AI software firm Palantir Technologies (PLTR) has seen its stock drop for six straight sessions, wiping out $73 billion in market value. Palantir’s decline came amid a broader market pullback and was further pressured by a report from short-seller firm Citron Research, which argued that the stock is highly overvalued. Indeed, even with the recent dip, Palantir stock is up 106% year-to-date. Thus, this dip may present a buying opportunity for long-term investors, especially through exchange-traded funds (ETFs) that offer diversified exposure to PLTR without the risk of holding the stock directly.
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Investors seeking exposure to PLTR stock may consider Global X Defense Tech ETF (SHLD) and iShares Expanded Tech-Software Sector ETF (IGV).
Let’s take a deeper look at these two ETFs.
Global X Defense Tech ETF
The SHLD ETF invests in companies that benefit from the rising adoption of defense technology and covers sectors like industrials, cybersecurity, AI, and augmented reality. The ETF aims to track the performance of the Global X Defense Tech Index. Importantly, PLTR accounts for 9.49% of SHLD’s total holdings. Some of the top holdings in the SHLD ETF include RTX (RTX), General Dynamics (GD), and Lockheed Martin (LMT).
Overall, the ETF has $3.50 billion in assets under management (AUM) and an expense ratio of 0.50%. Over the past six months, the SHLD ETF has generated a return of 45.62%.
On TipRanks, SHLD has a Moderate Buy consensus rating based on 28 Buys, 14 Holds, and one Sell assigned in the last three months. At $69.85, the average SHLD ETF price target implies 15.68% upside potential.
iShares Expanded Tech-Software Sector ETF
The IGV ETF gives investors exposure to leading U.S. software companies, focusing on areas like cloud computing, cybersecurity, and AI. The fund seeks to track the performance of the S&P North American Expanded Technology Software Index.
PLTR stock constitutes 10% of the ETF’s holdings. Apart from PLTR, some of the top stocks in the ARKK ETF are Oracle (ORCL), Microsoft (MSFT), and Salesforce (CRM). Overall, the ETF has $9.85 billion in AUM. Also, it has an expense ratio of 0.39%. The IGV ETF has returned 8.6% in the past six months.
Turning to Wall Street, the ETF has a Moderate Buy consensus rating. Of the 114 stocks held, 94 have Buys, 19 have Holds, and one has a Sell rating. At $128.41, the average IGV ETF price target implies a 20.77% upside potential.
Concluding Thoughts
ETFs provide indirect exposure to PLTR, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a liquid and transparent way to participate in the market. Investors seeking ETF recommendations might consider SHLD and IGV, as these ETFs offer exposure to Palantir stock.