Palantir Technologies will join the NASDAQ 100 on December 23 with two other stocks MicroStrategy and Axon. On December 13, NASDAQ announced the three hottest stocks that will join the index by this month. However, Palantir stocks didn’t show much difference after the announcement but MicroStrategy and Axon rose significantly.
NASDAQ 100 is removing three of its smallest members, which are Moderna, Super Microcomputer, and Illumina. As per the Bloomberg report, Moderna and Illumina stocks have fallen slightly and have been doing lower trade since 2021. While SMCI stocks dropped more than 10% on December 13, way before the news of the NASDAQ 100 rebalancing.
Palantir Makes Its Big Move: Joining the NASDAQ-100
On December 13, after the market closed, the Nasdaq announced its annual rebalancing, adding Palantir Technologies (NASDAQ: PLTR) to the Nasdaq-100, effective before the market opens on December 23. Palantir’s stock has skyrocketed by 1,090% since the rise of generative AI last year, thanks to its years of expertise in AI, which made it a top choice for AI solutions and likely helped it secure a spot in the index.
Despite this impressive surge, some investors are hesitant to buy, concerned about its high valuation. However, one Wall Street analyst thinks this view is short-sighted. Let’s take a closer look at what drove Palantir’s recent growth and whether there’s more potential for the stock.
Palantir’s Growth in 2024
When AI took off early last year, businesses rushed to find solutions, and Palantir quickly responded by developing a versatile tool—its Artificial Intelligence Platform (AIP). AIP connects AI to a company’s operational data, delivering real-time, tailored solutions for real-world challenges.
To bridge the knowledge gap many companies face, Palantir set up boot camps where customers work directly with their engineers to create these custom solutions. This approach has paid off, as shown in Palantir’s strong financial results, removing the biggest barrier for businesses looking to adopt AI.
Palantir’s Stock Surge in 2024
In the third quarter, Palantir brought in $726 million in revenue, a 30% increase compared to last year and a 7% rise from the previous quarter. At the same time, its earnings per share (EPS) jumped 100% to $0.06, marking the eighth straight quarter of profitability. While that’s impressive, it’s just part of the story.
Palantir’s U.S. commercial segment, which includes much of its AIP revenue, grew 54% year over year, pushing its remaining deal value (similar to a backlog) up by 73%. When the backlog grows faster than revenue, it signals strong future potential. The segment also saw a 77% jump in the number of customers.
