PLTR: Buy Now for S&P 500 Boost?
S&P 500 Index.
The $S&P 500(.SPX)$ index comprises of the 500 biggest companies in the US.
It is considered to be a reference point for overall health of US market, showing how the world's largest businesses are performing.
For a company, getting inducted into the S&P 500 is a big milestone because it represents major validation for a company and its business.
Eligibility requirements for inclusion into the index are no small feat.
$Palantir Technologies Inc.(PLTR)$, a subject matter expert in Artificial Intelligence (AI) has been eligible for S&P 500 inclusion for quite some time.
For reasons unknown, it has not been shortlisted yet.
The next S&P 500 rebalancing will take place in June 2024.
This is where new companies might be added to the index and/or existing company removed.
Taking the timeline into consideration, is it time to add Palantir to your holdings?
S&P 500 Inclusion Requirements.
Factors that determine a company's eligibility include:
Exchange stock is listed on.
Company’s market capitalization.
Public float.
Track record.
Profitability.
A company's trailing-12-month (TTM) earnings is regarded the most important criterion and must be positive. (see below)
Chart shows Palantir's profit according to standard accounting rules (GAAP).
Spanning Q4 2022 to Q4 2023.
Importantly, Palantir’s earnings have been positive for the last 5 consecutive quarters.
With last 3 quarters performing consistently better than the previous quarter.
Time To Buy PLTR?
If Palantir receives inclusion in the S&P 500, quite certain its stock price will rise.
This is because it puts Palantir on the radar of more institutional investors.
Coverage from investment banks and interest from hedge funds will likely increase.
For the record,
When it was announced that $Tesla Motors(TSLA)$ would be included in the S&P 500 index, its stock price shot up by +10.19%.
On the day of actual inclusion, Tesla stock price rose by a further +5.96%.
Not counting that Tesla's stock price had already been going up gradually between the two events..
Palantir - Emerging AI superstar?
One of the biggest themes rallying US market in 2023 was Artificial Intelligence (AI).
While many were captivated by the progress of "Magnificent 7" Microsoft, Alphabet, Amazon, Nvidia, Tesla, Meta Platforms, and Apple, many other companies have surfaced as formidable disruptors in the AI realm.
In April 2023, Palantir became a bigger AI with the launch of their new software, the Palantir Artificial Intelligence Platform (AIP).
Since the launch, customers have publicly showcased how AIP has impacted their business -- providing customers with a preview of the number of use cases Palantir's products cover.
It's position in AI realm has not gone unnoticed.
The stock is up nearly +170% over the last year and trades at 23.5 price-to-sales (P/S) -- a premium compared to other software-as-a-service (SaaS) businesses.
My viewpoints : (mine & mine only)
PLTR is a compelling, long-term buy.
So far, PLTR’s consistent profitability helps it to stand out amongst high growth SaaS stocks.
Quietly optimistic of further revenue growth on its AIP product, that is flexible to partner with other leading AI apps and cloud developers.
At $21.90 (as of 16 Apr 2024), it is not cheap.
It is believed that Palantir will continue to do well in the long run as artificial intelligence becomes more important.
On its own, PLTR is a great opportunity, in the fast-growing & competitive AI field.
Regardless whether PLTR is inducted into the S&P 500, PLTR is a a strong company with a bright future because of its core business.
Consider “buy the dip” on dollar cost average (dca) basis to benefit from this long-term growth stock.!
Must Read: Click on below titles to access. Give a like & help to Repost ok. Thanks.
Do you think Palantir is a good stock to add to your holdings?
Do you think Palantir will be included in the S&P 500 index this June 2024?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Pls help to "Re-post". Tks! Rating is important (to me).
Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!