The Truth Behind Palantir Stock's S&P 500 Entry | PLTR Stock Analysis

it's a new Industrial Revolution this is historic moment internet mobile and now ai nvidia's Jensen Wong said the next industrial revolution has begun who will be the winners well come talk to our 70 customers they think they're [Music] winning paler stock a fired up wealth favorite is being added to the S&P 500 September 23rd is paler a buy a whole so or a cell so a total of six changes here paler Dell and Eerie Insurance are being added to the S&P 500 the deletions include American Airlines Etsy and biorad now in the past 5 days the stock ripped off this news you can see it's up 12.52% when the Market's really been selling off and quite volatile over that time year to date the stock is up 107% over the past year 117% and over the past 5 years 273 now what is d iink of course take this with a grain of salt he is a perable but he says this was a moment that paler investors have been anxiously waiting for over the past year as the profitability profile of this story has significantly been bolstered with another validation moment for the paler story We Believe many Skeptics of paler have underestimated the profitability and cash flow potential of this name with AIP of course if you follow this channel AIP is artificial intelligence platform and paler part of what we call phase two two for Enterprise generative AI phase one is infrastructure phase two is taking the infrastructure of the LMS and making use of those LMS with corporate data Ives is saying he believes this is the beginning of a multi-year cycle for paler which will continue generating significant deal flow on the back of AIP of course you know that I'm bullish on pal here as well but when you're talking about buying or trimming valuation does matter so we're going to look at valuation later I want to go through a few things that are important to understand where Palante tier just might go now what's really interesting about this if you look at 1995 to 1999 an inclusion outperform the index by 8.3 percentage points but as you can see this has diminished over time to the point where it's basically flat and with that said specific stocks especially cult stocks that have a strong retail following it's a different story and Tesla was a great example it's important to note here that Ives has an outperform on pounds here with a price target of $38 and this is just from a few days ago and it says it Remains the street High hold your horses cuz Bank of America has come to town with a new Street High raising their price Target from $3 to $50 per share Bank of America calls this a watershed moment and anticipates more institutional investors now why would there be a jump in more institutional investors the reason is is when a stock is added to the s&p500 it tends to see not jumping the share price but the reason is simple the S&P 500 Index Fund managers must now all buy the stock which raises interest and helps push the stock price higher and as you know pound here ripped over 133% in one trading session on this news again though a lot of that has to do with the fact that it's already a retail name it's a favorite among individual investors like me and you in fact I had multiple texts from friends and family saying hey should I buy paler here at $3 $34 a share because it's going in the S&P 500 is it going to go higher this is helpful let's look at some history here Tesla so it was included in the S&P 500 December 21st 2020 Tesla stock ripped into this news so you can see December 2020 it was a $235 stock rewind a year earlier December 2019 it was a $27 stock so it ripped from that $235 on the inclusion date after a little bit of a selloff it ripped all the way up here November 2021 it was a $381 stock it dropped from 381 all the way down down to $123 basically a year later so look at this one more time December of 2019 2789 a year later 235 around another year later 381 and then a year after that 123 and it closed last December 2023 at 248 and today it's $223 now it's still up 1,265 in the past 5 years but when you bought the stock it matters a lot now as you know with cloud and SAS companies we like to look at specific metrics to compare those companies to their peers so that evtm Revenue which you're familiar with if you watch this channel for paler it's just under a 25x now that's the highest for any Cloud SAS name in fact the second highest is the trade desk which you might not generally put In This Cloud SAS Arena and that's trading at an 18x EVN TM Revenue next is Sam Sara the ticker is iot 17.3 X Cloud flare 14.1x service now 13.6x proud strike 13.4 data dog 12.2 and zscaler only 8.6x on the EVN CM Revenue so paler is the king of that list and the most expensive stock for a number of years for two years or so it was Snowflake and then of course crowd strike and crowd strike lost its Crown because of the outage now the free cash flow percentage for paler is 28% which is solid number rule of 40 which you want over 40 is a 49% which is good and that net dollar retention is 114% when you look at profitability it rocks an A minus on Seeking Alpha now because it's software and it's software is a service it does have that high gross profit margin 81.3 n% and the growth is solid around 20% not magnificent growth but solid growth somebody asked me in Discord today is pal here a Spec stock or a grow stock well it's profitable it's headed into the S&P 500 so it's definitely not in the spec Arena not really in the hypergrowth arena because 20% wouldn't be hypergrowth so this is more of just a regular growth you think of that Spectrum from spec to hyper growth growth to mature growth this would be in the growth area now valuation we talked about those Cloud metrics but on Seeking Alpha we'll look at those standard metrics so that Ford PE Gap is 187 which of course is expensive and the Ford price to sales is a 28.22 very expensive now I want to come on here and I want to tell you hey paler is going to go to $50 next week buy a bunch more shares I really want to tell you that but the thing is is that's just not reality now the market does crazy things both directions and stocks go way higher than they should in the upside and they go lower than you think they will in the downside now of course you never want to buy off analyst price targets we already talked about a $38 and a $50 price Target let's look at some additional price targets here on tip ranks so the highest price Target is at Bank of America $50 the lowest is $9 the average is $278 it's trading at 34 right now so that represents a 21.4 7% downside from here now I'm not saying necessarily that it's going to drop 20% but I think it's good for you as the investor to have this information it shouldn't make you buy or sell just off those price targets it gives you an idea of the sentiment now if you're familiar with the PayPal Mafia and Peter Peter the teal Peter teal Peter teal bro what can I say now this is really interesting cuz if you're familiar with the PayPal Mafia and Peter teal being one of the large share holders a pounds here he's looking to sell a billion dollars in the stock this is according to baren initially made a disclosure in August via's investment vehicle but essentially adopted a rule on May 15th that would allow for the sale of approximately 28.6 million shares of pounds here by December 31st 2025 so it doesn't mean it necessarily has to happen or this many shares have to sell but it's a possibility I always love the comments be mostly they're entertainment to me honestly I'm not trying to bash anybody but I I just I really enjoy reading these comments some good information sometimes but most of the time it's just raw entertainment for me a nonevent okay so selling a billion dollars non-event I mean obviously the guy has a lot of money and you might say a billion dollars not a big deal just like you have a retirement pension or 401K you know people trying to explain now generally people that are going to write stuff like this they're the ones that own a ton of shares and they're basically completely blinded thinking that the Stock's just going to go up every day for the rest of their lives and it's going to make them rich try to do my best to bring information to you guys in a neutral Manner and not be biased and not just say yeah I'm a bowl in this so it's going to go up forever here's the deal I'm going to tell you my thoughts here in a second of what I think but first let's look at a chart I'll show you some possibilities and then I'll share the commentary of what I'm going to do with the shares that I own when I was in Hawaii I did a video and I said hey Nvidia and paler they're buys now at these levels now I got some heat on that paler at the time was in the low 20s and now it's $34 a share I said broke 23 look for 25 27 and 30 and now we're sitting almost at $35 a share now the R2 on this is $35.96 and the R3 is all the way up here at $451 what's crazy about it in early August when we had that sell off it got down to $21.22 so this has ripped $14 in about a month the moment of truth is p your stock a buy a trim or just sell it all so I a th000 shares in my main that $2 million plus taxable brokerage and I'm looking to sell 200 shares just trim it so I'm going to keep 800 shares I'm going to trim 200 shares at $37.79 now I might adjust that price Target especially seeing that r340 and seeing price targets like $50 from Bank of America but I do think somewhere in that 37 to $40 $41 you're probably going to see some resistance at some point and sell off if you if remember Tesla when it went the S&P 500 had this huge run up and then it traded down and eventually it'll probably happen with pal here as well if you're new here and want to be a better investor smash that subscribe button if this video is helpful drop me a like drop me a comment have a great rest of your day take care