Shares of tech company Palantir Technologies (PLTR) jumped in today’s trading to become one of the S&P 500’s (SPY) biggest gainers. The jump came after Ark Invest said that software companies focused on artificial intelligence have room for growth. Ark pointed out that firms like Palantir could capture market share from tech giants like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), which have seen their cloud services dominate the AI space so far.
Rahul Bhushan from Ark Invest Europe emphasized that while hardware has driven most of the AI-related value over the last two and a half years, there are now greater opportunities in software. He mentioned that companies operating in areas like software-as-a-service (SaaS) and platform-as-a-service (PaaS) are well-positioned to benefit as AI advances. This shift could favor companies like Palantir, which offer specialized AI and data solutions tailored to individual clients’ needs.
Palantir has been on a tear this year, with its shares rallying 140% on a year-to-date basis to $41.45 per share. This has allowed the stock price to recover to levels last seen in early 2021 and highlights the tough road that long-term investors faced getting back to this point. Indeed, shares were trading in the single digits as recently as May 2023.
New Way to Invest in Palantir
In a separate development, YieldMax launched a new ETF today called the YieldMax PLTR Option Income Strategy ETF (PLTY), which looks to generate income for investors while also giving them indirect exposure to Palantir stock. The fund is actively managed with a 0.99% expense ratio and uses a synthetic covered call strategy, where it trades a mix of call and put options based on Palantir’s performance instead of owning the stock directly.
This lets investors participate in some of Palantir’s price movements but caps gains due to the nature of the strategy. In addition, Instead of always sticking with covered calls, PLTY can sell credit call spreads and will distribute income monthly through cash payouts.
What Do Analysts Say About PLTR Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on four Buys, six Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $27.67 per share implies 33.24% downside risk.
