Little-Known Stock About to Skyrocket After Being Hand-Picked for the Most Exclusive Club on Wall Street!

Pretty soon, Palantir Technologies Inc. will be joining the exclusive group of the S&P 500. Considering the historical performance of stocks that have been added to this index, investors are extremely bullish on Palantir stock.

The S&P 500 is widely regarded as the most widely followed stock market index. It is seen as a barometer of the overall health of the market. The selection of stocks for the S&P 500 is done by a committee, and getting picked is considered a huge honor.

This exclusive index is seen as a benchmark, and professional investors model their portfolios after it. Consequently, many index funds and ETFs also mirror the S&P 500. This implies that whenever a new stock joins this exclusive group, it becomes an automatic buy for many investment funds.

Historically, stocks that have been added to the S&P 500 have observed a significant increase in their share price after the announcement of the addition. On average, stocks are up 1.4% on the day they join, despite there being just under two weeks between the announcement and when it actually happens. But this impact goes further than just the initial bump.

As per studies, these stocks continue to beat the market over the subsequent six months. In fact, in the six months following the change in the S&P 500, stocks tend to outperform by an average of 4.3%. This phenomenon is likely due to the increase in buying activity from index funds and other related investment products.

The main reason is that investment funds are very hesitant to sell stocks once they have been chosen for the index. As such, these stocks tend to increase sharply in the long run. Now, with Palantir stock joining the S&P 500 soon, many are expecting to see something similar.

Palantir has been a very successful tech firm headquartered in Denver, Colorado. Founded in 2003, Palantir specializes in providing a software platform that integrates and analyzes data for many massive clients, such as the Pentagon and various other U.S. government departments.

Palantir’s technology allows its clients to uncover and analyze hidden insights from complex data. Many other major government and private sector organizations utilize its services, including many of the largest banking institutions on Wall Street.

Palantir went public in November 2020, so despite its somewhat impressive start, its common stock has largely been held steady. However, momentum is building in the stock as it moves towards its late September inclusion to the S&P 500.

Right now, the biggest piece of advice we would give to investors considering jumping into Palantir stock is to be cautious. At the time of publication, Palantir’s stock price is trading around $23.

Despite the historical significance and price impact surrounding this index membership, there is no telling what can happen. While momentum may favor Palantir stock as it moves towards September inclusion, unforeseen market and other factors that can negatively impact its price.