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Palantir Technologies is a Denver-based data analytics firm that trades under the PLTR ticker symbol. It is widely known for its software platforms — Foundry, Gotham and Apollo — used by many big-name corporations and government agencies for everything from fraud detection to counter-terrorism.
Founded in 2003, Palantir has been private for most of its lifespan. When the company issued its initial public offering in 2020, its market valuation was $20 billion. Since then, Palantir's stock has been the recipient of mixed reviews — it's considered a meme stock by some, an undervalued buy by others and even a hard "no" by certain analysts in the industry.
Here's what else to consider and how to buy Palantir stock.
1. Research Palantir stock
In a sector as volatile as big data, it's essential to look at the company's finances, products, customers and long-term objectives.
You can start by learning about Palantir's products to understand their use. This should also give you a better sense of how the company stacks up against its competitors. Another great resource is Palantir's earnings reports. These quarterly disclosures provide insight into the company's finances, including its cash flow, income and balance sheet.
And if you're concerned about the ethical impact of your investments, make sure to look under the hood to ensure the company's values are aligned with yours. For example, some folks may consider Palantir's data harvesting business model unethical and thus may opt to exclude it from their portfolio.
» Need an assist? Check out NerdWallet's guide on how to research stocks.
2. Assess Palantir's role in your investment strategy
For a good reason, many financial advisors sing the praises of a well-diversified portfolio — distributing your money across several sectors and types of investments can help spread risk. However, suppose your portfolio is already quite partial to technology investments like Palantir. In that case, it may be worth asking yourself if another investment in the sector makes sense or only further skews your holdings.
You'll also want to consider timing. Long-term investing operates on the idea of compound interest, or watching your investments grow with time. That means weathering potential crashes or market drops that can make short-term dents in your portfolio.
If you think you may want to use the money you're planning to invest within five years, you may not be willing to contend with any potential volatility. But, on the other hand, if Palantir is a good fit in your overall portfolio and you've got the patience to wait things out, check out the next step.
3. Set up a brokerage account if you don't have one
You'll need to have a brokerage account to make trades to purchase stock. If you need to open one, it's relatively simple. Our guide to opening a brokerage account goes through the basics, including finding a low-cost provider, funding the account, and differentiating between providers.
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4. Consider how much you want to invest in Palantir
After careful consideration, you're probably wondering how to finally invest in the stock. Here are the final two things to think about before placing your order.
How many shares
When a stock's price is relatively low, it can be tempting to purchase multiple shares. But how much you decide to invest should be informed by a few other factors, including your financial health. For example, if you have different goals you want to achieve — such as building a solid emergency fund or paying off high-interest debt — consider placing a primary focus on those objectives first. If you already have a diversified portfolio and have some cash to spare, think about how much you're willing to wager on Palantir.
Some brokers also offer investors the chance to purchase portions of the stock, commonly known as fractional shares. This allows you to buy and own part of the stock rather than a full share.
What kind of order
The last step is to decide between what's known as a "market order" or a "limit order." When executing a market order, you're purchasing the stock on the spot for the current price. With limit orders, you specify the price at which you want to buy the stock. Your brokerage will only purchase the stock when its price point meets your specifications. It's important to note that your order won't be placed if the stock never hits that price.
Got more questions? Check out our guide on how to buy stocks.