Palantir‘s (NYSE: PLTR) share price has spiked recently, rising more than 220% over the past 12 months. Investors are optimistic about the company’s growth in the artificial intelligence (AI) market, as its analytics software helps companies and government agencies make sense of their vast quantities of data.
But Palantir’s soaring share price has no doubt left many investors wondering if they should sell the stock to lock in their gains, continue holding, or even buy shares. Here are a few suggestions.
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If you’re considering selling your Palantir stock, you should ask yourself a few questions first. Consider these good reasons to sell a stock:
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The investment thesis for the company has changed.
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The company is being acquired and its share price already reflects most of the value of the bid price.
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You need the money.
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You need to rebalance your portfolio.
Considering that nothing drastic has changed about Palantir’s business and that the artificial intelligence market remains healthy, if you hold the stock, it’s unlikely your initial reasons for buying it have ceased to apply. There’s also no news suggesting that Palantir is the target of acquisition interest.
Still, there’s nothing wrong with taking your large Palantir gains right now if you need the money for something else, like buying a new house or another large expense. What’s more, if Palantir now makes up too much of your overall portfolio’s value, you may want to sell some shares to rebalance it.
If you already own Palantir, you’re likely trying to decide whether the stock has more room to run. While there’s no way to know for sure, the company’s impressive growth is an indicator that it’s still on the right track.
Palantir’s revenue increased 30% in the third quarter to $726 million, comfortably ahead of Wall Street’s consensus estimate of $701 million. And the company’s adjusted earnings per share (EPS) grew 43% from the year-ago quarter to $0.10, beating analysts’ consensus estimate of $0.09.
The company also grew its customer count by an impressive 39% and closed 104 deals worth $1 million or more.
In short, Palantir’s business is doing well and nothing fundamentally changed with the company that should give investors pause. All of this means that holding onto your Palantir shares is probably a good strategy right now.
