because Palantir's technology is versatile. Palantir helps the government perform military operations. It helps hospitals run more efficiently. Palantir has helped detect financial fraud and uncover human trafficking. The use cases are seemingly endless. The company launched its AIP platform last year for AI applications, and it has proven to be a significant growth catalyst. You can see that Palantir's revenue growth has accelerated since AIP launched: Additionally, Palantir is a financially healthy company. Yes, it's comfortably GAAP profitable. It also has a strong balance sheet with $4 billion in cash and zero debt. The business should also hold up relatively well in a recession; it gets over half its revenue from the U.S. government, which is unlikely to rip out mission-critical software like Palantir's at a time when geopolitical tensions are prevalent worldwide. It's a great story, but buying the stock depends on how Palantir's valuation lines up against its growth prospects. Continually accelerating revenue growth points to a healthy growth outlook. Analysts expect the company to grow earnings by an average of 30% annually for the next three to five years. Meanwhile, the stock trades at a forward P/E of 85. That's pretty steep, even for a business compounding earnings at 30%. Investors can look at the PEG ratio to understand just how expensive the stock is (the lower the PEG, the better). I generally look for PEG ratios between 1.5 and 2. Palantir's PEG ratio is 2.8 today. That's a notable gap that would probably require a sizable drop in the share price to make Palantir attractive again. Is that likely? Nobody can say for sure. Joining the S&P 500 could create more appetite for the stock, but the market has also become more volatile in recent weeks as economic data weakens and interest rate cuts appear imminent. If the market continues to tremble, patience could present better buying opportunities over the coming months. For now, Palantir is an easy hold, but it is probably not a stock worth buying now.

Palantir Stock Soars In Monday Premarket: What's Driving The Surge? - Palantir Technologies (NYSE:PLTR)

Shares of artificial intelligence-powered data analytics company Palantir Technologies, Inc. PLTR climbed sharply in premarket trading on Monday. The gains can be traced back to a late-Friday announcement from S&P Dow Jones Indices that Palantir would be added to the S&P 500 Index, ahead of the start of trading on Sept. 23. Despite widespread anticipation, the S&P had snubbed Palantir in its two previous quarterly rebalancing. The S&P 500 Index is considered the best single gauge of large-cap U.S. equities and includes 500 leading companies, covering approximately 80% of available market capitalization. The eligibility criteria for S&P 500 Index inclusion are a market capitalization of $15.8 billion or more, an annual dollar value traded to float-adjusted market capitalization greater than 0.75, a listing in either NYSE or NASDAQ and a primary listing in the U.S. There is a trading-volume criterion as well. Index inclusion is typically positive for stocks, as funds holding portfolios mirroring the index will buy them to maintain the respective weightings of the component stocks. The stock will also benefit from increased volume and liquidity due to purchases by index funds and ETFs. Following the development, Wedbush analyst Daniel Ives said, "The profitability profile of this story has significantly been bolstered with this another validation moment for the Palantir story." In premarket trading, Palantir shares 6.73% to $32.37, according to Benzinga Pro data. Dell Technologies Inc. DELL and Erie Indemnity Company ERIE, which also made it to the index, rose 6.02% and 2.89%, respectively, in the premarket. See Also: Best AI Stocks Photo by Spyro the Dragon on Shutterstock Market News and Data brought to you by Benzinga APIs

Palantir Stock Soars After S&P 500 Inclusion, AI Deal With BP Fuels Additional Gains - What's Next? - Palantir Technologies (NYSE:PLTR)

A pre-market gain of 8.54% fueled by new BP enterprise deal and AI expansion, adds to the bull signs from technical indicators. Palantir Technologies Inc. PLTR is gearing up for a significant milestone: its inclusion in the S&P 500 index, effective Sept. 23. S&P 500 Inclusion Boosts Palantir's Stock This move will see Palantir replace American Airlines Group Inc AAL, Etsy Inc ETSY and Bio-Rad Laboratories Inc BIO. Historically, inclusion in this prestigious index tends to drive up stock prices due to increased buying from index funds and ETFs. Palantir shares have already seen a notable uptick, jumping over 10% on Monday. New Enterprise Deal Fuels Pre-Market Surge This rise is also fueled by the company's latest enterprise agreement with BP PLC BP, aimed at extending their strategic relationship. The deal will introduce new AI capabilities with Palantir's AIP software, further boosting investor confidence. The collaboration highlights Palantir's growing influence in the AI space and its expanding commercial footprint. Read Also: Palantir Stock Soars In Monday Premarket: What's Driving The Surge? Palantir Stock: Bulls Vs. Bears Technically, Palantir's stock is showing a bullish picture. Chart created using Benzinga Pro Currently trading at $32.94, it's above its 50-day SMA of $28.83 and 200-day SMA of $23.14, signaling long-term bullish momentum. The stock's price is currently above both the eight-day and 20-day SMAs, at $30.92 and $31.21, respectively, indicating short-term buying pressure. This suggests a positive overall trend and points to a potential bullish trajectory moving forward. Palantir's upcoming S&P 500 inclusion and new enterprise deal with BP are significant drivers of its recent stock performance. Investors should watch for how these factors interact with the technical indicators as the company prepares for its S&P debut and continues to expand its AI capabilities. Read Next: Palantir's S&P 500 Inclusion 'Another Validation Moment' As It Embarks On New Era Of Enterprise Growth And Profitability, Says Bullish Analyst Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

Should You Buy Palantir Before Sept. 23?

This upcoming event represents a major milestone for Palantir. Palantir Technologies (PLTR 14.08%) has been on many investors' buy lists this year -- and that's helped the stock to soar about 75%. Investors have piled into the shares thanks to the company's tremendous growth and its use of artificial intelligence (AI) technology to serve its customers. Palantir helps governments, organizations, and companies make better use of their data to therefore become more efficient and more profitable. The software-as-a-service company launched its Artificial Intelligence Platform (AIP) last year, and growth has taken off. In fact, in the most recent quarter, Palantir reported its biggest quarterly profit in the company's 20-year history. It's no surprise that the S&P 500 invited Palantir to join -- and that will happen as of market open on Sept. 23. Should you get in on this top technology stock before then? Let's find out. Palantir's path so far First, a quick look at Palantir's path so far. For years, the company was more associated with government contracts than deals in the corporate world. But in recent times, Palantir has put the focus on growing its commercial business, and this is helping to supercharge revenue. Palantir's platform helps its customers aggregate all of their data and use it to make smart and even game-changing decisions. For example, Tampa General Hospital uses AIP to manage staffing and bed placement, a move that's helped the hospital gain in efficiency. And Wendy's restaurants recently selected Palantir to help it power an AI-driven digital transformation -- the company will use AIP to access all data for decision making and will eventually use the platform for supply chain management and waste prevention. As of the last reporting period, ended June 30, Palantir had 295 U.S. commercial customers. This may not seem like a lot but here are a few points to keep in mind. First of all, this represents 83% in customer count growth in the quarter year over year, so companies clearly are interested in what Palantir has to offer -- and this can even be seen in deal value growth, which climbed more than 100% from the same period a year ago. Second, this number means there still is plenty of room for Palantir to sign on new customers and grow. Finally, these customers delivered $159 million in revenue for the company in the quarter -- deal sizes vary, but it's clear these customers are willing to enter into sizable partnerships with Palantir. (And it's also important to keep in mind that as recently as four years ago, Palantir only had 14 commercial customers in the U.S.) Palantir's $10 million deals Speaking of deal size, Palantir, counting both commercial and government businesses, closed 27 deals valued at more than $10 million in the quarter. On top of this, government revenue continues to climb in the double digits, 23% in the quarter to more than $370 million. So Palantir has built a track record of success over the years thanks to its government business and in recent months has seen the commercial business take off -- and AIP is offering a new wave of growth for both of these segments. Demand "shows no sign of relenting," chief executive officer Alex Karp wrote in his latest letter to shareholders. Considering the interest in AI these days, forecasts for the market to reach $1 trillion by 2030, and Palantir's concrete results for customers, there's reason to be optimistic. A key player in today's economy But does all of this mean you should buy Palantir before its Sept. 23 addition to the S&P 500? This addition is significant as it recognizes the company is one of the powerhouses driving today's economy. And this may prompt more investors, over time, to buy the shares. The stock may also see some gains in the near term as S&P 500 trackers add the shares -- they have to do this as their goal is to mimic the index's performance. All of that is positive, but what truly makes Palantir a buy is the company's long-term growth prospects, which look solid considering the momentum we've seen in recent times. And if you hold on for the long term -- which is the best way to invest -- you don't have to precisely time your purchase to benefit. This means Palantir makes a terrific AI growth buy now -- and after Sept. 23.

Palantir Shares Set to Enter the S&P 500: Worth Buying Now or Later?

Since early August, Palantir Technologies (NYSE:PLTR) pleasantly surprised shareholders with a 26% valuation boost, from $26.95 to the current $34.04 per share. However, this was less surprising for investors who looked into how exactly Palantir implemented AI to bolster its bottom line. Most recently, on September 6th, S&P Dow Jones Indices announced that Palantir and Dell Technologies (NYSE:DELL) will join the S&P 500 index on September 23rd. While Palantir replaced American Airlines (NASDAQ:AAL), Dell replaced Etsy Inc. (NASDAQ:ETSY). This was also not surprising given the tight collaboration between Dell's AI Factory and Nvidia (NASDAQ:NVDA). Year-to-date, PLTR stock is up 105%, while Dell shares returned 42% value. Both companies significantly outperformed Bitcoin, which largely had sideways action and 23% returns. Although S&P 500 status is not new for Dell, having been on it between 1996 and 2013, it is a return for the PC vendor since it went public again in 2018. In contrast, Palantir is a much younger company, having been founded by Peter Thiel in 2003 but going public on NYSE in 2020. Since Friday, the S&P 500 news has boosted PLTR stock by 12%. Should investors take this as an opportunity to expose themselves to AI within the intelligence sector? Why Was Palantir's Profitability Problematic? After Palantir Technologies went public on September 30, 2020, it took two more years for the company to start making money, as of Q4 2022. In the quarter, Palantir became profitable, delivering a net income of $31 million and total revenue for FY 2022 of $1.91 billion. Since then, Palantir has increased profits every consecutive quarter. In the latest Q2 2024 earnings delivered in August, the data analytics company reported a $134 million net income after leaving FY 2023 with a total revenue of $2.23 billion. In other words, Palantir's gross margin, as profitability measuring the percentage difference between gross profit of $550 million and revenue of $678 million, increased sharply. From the end of 2020 to Q2 2024, Palantir's gross margin increased from 67.77% to 81.44%. Previously, the company's R&D expenses gobbled up much of the profits. But this critical investment waned drastically, going from $560.6 million at the end of 2020 to $387.5 million by the end of 2021. During that capital intensive period, Palantir enjoyed a buffer from government contracts. From the U.S. Department of Defense (DoD), U.S. Special Operations Command (USSOCOM) and U.S. Army to Department of Homeland Security (DHS), they comprised over 70% of Palantir's revenue. Palantir's Commercial Focus, but Even Greater Government Boost? Government contracts not only provided Palantir's buffer for financing, but they launched its reputation as a robust enterprise, one that is deeply embedded within the so-called "deep state". In Q2 2024, the gap between the company's commercial and government revenue continues to close, at $307 million vs $371 respectively. With that said, Palantir also accumulated a $5.4 billion deficit. Although the accumulated deficit is $239.6 million lower from the year-ago quarter, it is still substantial. However, it appears that Palantir's investments in large language models (LLMs) to launch its Artificial Intelligence Platform (AIP) in April 2023 are just beginning to pay off. Currently, Palantir holds a 16.77 price-to-book ratio, with an enterprise value/revenue ratio of 25.89. At nearly 17 times its book value, investors clearly have high expectations, placing Palantir in the high-risk, high-reward investment box. That very well may be the case if former President Donald Trump wins his 2nd term. It is no secret that Peter Thiel backed both Trump and his VP pick, J.D. Vance. Although this relationship didn't sit well with Palantir CEO Alex Karp, having described it as an obstacle to "to get things done", it appears that this will become a moot point heading into 2025. Fully expecting greater intake from government agencies, Palantir announced AIP's launch on Microsoft's Azure cloud infrastructure in August. Through this partnership, Palantir's family of AI-powered products - Foundry, Gotham, Apollo, and AIP - will receive Azure Government Secret (DoD Impact Level 6) and Top Secret cloud access. "Bringing Palantir and Microsoft (NASDAQ:MSFT) capabilities to our national security apparatus is a step change in how we can support the defense and intelligence communities," Shyam Sankar, Palantir's Chief Technology Officer (CTO) Analyst Forecasts on Palantir Stock Unsurprisingly, there is much divergence on PLTR valuation. The Royal Bank of Canada still maintains its position of $9 price target. This range is near Goldman Sachs (NYSE:GS) price target of $14 to $16, giving PLTR shares a neutral rating as of early August. Jefferies Financial Group realigned its Palantir price target from $24 to $28, but still gave it a "hold" rating. Wedbush has been rather bullish, with a $38 target, as of this Monday. At present $34.04, Palantir stock is close to its all-time high of $39 in January 2021, and significantly above its 52-week average of $21.82 per share. On aggregate per Nasdaq data, 15 analysts place the average PLTR price target at $25.42, with the bottom as low as $9 and the ceiling as high as $38 per share. After PLTR stock becomes an official member of the S&P 500 index, it is likely there will be a large market correction. At this point, investors should consider PLTR stock again, especially if they are confident in President Trump's 2nd term. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

The Newest Artificial Intelligence (AI) Stock in the S&P 500 Is Up 370% Since 2023. Wall Street Says Avoid It.

Palantir Technologies will be added to the S&P 500 later this month. The S&P 500 (^GSPC -1.73%) measures the performance of 500 companies that meet specific eligibility requirements, including positive earnings over the last four quarters, a market value of at least $18 billion, and a sufficiently liquid stock. The S&P 500 is generally considered to be the best barometer for the overall U.S. stock market. Palantir Technologies (PLTR 0.56%) will join the benchmark index on Monday, Sept. 23, the date of the next quarterly rebalancing. Palantir shares have skyrocketed 370% since January 2023, a period that essentially coincides with the generative artificial intelligence boom started by ChatGPT. However, Wall Street analysts are less than optimistic, despite Palantir's increasingly strong position in artificial intelligence software. The stock carries a median 12-month price target of $28 per share, implying 12% downside from its current share price of $32. Here's what investors should know. Palantir is a recognized leader in artificial intelligence platforms Palantir specializes in data analytics. Its platform lets businesses collect data, develop machine learning models, and integrate those digital assets into an ontology. The Palantir ontology defines the relationship between those assets and real-world objects, and it lets users surface information through analytical applications that improve decision-making. Management says its ontology-based architecture is its key differentiator. The Palantir platform comprises several software products. Foundry is used for data processing and analytics, AIP (Artificial Intelligence Platform) lets customers use large language models and generative artificial intelligence within Foundry, and Apollo ensures Foundry is consistently updated across all IT environments. Palantir also provides an alternative to Foundry (called Gotham) originally designed for sensitive government data. Forrester Research recently recognized Palantir as a leader in artificial intelligence and machine learning platforms. "Palantir is quietly becoming one of the largest players in this market," analysts wrote. Palantir received the highest score for its current product offering, but three competitors -- Alphabet, Databricks, and C3.ai -- received higher scores for their product development strategy. Palantir's revenue growth continued to accelerate in the second quarter Palantir reported solid financial results in the second quarter, beating estimates on the top and bottom lines. Revenue increased 27% to $678 million, marking the fifth consecutive sequential acceleration in sales growth. Meanwhile, non-GAAP net income increased 80% to $0.09 per diluted share. Additionally, Management guided for 25% to 26% revenue growth in the third quarter, comfortably topping the 22% growth analysts anticipated. "The persistent and unbridled demand for our software, for an effective enterprise platform that makes artificial intelligence capabilities useful to large institutions, shows no signs of relenting," CEO Alex Karp wrote in his latest shareholder letter. Palantir stock trades at an outrageous valuation Looking ahead, Wall Street expects Palantir's adjusted earnings to increase at 22% annually through 2025. Without additional context, that estimate sounds pretty good. However, Palantir shares currently trade at 100 times adjusted earnings, an outrageous multiple in context. Those figures give a PEG ratio of 4.5. For perspective, Nvidia currently trades at 47 times adjusted earnings and Wall Street expects its bottom line to grow at 49% annually over the next six quarters, which is the same timeframe I quoted for Palantir. Those figures give a PEG ratio slightly below 1. Here's what that means: If the market afforded Palantir the same PEG multiple it affords Nvidia, Palantir stock would plunge 30%. Personally, I would avoid the stock until it trades at a more reasonable valuation. That does not mean Palantir shares will nosedive tomorrow. The stock could continue climbing higher in the near term. But without a dramatic acceleration in earnings, I think shares are headed toward a sharp correction at some point in the future

Watch These Palantir Price Levels as Stock Jumps on S&P 500 Inclusion

Investors should monitor key overhead chart levels in Palantir shares at $32.70 and $34.75, while eyeing important retracement levels at $29 and $25.50. Palantir Technologies (PLTR) shares jumped in premarket trading Monday after S&P Global announced late Friday that the big data analytics software company will join the benchmark S&P 500 index, with the inclusions taking effect before the market opens on Sept. 23. The Denver-based company's stock, which has nearly doubled over the past twelve months through Friday's close, has been on investors' radar as a possible contender to gain a coveted inclusion in the blue-chip index this year as its artificial intelligence (AI) software offerings continue to drive profits. To join the S&P 500, a company must have reported a profit in its latest quarter and have cumulative profit over the four most recent quarters, requirements the software maker easily satisfies after reporting a profit in the past seven consecutive quarters, with its latest quarterly profit representing the largest in its twenty-year history. Palantir shares were up 7.8% at $32.69 about 90 minutes before Monday's opening bell. Below, we'll take a closer look at what the technicals on Palantir's chart are saying and point out important price levels that investors should to watch out for. August Bear Trap Palantir shares broke out from an ascending triangle in early July before temporarily falling below the patten during the early August broad market selloff. However, the stock promptly reclaimed the triangle's top trendline, climbing to a new multi-year high in the process. The move formed a bear trap, a chart pattern that lures investors into selling or entering short positions before the market makes a prompt recovery. Looking ahead, investors should monitor several key price levels on Palantir's chart that will likely gain attention. Key Overhead Price Levels to Watch The first sits around $32.70, roughly in line with Monday's projected opening price. This area on the chart could provide resistance near a range of similar trading levels positioned around last month's high. A close above this level could see the shares make a move up to the $34.75 region. We project this target using the measuring principle technique, which calculates the distance between the ascending triangle's two trendlines in points and adds that amount to the pattern's top trendline. ($9.25 + $25.50 = $34.75). Retracement Levels to Watch A pullback in the stock would likely encounter initial support near $29, a location on the chart where the price finds a confluence of support from a horizontal line linking a range of consolidation around the July high with the upward sloping 50-day moving average (MA). Further share price weakness could lead to a retest of the key $25.50 level, where investors would likely seek entry points near the ascending triangle's top trendline. Such a move would represent a 16% decline from Friday's closing price. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.