Palantir Plummets 8.17%: Earnings Triumph vs. Market Overreaction

Summary
• Palantir (PLTR) slumps 8.17% to $190.26, erasing post-earnings gains despite crushing Q3 estimates
• Revenue surges 63% to $1.18B, U.S. commercial sales jump 121% to $397M
• Cash reserves hit $6.4B, GAAP net income triples to $476M
• Market overreacts to valuation concerns amid AI-driven growth tailwinds

Palantir’s post-earnings selloff has ignited a firestorm of debate. While the company delivered its 21st consecutive beat with AI-powered revenue growth, traders are pricing in skepticism about its $490B market cap. The stock’s 8.17% drop from a 52-week high of $207.52 reflects a tug-of-war between bullish fundamentals and bearish valuation fears.

Earnings Overperformance vs. Valuation Volatility
Palantir’s Q3 results shattered expectations with 63% revenue growth and 121% U.S. commercial expansion, yet the stock plunged 8.17% as traders fixated on its 333x P/E ratio. The company’s AI-driven platform secured $1.31B in U.S. commercial TCV and $486M in government sales, but the market discounted these achievements against concerns about multiple compression. CEO Alex Karp’s dismissal of detractors and bullish guidance for $1.33B Q4 revenue failed to offset profit-taking after a 170% YTD rally. The selloff mirrors historical patterns where high-growth AI stocks face valuation corrections post-earnings.

Application Software Sector Mixed as Microsoft Slides
The Application Software sector remains fragmented as Microsoft (MSFT) fell 0.86% despite Palantir’s AI-driven growth. While Palantir’s U.S. commercial revenue surged 121%, Microsoft’s Azure growth slowed to 23% year-over-year, highlighting divergent AI adoption trajectories. Palantir’s 52W high of $207.52 contrasts with Microsoft’s 52W low of $333.15, underscoring the market’s bifurcation between AI pure-plays and legacy cloud providers.

Options Playbook: Capitalizing on Volatility and Technicals
• MACD: 6.39 (above signal line 4.19), RSI: 76.69 (overbought), 200D MA: 133.18 (far below price)
• Bollinger Bands: 185.15 (middle), 167.38 (lower), 202.92 (upper) – price near lower band
• Support/Resistance: 179.21–179.89 (30D), 155.72–158.43 (200D)

PLTR’s technicals suggest a short-term bearish bias with long-term bullish potential. The stock is trading near its 20-day Bollinger lower band at $185.15, with RSI at overbought levels indicating potential pullback. Two options stand out for bearish exposure:

• PLTR20251114P185 (Put):
- Strike: $185, Expiration: 2025-11-14, IV: 59.53%, Leverage: 35.53%, Delta: -0.3719, Theta: -0.0522, Gamma: 0.0192, Turnover: $2.08M
- Payoff: At 5% downside (ST = $180.75), intrinsic value = $4.25/share. Leverage ratio of 35.53% amplifies gains if price drops below $185.
- Why it works: High IV (59.53%) and moderate delta (-0.37) balance sensitivity and liquidity. Gamma of 0.0192 ensures responsiveness to price swings.

• PLTR20251114C190 (Call):
- Strike: $190, Expiration: 2025-11-14, IV: 58.19%, Leverage: 24.31%, Delta: 0.5271, Theta: -0.6943, Gamma: 0.0207, Turnover: $6.91M
- Payoff: At 5% downside (ST = $180.75), intrinsic value = $0. Leverage ratio of 24.31% offers aggressive upside if price rebounds.
- Why it works: High turnover ($6.91M) and moderate delta (0.5271) provide liquidity and directional exposure. Theta of -0.6943 accelerates time decay, favoring quick moves.

Trading Setup: Short-term bears should target the PLTR20251114P185 put for 5% downside potential, while bulls may use the PLTR20251114C190 call for a rebound play. Key levels to watch: 185.15 (Bollinger middle) and 179.21 (30D support).

Backtest Palantir Stock Performance
Below is a concise wrap-up of what was done, followed by an interactive module where you can explore every detail of the back-test results.Key points of the workflow 1. Data collection – Pulled all PLTR daily OHLC data from 2022-01-01 through 2025-11-04. 2. Signal construction – • Flagged every trading day on which PLTR’s intraday draw-down (Low ÷ Prior-Close − 1) ≤ −8 %. • Took the first trading session after each such plunge and, if a bullish MACD (12/26/9) crossover occurred that day (is_macd_bull_cross = 1), set a BUY signal on the close. 3. Risk management – Because you did not specify exit rules, I added common short-term swing parameters for illustration: • 10 % stop-loss (stop_loss = 0.10) • 30 % take-profit (take_profit = 0.30) • 10-day maximum holding period (max_hold_days = 10) These can be adjusted at any time—just let me know. 4. Back-test – Ran the strategy over the full period using closing prices. 5. Results – Saved to the file pltr_minus8_backtest_result_20220101_20251104.json and wired into the interactive dashboard below.You can review cumulative P&L, hit ratio, draw-down curve, and trade list directly in the module. If you’d like deeper statistics (e.g., Sharpe, Kelly, monthly returns) or want to tweak the risk limits or signal definition, just tell me!Feel free to open the dashboard above; it contains the full equity curve, statistics, and trade log.Next steps? • Refine the entry filter (e.g., require oversold RSI as well) • Optimise the exit rules (different profit/stop levels or trailing stop) • Run the same concept on other tickers or sectors for robustness checks Let me know how you’d like to proceed!

PLTR at Inflection Point: Buy the Dip or Sell the Rally?
Palantir’s 8.17% drop has created a critical juncture for investors. The stock’s 63% revenue growth and $6.4B cash hoard validate its AI-driven momentum, but the 333x P/E ratio remains a hurdle. Traders should monitor the 185.15 Bollinger middle and 179.21 support levels for directional clues. With Microsoft (MSFT) down 0.86%, the sector’s mixed performance underscores the need for selective positioning. Action: Aggressive bulls may buy the PLTR20251114C190 call into a rebound above $190, while bears should short the PLTR20251114P185 put if $185 breaks.