Palantir Technologies’ stock has gained over 300% this year, with the company expected to be added to the Nasdaq-100 index on December 13. While this milestone could lead to a short-term price increase, investors should consider the company’s growth outlook, Wall Street’s opinion, and valuation before making a decision.
Palantir’s growth is driven by its Artificial Intelligence Platform (AIP), which has become a game-changing product development for the company. Analysts including Dan Ives of Wedbush Securities and Mariana Pérez Mora of Bank of America remain bullish on the stock. However, concerns surround the company’s valuation, with a price-to-sales multiple of 63.5 and a forward price-to-earnings ratio of 149.
To put this in perspective, Palantir’s valuation is higher than many other growth stocks. Historically, such high valuations have led to pullbacks sooner rather than later. Nevertheless, if the company can maintain its momentum and continue growing, it could lead to further gains.
Given the uncertainty surrounding Palantir’s stock, investors may want to consider a dollar-cost averaging strategy over a long-term horizon. This approach involves investing a fixed amount of money at regular intervals, regardless of the market’s performance. By doing so, investors can reduce their exposure to market volatility and potentially benefit from the company’s growth.
Ultimately, whether or not Palantir stock is a good buy depends on individual investment goals and risk tolerance. As with any investment, it’s essential to weigh the pros and cons and make an informed decision.
Source: https://finance.yahoo.com/news/buy-palantir-stock-dec-13-233000447.html