As long-term investors, we can't be focused on short-term trends that can cause a stock to get caught up in a hype cycle. However, there are some companies involved in these interest waves that are also attractive investments. The key is to understand if the stock is too expensive to make a good return on.

The latest hype cycle is undoubtedly artificial intelligence (AI), and Palantir (NYSE: PLTR) has gotten caught up in its rise. Up about 80% since its first-quarter earnings report on May 8, AI investors have quickly bid this stock up. While that's an incredible short-term move, has it made the stock too expensive for long-term investors? Let's look at where Palantir might be in five years and decide if the stock is still worth purchasing now.

Part of the reason for Palantir's rise is that it has been using AI from the start of the company. Palantir's data processing product allows its users to input mass data into the system. Then, custom-built AI determines what is happening. Finally, the software provides users insights on what they should do through an easy-to-understand dashboard. This has widespread applications, from the government to supply chains, and can be utilized almost anywhere.

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Source Fool.com