This year, everyone is focused on one theme and one theme only: the of the technology sector role in the development and adaptation of artificial intelligence. While there have been some clear winners Semiconductor industry As key proponents of this new technology, others in various verticals have also won the market’s affection through price action.
Palantir Technology Today
(as of 12/31/2024 05:50 PM ET)
- 52-week range
- $15.66
▼
$84.80
- P/E ratio
- 378.17
- Price target
- $41.00
Artificial intelligence has a role to play in one of these verticals Cyber securityA growing concern among many businesses and management teams as more and more information (confidential at that) is uploaded and placed online. This theme is likely not going away anytime soon, especially as the global economy becomes more digitized every day. With that in mind, it shouldn’t surprise investors to see the shares Palantir Technologies Inc. NASDAQ: PLTR Dominate 2024.
Some people out there who follow the value investing bible to the letter would say that Planter stock’s valuation multiple makes it an expensive stock today. Others, in tune with the short-term nature of the stock market, will say that the so-called “popularity contest” is being won by Palantir and that its value proposition to customers and its theme make it expensive. The truth is that the stock is going up now while it is Added to the Nasdaq-100 index.
What an addition to the Nasdaq-100 index means for Palantir stock
The short answer is additional bullish price action, and the long answer is the explanation behind said price action. When a stock is added to an index, such as the NASDAQ or the New York Stock Exchange (NYSE), various investment funds are required to allocate a certain percentage of their investable assets to this stock.
That’s why some expect Palantir stock to continue hitting new highs. In fact, the Nasdaq-100 addition would be a virtuous cycle that would complete itself. how so? While some investment funds are responsible for adding millions, if not billions, to the value of Palantir stock, other investors will look to institutional capital flows.
When word and sentiment spread, that’s when financial news outlets will relay the message to Main Street, where social media will do what it does best, and that’s promoting hot and interesting information. This positive effect could make Palantir stock value today at a 50.9x price-to-book (P/B) ratio over the next 12 months.
Palantir Technologies Inc. for Wednesday, January 1, 2025 (PLTR) price chart
Some say shares NVIDIA Co. NASDAQ: NVDA Expensive in 2023, when the stock traded at around 40.0x P/B, and decided to wait for a more favorable price if the stock ever pulls back. Worse, some even went so far as to short the stock altogether. Well, the outcome was not good for either of these parties.
NVIDIA has increased its valuation sixfold to 2023 and is now trading at a P/B multiple of 52.0x which appears to be a comfortable valuation for most of the market. The lesson here is that investors should not be afraid to pay a premium for companies that justify and earn them.
What Wall Street Sees for Palantir Stock
Investors should not be afraid to look at A A consensus price target of just $41 per share Today for Plantir stock, that calls for a halving of where the stock currently trades. Analysts have to be very careful when rating and valuing companies, because their reputations—and careers—are on the line when they do so.
However, occasionally, some are willing to take the risk in exchange for the reward of being right, such as analysts at UBS Group. These analysts began coverage on Palantir stock through December 2024 and decided to initiate an exit with a company valuation of $80 per share.
This target would imply that today’s valuation is considered a fair price for Palantir stock, but here’s what could actually happen. As institutional capital flows into Palantir stock and Wall Street analysts take note of UBS Group’s initiative, rising analyst confidence could soon fuel revisions to price targets.
Moreover, Palantir stock holdings from State Street are up 96.4% through November 2024. This institutional investor jumped ahead of the Nasdaq-100 addition curve and ended the year at a Net $3.1 billion position for a 3.7% ownership in the company.
All of these factors make a strong buy case for most investors, as both momentum, fundamentals and sentiment put Plantir stock on a strong path to dominate in 2025 as it did in 2024.
Before you consider Palantir Technologies, you may want to hear this.
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