Investors capitalize on Palantir's slump: strategies for capital gains amidst its current decline
Here's a fresh take on the opportunity brewing for savvy investors: banking on Palantir with this equity-linked bond can deliver juicy yields, even if the stock takes a tumble. Here's the lowdown on this investment alternative and what you oughta watch out for.
Investors have been on a wild ride with Palantir Technologies stock since last year. The stock went ballistic in the AI hype, only to slide down around 25% after reaching its peak in February. With the fear of further drops, the volatility is on the rise. Yet, Palantir remains a player worth keeping an eye on – its big data analysis software powers holidaymakers' passport checks at airports, helps government agencies combat crime and terrorism, and boosts infrastructure management for logistics giants.
The integration of AI and the unpredictable geopolitical climate boosted Palantir's customer base, order volume, and revenue in 2024. And as the demand for AI-assisted data analysis to optimize systems and processes continues to growth, the management anticipates a 30%+ revenue hike in 2025.
However, a chunk of the 2024 revenue still came from government agencies. Rumors of shrinking US government budgets sent the stock spiraling. To rub salt in the wound, the stock is still steeply valued at a P/E ratio of 90. Analysts generally rate the stock as "Hold" or even "Buy," but recently there've been more bearish voices.
Grabbing extra profits with a 14.8% yield
Periods of uncertainty and wild market swings present smart opportunities for forward-thinking investors. Instead of jumping headfirst into the stock, an equity-linked bond might be the safer alternative you're looking for.
These securities, like the one on Palantir Technologies, are released by financial juggernauts such as Unicredit. Key features are fixed during issuance, such as the strike price ($86.24), barrier ($51.744), coupon (14.8%), and maturity (2026). The security is traded in percent and requires a minimum investment of one unit. Investors collect a 14.8% interest, regardless of Palantir's stock price movement, until maturity. If the stock price hovers above the barrier at maturity, investors get their $100 back. Below the barrier? Losses may materialize.
As of this writing, Palantir's stock is trading at $80.68, meaning a 35.9% buffer until the critical mark and last confirmed in November. Consider setting a stop-loss to manage potential losses.
Curious for more insights? Check out the latest issue of BÖRSE ONLINE right here, or dive into the time-tested investment strategy of a finance professor as shared here.
Note of Disclosure The publisher Börsenmedien AG's management and majority shareholder, Mr. Bernd Förtsch, holds direct and indirect positions in the financial instruments discussed or related derivatives. Profits could result from the stock price movement caused by our publication.
- By 2025, Palantir Technologies anticipates a revenue increase of 30%+ due to the growing demand for AI-assisted data analysis.
- Investors can opt for an equity-linked bond, like the one from Unicredit on Palantir Technologies, offering a fixed 14.8% yield until maturity in 2026.
- The equity-linked bond's key features include a strike price, barrier, coupon, and maturity, with a minimum investment of one unit.
- Despite analysts' encouraging outlook on Palantir's stock, more bearish voices have emerged due to unpredictable market trends and high stock valuation.
- With Palantir's stock currently trading at $80.68, investors may consider setting a stop-loss to manage potential losses, given the 35.9% buffer until the critical mark and last confirmed in November.
