PLTR will BOOM! with switch to NASDAQ ?
Not Too Long Ago.
It wasn’t too long ago that $Palantir Technologies Inc.(PLTR)$ finally earned its birth rights and joined the S&P 500 index on Mon, 23 Sep 2024 after a few rounds of missed selection opportunities. (see below)
Since its inclusion, PLTR has seen its stock price soared by a fantastic +55.94% between 23 Sep 2024 and 14 Nov 2024; just short of 2 months upon inclusion. (see below)
Oops, I Did It Again !
On Thu, 14 Nov 2023, PLTR made yet another ‘good surprise’ announcement.
This time the #1 AI software provider announced after market close that it will transfer the listing of its Class A common stock from the New York Stock Exchange to the Nasdaq Global Select Market.
Palantir said it expects to begin trading as a Nasdaq-listed company on Tue, 26 Nov 2024, under the same ticker symbol "PLTR".
Upon transfer, Palantir anticipates it will meet the eligibility requirements for the $NASDAQ 100(NDX)$ index.
What Is Nasdaq-100 ?
The Nasdaq 100 Index is a modified capitalization-weighted index that tracks 100 of the largest non-financial companies listed on the Nasdaq Stock Market.
It is considered a leading indicator of the US technology sector's performance.
Benefits / Advantages.
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Enhanced Trading Flexibility and Visibility: Nasdaq is known for its advanced trading platforms and technology, that can potentially offer improved trading liquidity and execution for PLTR's stock. This could lead to tighter bid-ask spreads and lower transaction costs for investors and in the process, significantly increase PLTR's visibility to a wider range of investors — domestic & international.
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Enhanced Liquidity: The index is widely tracked by institutional investors and traders, leading to increased trading volume and liquidity for PLTR.
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Higher Valuation Potential: Inclusion can signal to the market that PLTR is a high-growth, innovative company with strong fundamentals. This can lead to a higher valuation for the company's stock.
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Eligibility for Index Funds and ETFs: Many index funds and exchange-traded funds (ETFs) track the Nasdaq 100 Index. Inclusion in the index can make a company's stock more accessible to investors who invest in these funds and ETFs.
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Alignment with Technology Sector: As a technology company, PLTR's latest move to Nasdaq aligns it more closely with its peers and the broader technology sector. This can enhance the company's brand perception and attract investors who specialize in technology stocks.
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Improved Reputation: Being part of the Nasdaq 100 Index can enhance PLTR's reputation and brand image, as it is associated with other leading technology companies.
No need to wonder aloud (now) as to why PLTR made the strategic alignment.
PLTR Overall
Palantir has been one of the hottest stocks of 2024, having gained approximately +245% YTD, driven by the company's positioning in the AI space.
Palantir shares really took off at the beginning of November 2024 after the company reported strong quarterly results driven by "unrelenting" AI demand. (see above)
Revenue jumped +30% YoY on continued strength in the US customer count that grew +39% YoY after PLTR closed 104 deals worth over $1 million during the quarter.
In a newsletter, Palantir, CEO, Alex Karp told shareholders :
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Growth of PLTR’s business is accelerating, and its financial performance is exceeding expectations.
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This comes as PLTR meet an unwavering demand for the most advanced artificial intelligence technologies from both US government and commercial customers.
According to Benzinga Pro, Palantir shares were up +3.87% in after-hours, trading at $61.47 at the time of writing. Wow !
Why Switch ?
The decision for a company to list on a specific exchange is a complex one, influenced by various factors, including (a) company size, (b) industry, (c) investor base, and (d) strategic goals.
US SEC does not directly "promote" a company to a particular exchange, it does set the rules and regulations that govern stock listings.
For Palantir, several factors likely influenced the timing of their transfer decision:
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Company Growth and Maturity: As PLTR has grown and matured, it may have become more attractive to a broader range of investors, including those who prefer technology-focused exchanges like Nasdaq.
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Investor Base: Palantir may have identified a growing interest from technology-focused investors, who are more likely to be active on Nasdaq.
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Market Trends: The increasing importance of technology & data analytics in recent years may have made Nasdaq a more appealing option for it.
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Strategic Considerations: Palantir may have strategic reasons for wanting to be listed on Nasdaq, such as potential acquisitions, partnerships, or other corporate actions that might be facilitated by being on that exchange.
My viewpoints : (mine only)
I have researched and listed all possible benefits in:
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Switching from S&P 500 index to Nasdaq.
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Getting selected for inclusion in the Nasdaq-100 index.
It is in plain sight that overall, Palantir's decision to transfer is a strategic move that could benefit the company and its investors in the long term.
The ‘immediate’ positive market reaction reflects the market's optimism about the potential benefits of this move. (see below)
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PLTR ended Thu, 14 Nov 2024 at $59.18, that was a YTD gain of +256.94%.
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Post Nasdaq migration announcement, PLTR’s future stock price (for Friday) is poised to open at $61.23.
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By the time, US market called it a week, PLTR was at a new high of $65.77.
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Its post trading price was an even higher price of $66.46. Wow right !
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Comparatively speaking, PLTR has performed “better” than Nasdaq index.
Technically, based on PLTR’s thursday closing price, its immediate two resistant price level are (a) $60.72 and (b) $62.27. Now that the resistant price have been breached, now is not the time to take profit, right ?
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Do you think it was a smart move by PLTR’s management to request for the transfer ?
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Do you think PLTR will move steadily up its value chain - slowly but surely ?
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