Meet the new S&P 500 stock that’s up 100% this year

Today, September 23, S&P 500 the index welcomes a new stock that has soared this year. This particular tech company has seen its stock rise more than 100%, and given the company’s earnings performance to date and future prospects, it may have more room to run. You will probably not be surprised when I say that this company is a player in the field of artificial intelligence (AI), one of the fastest growing markets today.

AI, which is expected to become a trillion-dollar market by the end of the decade, is fueling revenue growth at a wide variety of tech companies, from those that provide AI to help businesses become more efficient to those that sell components or services for AI platforms. The new S&P company helps its clients use AI to save time and money, and thus become more profitable over time and achieve their goals. Let’s learn more about this exciting growth stock.

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A company that powers the US economy

Since opening the bell today, Palantir Technologies (PLTR 1.00%) it will be part of the S&P 500. This is a big milestone because it signals that the company is one of the powerhouses of the US economy. Investors recognize this, so some who before this point might have been hesitant to buy Palantir stock may now view the company with more confidence. The stock can also get a short-term boost as fund managers who track the S&P 500 buy it so their funds can closely replicate the benchmark’s performance.

Palantir has attracted investors — and in turn makes a great complement to the S&P 500 — because of its growth history, a new wave of growth that’s just getting started, and its long-term outlook.

First, a look at the road so far. Palantir is not a new kid on the block. The company has been around for about 20 years and most of that time has been associated with government contracts. Palantir helps customers aggregate their data and use it to become more efficient and even make game-changing decisions.

This has contributed to the progress of earnings over time. But the company’s growth has taken off lately, thanks to its focus on using artificial intelligence to power its work. Last year marked a big step forward for Palantir as the company launched its Artificial Intelligence Platform (AIP). This AI-powered system enables customers to quickly harness the power of their data and go from scratch to a meaningful use case in hours.

A booming commercial business

And so potential customers can see the power of AIP, Palantir holds bootcamps. These sessions fill up quickly and have contributed to tremendous growth for Palantir. And all this helped the company’s commercial business explode. In fact, U.S. trade growth now outpaces growth in government contract revenue.

In the most recent quarter, US commercial revenue rose 55%, while US government revenue rose 24%. And the number of US commercial customers increased by more than 80%, and the value of remaining transactions increased by more than 100%. And with the company now having just under 300 commercial customers in the US, there’s still plenty of room for growth. Earnings so far, along with the company’s observations of “relentless” demand, are reason to be bullish on this.

Additionally, AIP is still relatively new, so we could imagine more companies and organizations joining in the coming months and years. All of this should translate into higher earnings down the road. And that’s why, even factoring in the stock’s gain so far this year, there’s reason to be confident in the upside potential.

Palantir probably won’t climb non-stop. Stocks generally do not. But I wouldn’t be worried if the stock pauses or drops at some point. Over the long term, Palantir has what it takes to deliver a win for buy-and-hold investors, making it a great stock to buy now.