Investors should expect that some selling pressure will come in the form of short-term profit-taking before year-end. However, any weakness in Palantir will certainly be met with additional buyers as long-term investors are likely to be waiting for an opportunity to buy Palantir stock on a dip.

Key Takeaways Palantir shares jumped Tuesday after the analytics software provider announced that its entire product suite has received approval for use in processing sensitive federal workloads, positioning the firm to provide an array of services to government entities.

With this move, Palantir could soon join the Nasdaq 100 index. The move could result in more visibility for the stock. The stock's short interest has been rising of late, and that trend could continue.