New Target Price for Palantir as it Seeks Major Boost From Nasdaq 100
Management for the big data investor darling is "actively pursuing" broader appeal and better stock prices for investors.
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Stand up and be counted
For what you are about to receive
We are the dealers
We'll give you everything you need
Hail-hail to the good times
Palantir's rock has got the right of way
We ain't no legend, ain't no cause
We're just living for today
For those about to rock,
We salute you....
- "For Those About to Rock" Johnson, A. Young, M. Young (AC/DC), 1981 (with a change)
Trusted!
On Tuesday morning, long-time Sarge favorite and core "Stocks Under $10" holding Palantir Technologies PLTR announced that the cloud computing/big data/AI-focused software company and its entire suite of products/programs had been granted FedRAMP High Authorization.
FedRAMP, for the new kids, is a program that promotes the adoption of secure cloud services providers at the federal level. This authorization allows the federal government in the U.S. to process sensitive unclassified workloads on Palantir's platforms.
On being granted this level of trust by the federal government, CTO Akash Jain commented, "Palantir is excited to accelerate our work with other technology partners — big and small, government or commercial — to enable their technology to be securely operated on behalf of USG (U.S. Government) missions."
The stock, PLTR, gained 6.88% on Tuesday on this news. Or was it really all on this news?
Don't Forget
As of Tuesday afternoon, PLTR is the top-performing stock for both the current quarter and for the full calendar year in the S&P 500. Readers will recall that PLTR was added to the S&P 500 back in September. The stock is up a mere 235% over the past 12 months. Readers likely also need not be reminded that Palantir Technologies picked up its listing at 11 Wall Street (The New York Stock Exchange) last week and took the "two train" from Trinity Church up to Times Square, where, with a tip of the cap to the fighting chaplain, Father Duffy, the firm entered into the Nasdaq building and re-domiciled that listing.
What Does That Mean?
That means that Palantir management is actively pursuing broader appeal and better stock prices for its shareholders. Whether this is being done for the brass (largest holders) or for Joe and Jane Diamondhands is neither here nor there. Our job as investors/traders is to actively adapt to and excel in any environment. So, take profits now? Kids, I'm sitting on a 12-bagger at this point and I'm not, outside of taking something small off at target prices as a means of putting my lifelong disciplines into practice.
I do like the mercenary attitude, though, shown by corporate leadership. Once aboard the S&P 500, the New York Stock Exchange had, in Palantir's opinion, served its purpose. Being listed at the Nasdaq makes PLTR eligible for inclusion in the Nasdaq 100. The S&P 500 is tracked by a rough $16 trillion in terms of funds benchmarked to the index. The Nasdaq 100 is composed of the 100 largest non-financial firms listed at the Nasdaq. This index is also broadly tracked. The Invesco QQQ Trust QQQ alone manages a rough $300 billion in assets.
By gaining admittance to these indices, Palantir or any firm for that matter benefits from a certain level of mandated institutional investment by passive funds designed to track index performance.
When Does Santa Palantir Arrive?
Additions to and deletions from the Nasdaq 100 will be announced a week from this Friday, on December 13. Will Palantir be added? Nothing is guaranteed in life, but one might think,a At a market cap of $161 billion, not only is it hard to believe that PLTR was a "stock under $10" core portfolio member but it is significantly larger than many names already in the Nasdaq 100 as well as other names being discussed as potential additions.
Other contenders being mentioned for possible addition to the S&P 500 include MicroStrategy MSTR, Interactive Brokers IBKR and Coinbase Global COIN. Those three firms currently bear market caps of $87 billion, $80 billion and $77 billion, respectively. Not only is PLTR much larger than these firms, would IBKR and COIN not be considered financial stocks?
Stocks already in the Nasdaq 100 that might be looking over their shoulders could be Moderna MRNA, Super Micro Computer SMCI and Biogen BIIB. Those three companies currently run with market caps of $16 billion, $23 billion and $23 billion, respectively. At last year's December rebalancing for the Nasdaq 100, seven stocks were added and seven were deleted.
Wall Street
Over the past two weeks, five-star rated (by TipRanks) analyst Mariana Perez Mora of Bank of America has reiterated her "buy" rating while increasing her target price from $50 to $75, while four-star rated Dan Ives of Wedbush also reiterated his "buy" rating, lifting his target from $57 to $75. The stock is already closing in on these "new" target prices. On the other side of the token, Brent Thill of Jefferies, who is now rated at four stars after being rated much lower than that (so, nice job, Brent), reiterated his outright "sell" rating on the stock and his $28 target price. Sorry Brent, maybe someday, but not soon.
Trading
Readers will see that PLTR broke out of our Andrews' pitchfork model in early November that left an unfilled gap that would require a $41 print to fill. The stock found support atop the upper trendline in mid-November and then took off again on this Nasdaq 100 speculation. The stock is trading well above all of its key moving averages, more than double its 200-day SMA. That's incredible. The company has one of the strongest balance sheets I've ever seen, but is still 151-times forward-looking earnings.
Some folks will take profits, but not until after the Nasdaq 100 story plays out. Some of those doing so will be insiders, so do not get blindsided. I am not saying anyone has to sell any, but there will be give and take, sooner or later. I am a long-term generational believer in this name. I am thinking of my children and their children with this name, so I am not likely to cut and run, but wear your helmets and keep your heads on a swivel.
Palantir Technologies (PLTR)
New Target Price: $90 (High on Wall Street)
Pivot: Rising pitchfork upper trend line
Add: Between the 21-day EMA and 50-day SMA
Panic: On loss of the 50-day SMA.
At the time of publication, Guilfoyle was long PLTR equity.
