The stock that won 2024

Published Mon, Dec 30 20244:02 PM ESTUpdated Mon, Dec 30 20244:14 PM EST

If it were a competition, there's one company that would easily take the trophy for 2024's stock market champion. Excitement around artificial intelligence and its use cases pushed shares of the once little-known software stock Palantir Technologies to its best year on record since debuting on the stock exchange in 2020. PLTR YTD mountain Shares this year Not only have shares popped 350% for a record year, but the company also breezed past a slew of milestones. The company earned a coveted position in the S & P 500 in September and officials joined the concentrated Nasdaq-100 index this month. It's year-to-date gain is the biggest of any current S & P 500 member with Vistra Corp. a distant second with a 263% gain. The shares fell 2% on Monday, helping to drag the broader market lower as investors took some profits on big 2024 winners. Since its founding in 2003, Palantir has earned a reputation for its data software and analytics that have helped it win key government and defense contracts. This month, shares gained after the company announced an extension of its artificial intelligence contract with the U.S. Army totaling up to $619 million . Drone maker Red Cat Holdings this month also revealed a partnership with Palantir. Many view Palantir's blowout year as only the beginning for the Denver-based company. Last month, Bank of America analyst Mariana Perez Mora called its push into government and commercial applications in the "early innings." She believes the company and CEO Alex Karp are "leading the modern Knudsen movement," referring to Bill Knudsen, an automotive industry expert renowned for building out aircraft production, which was seen as having an integral role in the United States' World War II victory. "PLTR has demonstrated their ability to digitize enterprises and battlespaces from finances to missile production," she wrote. "In a world where efficiency, innovation, safety, and speed are the most valuable assets, we see Palantir as the enabler and winner in this new era." To be sure, there are some doubters even after Palantir's breathtaking run. More than half of Wall Street analysts maintain a hold rating on the stock, with nearly a third retaining a sell or underweight rating, according to FactSet. Morgan Stanley analyst Keith Weiss dropped his rating on the stock from underweight and removed his price target in November as the firm reassesses its thesis. Despite signs that the company is "emerging as a platform of choice in this stage of the generative AI cycle," he believes the risk-reward looks unbalanced. In his downgrade to an underperform rating on Palantir last month, Jefferies analyst Brent Thill cited an "unsustainable valuation" at 38 times 2025 revenues. "PLTR will no longer have easy comps heading into Q4 and CY25, and we believe it will be more difficult to accelerate growth from here," he said.