Palantir Technologies Makes Waves in AI: What Thiel’s Recent Stock Sale Means for Investors
One of the most prominent names in artificial intelligence software today is data analytics company Palantir Technologies (NYSE: PLTR). Recently, it transitioned from being primarily a government contractor focusing on the U.S. military to a significant player in the private sector.
Palantir’s impressive growth has caught the eye of investors. In 2024, the company’s shares have surged by 150%, significantly outpacing the nearly 20% returns of both the S&P 500 and Nasdaq Composite.
Despite this success, Palantir’s chairman, Peter Thiel, recently sold a considerable amount of stock. In the following sections, I will explore insider selling practices and offer insights on whether now might be the right time to sell.
Understanding Insider Sales
When corporate insiders engage in stock transactions, it raises questions about the motivations behind these decisions. To curb potential misuse of nonpublic information, the Securities and Exchange Commission (SEC) established rules, notably Rule 10b5-1.
This rule permits insiders to create a predetermined schedule for buying or selling shares based on specific criteria. Consequently, it helps to minimize the suspicion surrounding insider trading by ensuring that trades are planned rather than reactive.
Thiel’s recent actions fall into this category. Between late September and early October, he sold approximately 28.6 million shares of Palantir, netting around $1.1 billion.
Image source: Getty Images.
Keeping the Bigger Picture in Mind
Thiel co-founded Palantir and has been part of its journey since 2003. Although his recent sale is substantial, it’s not the first time he has cashed in on his investment. Earlier this year, from March to May, he completed four transactions, selling roughly 20 million shares for about $452 million.
There isn’t an ideal moment to sell a stock. Investors must reflect on various factors such as the company’s current growth and future potential.
PLTR market cap data by YCharts.
At the beginning of 2024, Palantir had a market cap of $35 billion. Fast forward ten months, and its valuation has more than doubled, illustrating significant growth.
While there is a positive outlook for Palantir long-term, it may be wise to take some profits after such remarkable gains. Your decision should factor in your financial needs and overall strategy. If you require cash or prefer to build your savings, now might be a suitable time to sell some shares. Conversely, if you believe in Palantir’s future and don’t need immediate cash, holding your shares could also be a viable choice.
The most balanced approach might be to reduce your position enough to recoup your initial investment while maintaining some stake in the company.
Is Now a Good Time to Invest $1,000 in Palantir Technologies?
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Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
