Investing
Palantir (NASDAQ:PLTR) has been a top-performing stock after a few slow years. The stock truly hit its stride in 2024 and is now up by more than 1,200% over the past five years. Shares now trade at above $120 apiece, and the company’s market cap is close to $300 billion.
When any stock gains a lot of momentum, some investors wonder if a stock split is possible. Although a Palantir stock split is possible, it may not be on the way for a few years. These are some of the details to consider when assessing the likelihood of a Palantir stock split.
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A PLTR stock split may be on the way, but investors may have to wait a few years.
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The AI leader has crushed the stock market over the past five years and may be able to extend its gains.
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Palantir Has Never Conducted A Stock Split
The company has not conducted a single stock split since going public in 2020. That doesn’t mean Palantir will never do a stock split, but cutting the same pie into multiple slices may not be on management’s radar.
Investors who want to see a Palantir stock split have another headwind due to the stock’s current price. It isn’t normal for a stock trading at just above $120 per share to conduct a stock split. A company would have to be valued at hundreds of dollars for a single share to consider a stock split. In this case, Palantir may be more likely to conduct a split in the $250-$300 range, but this isn’t a guarantee.
Stock Split Mania Has Died Down
Stock split mania reached its highs in 2022 when most of the Magnificent Seven stocks conducted stock splits. However, the stock split craze was revitalized in 2024 when Nvidia (NASDAQ:NVDA) did a 1o-for-1 stock split. Fellow AI stock Supermicro (NASDAQ:SMCI) followed in Nvidia’s footsteps with its own 10-for-1 split.
Nvidia traded at above $1,200 per share before its stock split, while SMCI was valued at $416.40 before its stock split. It isn’t common for companies to wait until their share prices exceed $1,000 to conduct a stock split. However, a $120 price point is still much lower than SMCI’s pre-split price per share.
If another big tech company announces a stock split, it can attract renewed interest in the practice. However, it seems unlikely. Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Tesla (NASDAQ:TSLA) are the most likely candidates for conducting stock splits that can inspire companies like Palantir to do the same.
Is Palantir A Buy?
A stock split does not affect a company’s fundamentals. The AI leader has a bright future and should continue to gain market share. Its first quarter results were encouraging, as the company delivered 39% year-over-year revenue growth while more than doubling its net income.
The only hold-up for some investors is Palantir’s burgeoning P/E ratio. The company’s valuation demands perfection, and you may find more reasonably valued companies in the stock market. Investors who can wait 10-20 years may benefit from giving Palantir a closer look. However, this stock requires that you have a higher risk tolerance and aren’t afraid of sharp volatility.
A single bad earnings report can send the stock plunging due to high expectations and a high valuation. If the company continues to live up to its potential and past results, it has the potential to multiply investors’ money.
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