Palantir Grabs Tesla's Spot as Second Most Active Stock Options After Earnings Beat: Options Chatter

Luzi Ann Santos joined discussion · Aug 6 02:24

$Palantir (PLTR.US)$ grabbed $Tesla (TSLA.US)$'s spot as Tuesday's second most active stock option after the data analytics and software company saw its quarterly revenue climb to $1 billion for the first time ever and raised its full year outlook above analysts’ estimates.

About 1.58 million Palantir call and put options changed hands. That compares with Nvidia's 1.74 million and Tesla's 1.11 contracts, exchange data showed.

(To see Palantir's options chain, click here. For the options ranking including Nvidia and Tesla, click here.)

Palantir Grabs Tesla's Spot as Second Most Active Stock Options After Earnings Beat: Options Chatter

Palantir's options volume jumped as the stock gapped higher, jumping as much as 9.8% to an intraday all-time high of $176.33. While shares pared their advance to 7.9%, they are still up 129% this year, making Palantir the biggest gainer on the $S&P 500 Index (.SPX.US)$.

The rally came after the company saw its revenue climb 48%, buoyed by what the company described as “the transformative impact” of its artificial intelligence platform (AIP), faster than Bloomberg consensus. The company also raised its full year revenue guidance to between $4.14 billion to $4.15 billion, surpassing analysts’ estimates.

(For Palantir's earnings hub, click here.)

While analysts raised their average price target on the stock to $142.30, the latest number still implies that they view Palantir as overvalued. At its current share price of $171.54, the stock is trading at 275.38X estimated earnings for 2025.

To all those on Wall Street who were predicting that the stock would eventually correct, bringing down its earnings multiples, CEO Alex Karp said “we're sorry that our haters are disappointed.”

He touted the 93% growth in the company’s commercial revenue and 53% expansion in government revenue that sent the total for the three months ended June 30 climbing by the most in its history.

“Those numbers are astonishing, incredible, and we're planning to share them with our partners via exposing them to a way in which to work in an AI revolution so that they have the same kind of agency we do,” Karp told analysts during the company’s earnings call Monday night.

The stock rally prompted an exodus from put options that are often used by speculators and investors as a hedge against a potential share slump. More than 803,100 put options changed hands. That’s up from yesterday’s total of 469,164 contracts and the 20-day average of 271,924, according to data compiled by Bloomberg.

Among put options, contracts that give their holder the right to sell Palantir shares at $170 in three days attracted the biggest volume-- 67,580, almost 96X the open interest. The price of those put options tanked 85% as the stock climbed above that strike price, pushing the contract out of the money.

"Palantir, with 40%-50% retail ownership, is a barometer of sentiment regarding the future of artificial intelligence," Morningstar analyst Mark Giarelli wrote in a note Tuesday. "This quarter's earnings keep the enthusiasm intact. We love the company, but believe valuation is a major headwind, going forward."

Share your thoughts on Palantir in the comments section. Do you think the first quarter results are enough to justify the stock's valuation, or are you in the camp that believes it's overvalued? Let your voice be heard by voting below. And if you want to read more options columns like this one on Apple, or this one on Microsoft, follow me here.

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