Palantir Options Volatility Surges as Stock Defies Market Downturn

Palantir's stock rallied 2%, defying a wider market downturn, boosting call options volume to 876,500 contracts, compared to a 20-day average of 512,227. The gains came after the New York Times reported that President Trump tapped the company to compile data on Americans, leading to a $113 million in new and additional federal spending.

Palantir Technologies Inc. (NASDAQ:PLTR) stock rallied 2% on May 31, 2025, defying a broader market downturn. The stock price climbed to $130.17, a gain of 6.4% from its previous close. The rally was driven by a New York Times report indicating that President Donald Trump is tapping Palantir to organize personal data across various government agencies, including the Department of Homeland Security (DHS), Internal Revenue Service (IRS), and others [1]. This news has led to an increase in federal spending, totaling $113 million in new and additional contracts.

The call options volume for Palantir surged to 876,500 contracts, surpassing the 20-day average of 512,227 contracts. This significant increase in options activity suggests that investors are bullish on the stock's future prospects. The stock's Schaeffer's Volatility Index (SVI) of 55% ranks in the 22nd percentile of its annual range, indicating that options are affordably priced in a post-earnings volatility crush [1].

Analysts remain skeptical about Palantir's stock performance, with 17 out of 20 brokerages maintaining "hold" or worse ratings. However, the company's recent earnings beats and government contract wins have fueled optimism among some investors. Palantir's Schaeffer's put/call open interest ratio (SOIR) of 9.99 ranks in the 85th percentile of its annual range, indicating heavier-than-usual put exposure among short-term traders [1].

Palantir's stock has seen substantial growth since its initial public offering (IPO) in October 2020. The stock has climbed 1,255% since then, with a year-to-date gain of nearly 66%. The company's revenue has grown explosively, reaching $2.87 billion in 2024, up from $1.092 billion in 2020. However, net income has fallen, although it has shown a slight improvement from 2023 to 2024 [4].

The company's expansion and adoption of AI and machine learning platforms, such as AIP, Foundry, Gotham, and Apollo, have driven its growth. These platforms help manage, analyze, and secure sensitive data, making them highly sought after by both commercial and government clients. The company's government demand has outperformed commercial demand each year since 2020, with notable growth every year [4].

Palantir's strategic partnerships with space companies, such as Voyager Space, are also expected to drive innovation in space technology. The company's strong full-year guidance for 2025 sees a sales forecast between $3.74 billion and $3.76 billion, topping average estimates of $3.52 billion [4].

In conclusion, Palantir Technologies' stock rally is driven by recent government contract news and strong earnings reports. The company's growth in AI and machine learning platforms, government demand, and strategic partnerships position it as a leader in the data services market. However, analysts' skepticism and the stock's high volatility should be considered by investors.

References:
[1] https://www.schaeffersresearch.com/content/news/2025/05/30/why-is-palantir-stock-rising-today
[2] https://www.moomoo.com/community/feed/gamestop-leaps-over-palantir-to-join-nvidia-and-tesla-in-114586591625221
[3] https://seekingalpha.com/news/4453940-palantir-climbs-as-government-contracts-new-opportunities-mount
[4] https://247wallst.com/forecasts/2025/05/26/palantir-technologies-pltr-price-prediction-and-forecast-2025-2030/