Palantir Soars 2.7% on $448M Navy Contract—Is This the Catalyst for a New Bull Run?

Summary
• Palantir (PLTR) surges 2.69% to $186.74, driven by a $448 million U.S. Navy contract for nuclear submarine supply chain management.
• Intraday range of $182.75 to $187.68 highlights aggressive buying pressure amid a 142% YTD rally.
• Leveraged ETFs like Direxion Daily PLTR Bull 2X Shares (PLTU) jump 6.45%, amplifying the stock’s momentum.
• The stock trades at 328x dynamic PE, raising questions about valuation sustainability despite strong Q3 earnings and AI-driven growth.
Palantir’s sharp intraday rally on December 10, 2025, underscores its role as a high-stakes AI play. A landmark contract with the U.S. Navy, coupled with a bullish technical setup, has reignited investor fervor. However, the stock’s extreme valuation and mixed analyst sentiment demand a nuanced approach to capitalize on its potential while managing risk.

Navy Contract Ignites Palantir's Bullish Surge
Palantir’s 2.69% intraday gain is directly tied to its $448 million contract with the U.S. Navy to manage the supply chain for its nuclear submarine fleet. The initiative, branded as ShipOS, positions Palantir as a critical player in defense logistics, leveraging its AI-driven platform to optimize complex operations. This win builds on recent momentum, including a $10 billion Army contract and a $1.5 billion U.K. defense deal, reinforcing its dominance in government AI applications. The stock’s surge reflects optimism about recurring revenue from federal contracts and its ability to scale its platform across high-margin sectors.

Application Software Sector Splits as Palantir Rises, Microsoft Falls
While Palantir’s Application Software sector leader, Microsoft (MSFT), trades down 2.14% intraday, PLTR’s rally highlights divergent investor sentiment. Microsoft’s decline, despite its AI cloud infrastructure dominance, contrasts with Palantir’s niche focus on government and enterprise AI solutions. The sector’s mixed performance underscores a shift toward specialized AI platforms over broad cloud services. Palantir’s 142% YTD gain versus Microsoft’s 101% YTD return illustrates the market’s appetite for high-growth, high-risk AI plays.

Leveraged ETFs and Call Options Signal Aggressive Bullish Play
• 200-day average: $142.93 (well below current price)
• RSI: 67.3 (neutral to overbought)
• MACD: -0.116 (bullish divergence with price)
• Bollinger Bands: Price at 186.74, above middle band (171.66), near upper band (190.62)
• Support/Resistance: 30D support at 181.02–182.06, 200D resistance at 177.88–180.55
Palantir’s technicals suggest a continuation of its bullish trend, with key resistance at the 52W high of $207.52 and support at the 200D MA. The Direxion Daily PLTR Bull 2X Shares (PLTU) and GraniteShares 2x Long PLTR Daily ETF (PTIR) offer amplified exposure, with PLTU up 6.45% and PTIR up 5.52% intraday. For options, two contracts stand out:
• PLTR20251219C180: Call option with strike price $180, expiring Dec 19. Key stats: IV 48.38%, leverage ratio 19.01%, delta 0.6908, theta -0.7607, gamma 0.0236, turnover $3.98M. This option balances moderate delta with high leverage, ideal for a 5% upside scenario (target price $195.58).
• PLTR20251219C185: Call option with strike price $185, expiring Dec 19. Key stats: IV 47.72%, leverage ratio 27.63%, delta 0.5623, theta -0.7005, gamma 0.0267, turnover $4.42M. High gamma and liquidity make this contract responsive to price swings, with a 5% upside payoff of $10.58 per share.
Aggressive bulls should consider PLTR20251219C180 into a break above $190.62 (Bollinger upper band) or PLTR20251219C185 for a high-gamma play on the 52W high.

Backtest Palantir Stock Performance
The backtest of Palantir's (PLTR) performance following a 3% intraday surge from 2022 to the present indicates favorable short-to-medium-term gains. The 3-day win rate is 61.11%, the 10-day win rate is 70.14%, and the 30-day win rate is 79.86%, suggesting that the stock tends to perform well in the immediate aftermath of such events. The maximum return observed was 24.06% over 30 days, indicating that there is potential for significant price appreciation following the 3% surge.

Palantir’s Bull Run Faces Valuation Hurdles—Act Now or Watch for Breakouts
Palantir’s rally is fueled by strategic defense contracts and AI-driven growth, but its 328x dynamic PE and 160x sales multiple remain extreme. The stock’s technicals favor continuation above $190.62, with the 52W high at $207.52 as a critical target. However, the sector leader Microsoft’s -2.14% intraday decline highlights broader market caution. Investors should balance optimism with caution, using leveraged ETFs like PLTU or high-gamma options like PLTR20251219C185 for aggressive plays. Watch for a breakdown below $181.02 support or a breakout above $190.62 to confirm the trend’s sustainability.