Is the Newest AI Addition to the S&P 500 a Buy?

S&P 500 News

Is the Newest AI Addition to the S&P 500 a Buy?
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Stocks Analysis by ValueWalk (Dave Kovaleski) covering: S&P 500, Dell Technologies Inc, Erie Indemnity Company, Bio-Rad Laboratories Inc. Read ValueWalk (Dave Kovaleski)'s latest article on Investing.com

stock was soaring on Monday, making it one of the top gainers on the day, up more than 13% as of mid-afternoon, Eastern time.

In the latest shareholder letter, Palantir CEO Alex Karp said the company’s AIP, or Artificial Intelligence Platform, has transformed its business. Its AIP has been a major contributor to the 55% revenue increase Palantir saw in its U.S. commercial business in the second quarter. Overall, revenue grew 27% year over year to $678 million.

However, the rally also shoots up the share price of a stock that is already wildly overvalued, with a P/E ratio of 178 and a forward P/E of 78. It is hard to sustain that level of growth, even for a company as successful as Palantir.

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