The S&P 500 (SNPINDEX: ^GSPC) is regarded by many as the best overall gauge of the U.S. stock market, as it includes the 500 largest publicly traded companies in the country. Given the breadth of businesses that make up the index, it is considered to be the most reliable benchmark of overall stock market performance. To be considered for admission to the S&P 500, a company must meet the following criteria:
Be a U.S.-based company
Have a market cap of at least $18 billion
Be highly liquid
At least 50% of its outstanding shares must be available for trading
Must be profitable based on generally accepted accounting principles (GAAP) in the most recent quarter
Must be profitable during the preceding four quarters combined
Palantir Technologies (NYSE: PLTR) is one of the most recent additions to the S&P 500, joining the benchmark on Sept. 23. That makes it one of only 11 companies to make the cut so far this year. Since the dawn of generative AI early last year, Palantir stock has surged 845%, as its expertise in the field drove robust revenue and earnings growth.
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Given the stock’s parabolic move higher, some investors are leery of Palantir’s lofty valuation. However, one Wall Street analyst believes this is just the beginning. Let’s take a look at what has fueled Palantir’s epic run, and if there’s additional runway ahead for growth.
Image source: Getty Images.
Palantir has been developing cutting-edge AI solutions for more than two decades. The company earned its pedigree devising sophisticated algorithms to serve the U.S. intelligence, military, and law enforcement communities. Its systems developed the uncanny ability to connect seemingly unrelated data to foil terrorist plots and bring wrongdoers to justice.
The company has expanded beyond its humble roots, bringing the same data mining know-how to enterprise. Palantir’s AI and analytics systems dig through data and provide companies with solutions to real-world problems.
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