Prediction: Palantir Stock Could Hit $100 By Year-End (but There's a Catch) – Yahoo Finance
Artificial intelligence (AI) once again dominated investment themes in 2024. 2023 was all about the “Magnificent Seven” stocks. Nvidia, microsoft, apple, Amazon, alphabet, teslaand meta platform2024 was further influenced by a small number of new players competing for parity with the big tech companies.
In my eyes, no other emerging technology company is attracting as much attention as enterprise software platforms. Palantir Technologies(NASDAQ:PLTR) You can get it this year. As of this writing, Palantir stock is up 380% year-to-date in 2024, making it the world's best-performing stock. S&P500 so far.
Palantir stock is currently trading at around $82. Below, we break down Palantir's incredible rise and explain how the stock price can continue to rise and possibly reach $100 per share by the end of the year. But more important than this stock's short-term potential is outlining whether now is the best time to invest in Palantir long-term.
I'll admit that Palantir has earned its moment in the spotlight. This year alone, the company Number of strategic partnerships With the most influential companies in the technology world, including Microsoft oracleAmazon, Meta, Defense Consulting Company booze allen hamilton.
In addition, the company gained inclusion in the S&P 500; Nasdaq-100 Indexing is an enviable milestone for any company.
The launch of Palantir's Artificial Intelligence Platform (AIP) software suite in April 2023 was reinforced by margin expansion and a shift to consistently positive net income, steadily increasing in both the private and public sectors. Directly correlated with accelerating returns.
Overall, 2024 was a milestone year for Palantir in many ways. As an investor myself, I am very happy. Still, while I'm bullish on the company's long-term potential in the AI space, investors should take a hard look at the valuation metrics before doubling down on the stock.
Image source: Getty Images.
The graph below shows Palantir's stock price in 2024. Surprisingly, the stock price has remained quite stable for most of the year, after rising slightly during January and February. It wasn't until the summer that Palantir stock actually started showing consistent gains. Additionally, the stock really kicked into a new gear in early November following an impressive third-quarter earnings report.
While I believe Palantir stock deserves a premium over other AI software stocks, the valuation multiples below illustrate how out of control things are from an investment perspective.
Simply put, paying 170 times future earnings for a company that grows 30% is disconnected from reality. Additionally, if the PEG ratio is greater than 1, the stock is generally overvalued and its price (market capitalization) is accelerating much faster than expected earnings per share growth over the next few years. Indicates that Palantir's PEG ratio is over 3x, indicating a highly expanded valuation at this point.
Just recently, financial news anchor Jim Cramer posted the following thoughts on X (formerly Twitter).
I tend to think of Jim Cramer as more of an entertainer, but I have to admit that I agree with his analysis here.
Can Palantir reach $100 per share by the end of the year? perhaps. But as Kramer subtly hints, there are clearly plenty of dedicated retail and meme investors currently fueling the Palantir hype. The stock is rising at an unprecedented pace, nearly mimicking Nvidia's rise over the past two years.
At this point, I view Palantir as a momentum investment fueled by day traders. I think it's possible the stock will reach $100 sooner rather than later, but it's also possible that there will be a big sell-off soon after, leaving many unsuspecting investors holding the bag at the worst possible time. I think it's possible.
As a long-term investor, I would like to find a more reasonable price that aligns with the fundamentals of Palantir's business.
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Suzanne Frey, an Alphabet executive, is a member of the Motley Fool's board of directors. Randi Zuckerberg is a former Facebook director of market development and spokesperson, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. adam spatacco We have positions at Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, Palantir Technologies, and Tesla. The Motley Fool recommends Booz Allen Hamilton and recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has Disclosure policy.
