TSLA
Tesla
-- 278.390 NVDA
NVIDIA
-- 121.410 AMD
Advanced Micro Devices
-- 113.850 PLTR
Palantir
-- 96.750 MLGO
MicroAlgo
-- 13.990 Palantir Attracts Million Dollar Options Block Trade Before Earnings Beat: Options Chatter
$Palantir (PLTR.US)$ attracted a million dollar block trade in bullish options hours before the company reported quarterly earnings that beat analysts' estimates and painted a rosier outlook.
At 10:06:54 a.m. in New York Monday, a block trade of bullish put options was posted, with the seller collecting a $1.05 million premium for writing put options that give the holders the right to sell 142,000 Palantir shares at $81 each by Feb. 21.
(To see Palantir's options chain, click here. For the unusual option activities, click here.)
The transaction was recorded just hours before the software company that derives more than half of its sales from government contracts, reported earnings. The stock has more than quadrupled to $83.74 at the close on Monday, from $16.72 a year ago on optimism that the company will benefit from the boom in artificial intelligence applications. Its chairman Peter Thiel's close ties with President Donald is also another angle boosting positive sentiment on the stock.
After the market closed Monday, Palantir reported adjusted earnings of 14 cents a share, beating the 11 cents expected by analysts, according to estimates compiled by Bloomberg. Revenue climbed 36% to $827.5 million, surpassing the $775.9 million that analysts were anticipating.
"The momentum we are seeing across sectors, both commercial and government, is unlike anything that has come before," CEO Alexander Karp said in a letter to shareholders that accompanied the financial results. "The business we have built has now developed its own internal momentum and strength, its own interior life and forms of untamed organic growth, with the output that we are seeing far surpassing what we are investing."
For the full year, the company expects revenue to reach between $3.71 billion to $3.76 billion, the midpoint of which surpassed estimates. Commercial revenue is forecast to climb at least 54% to $1.08 billion, the company said in its earnings release.
"We believe we are in the early phases of an artificial intelligence revolution, where downstream software companies like Palantir disproportionately stand to benefit," Mark Giarelli, an analyst at Morningstar, wrote in a note last week.
While Giarelli quadrupled his estimate on the stock's fair value to $79, from $21, that still implies some downside potential for a stock that's currently trading at $82.72.
"We view the company as fairly valued despite the premium it trades at relative to other software companies," he said.
Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz said weakness in Palantir's international business and potential competition from companies with large language models (LLMs) could counter the growth momentum from its US government business and artificial intelligence platform pilots.
"New customer growth for Palantir could slow as incumbent database vendors roll out new generative AI products that integrate LLM functionality," they said. "Fewer deployments in public clouds may also limit any upward revisions for its Commercial segment, where we believe consensus for high-20% growth in 2025 is optimistic."
More than 931,000 call and put options were traded, landing Palantir in the fourth place for the most active stock options, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$ and $Apple (AAPL.US)$.
(To see the options ranking led by Nvidia, Tesla and Apple, click here. For the options market page, click here.)
Amid the share price rally, Palantir insiders already sold about $4 billion of their stocks in 2024, with most sales transacted around the last four months of the year, Bloomberg reported, citing the Washington Service.
CEO and Founder Alex Karp has already sold about 21% of his overall stake and his current trading plan, laid out in previous filings with the Securities and Exchange Commission, allows for another 7 million in shares to be transacted through May 2025, report quoted Jefferies analyst Brent Thill as saying.
Share your thoughts on Palantir in the comments section. Can the stock sustain the rally? Let your voice be heard by voting below.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
7665
Followers
18
Following
20K
Visitors
Follow
Kris Chakravarthi : it's the government contracts that's a constant that will take the stock higher
73915326 : lfg. lucid needs positive momentum
Meme_Short_Queen : $5
71173552 : It's a solid company and continued growth