Are you wondering if Palantir (NYSE:PLTR) is in a bubble and if it deserves a spot in your portfolio? Those are certainly important questions that you might want answered if you are one of those PLTR stock holders.

Palantir Technologies is coming off a fantastic 2023 fiscal year, and this year looks just as promising. They achieved GAAP profitability for 5 consecutive quarters, making the company eligible for S&P 500 inclusion in 2024. Furthermore, Palantir’s AIP is gaining traction with their bootcamp being a huge differentiator to drive new users.

Palantir is an AI Pure Play

What many seem to forget is that Palantir has been developing AI and machine learning models before it became a hot topic. CEO Alex Karp, recently said that the U.S. is eating everyone’s lunch on AI, and their AIP continues to gain traction.

There are many positive catalysts including the continued growth of government revenues. However, what investors should focus on is the company’s growth in commercial revenues. 

Wall Street has heavily criticized Palantir’s reliance on government contracts but that will soon be a thing of the past. Palantir’s commercial revenue grew 32% YOY and 13% quarter over quarter in their Q4 and full year 2023 results. This a promising sign as the company is focused on driving diversified profitable growth. 

Additionally, they are guiding U.S. commercial revenue in excess of $640 million in FY24, implying approximately 40% YOY growth. This could be the catalyst for the company to surge to new highs in 2024. 

The Next Candidate to Join the S&P 500 Index

There are a growing number of reasons for Palantir to join the S&P 500 index in 2024. 

Firstly, the company has already met the market capitalization requirement and achieved GAAP profitability for the 2023 fiscal year. To add the cherry on top, they have now achieved this feat for the fifth consecutive time. 

CEO Alex Karp has made his intentions very clear on driving profitable growth in 2024. He disclosed the company’s guidance for FY24, including revenue between $2.652 – $2.668 billion with GAAP operating and net income in each quarter of the year. 

If Palantir joins the S&P 500 in 2024, shares could surge higher as funds will be forced to buy up the stock. This will be another huge milestone for the company as they continue to build on their momentum from 2023.

PLTR Stock: Shares Are Still a Buy in 2024

PLTR stock is still expensive relative to other pure play AI stocks. However, Palantir will likely see a higher CAGR in revenue and EPS over the next several years.

They have largely focused on government contracts and have only recently made a pivot to driving diversified growth. Their AIP continues to gain traction, and their AI bootcamp is a great way to funnel in new customers. 

After achieving GAAP profitability in 2023, Palantir plans to continue driving profitable growth in 2024. An S&P 500 inclusion can be the spark that positions the company to double from current levels.

 On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.