Perhaps unsurprisingly, given the strength of the technology sector, 2024 has been remarkable for Palantir (NASDAQ: PLTR).
The positive trend was especially strong in the second half of the year, as PLTR shares enjoyed a gust of tailwinds after a gust of tailwinds, eventually reaching their January 2, 2025 price of $73.51, for a total 379.68% climb since the first session of 2024.
Indeed, Palantir shares have appreciated so much that a $1,000 investment made on last year’s first session when the stock was changing hands at about $16 would have grown to $4,594.375 – a profit of nearly $3,600.
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Why a PLTR stock investment would have appreciated so much
The short explanation for such a staggering return on a PLTR stock investment would amount to the company’s role in cloud computing, security, and artificial intelligence (AI) – all massive drivers of growth since the original public release of ChatGPT in late 2022.
A closer examination of Palantir’s performance follows the same basic outline but also reveals the main individual drivers of growth. September 2024, in many ways, kickstarted the strongest phase of the rally as it brought the news that PLTR would be included in the benchmark S&P 500 index.
Just months later, the company’s move from the NYSE to NASDAQ for inclusion in the Nasdaq 100 index solidified and enhanced the stock market gains.
Palantir also heavily benefitted from important partnerships – such as the GPS-focused partnership with Shield AI’s Hivemind – and from regulatory developments, such as the more recent developments with the Federal Risk and Authorization Management Program (FedRAMP).
Some seemingly unrelated events – Donald Trump’s re-election being the price example – helped add more fuel to the rally and even caused some experts, such as Jim Cramer, to conclude that PLTR hitting $100 before January 1 is not impossible.
Why investors should be cautious about Palantir stock in 2025
Along with the fact that Palantir stock not only failed to hit $100 before New Year’s Day but even corrected somewhat, analysts and investors have been concerned about the growing gap between the shares’ valuation and the firm’s revenue.
Indeed, though most assessments of PLTR have been positive, the matter of sustainability – at least until the size of the company grows closer to market capitalization – has been raised repeatedly.
Featured image via Shutterstock
