Palantir Soars 2.75% on $448M Navy Contract: Is This the Catalyst for a New Bull Run?

Summary
• Palantir (PLTR) surges 2.75% intraday to $186.85, driven by a $448 million U.S. Navy contract for nuclear submarine supply chain management.
• Leveraged ETFs like Direxion Daily PLTR Bull 2X Shares (PLTU) jump 6.54%, outpacing the stock’s rally.
• Technicals show a short-term bullish trend with RSI at 67.3 and MACD crossing above the signal line.

Palantir’s stock is trading near its 52-week high of $207.52, fueled by a landmark government contract and robust AI platform adoption. The $448 million Navy deal, coupled with a 63% revenue surge in Q3, has ignited investor optimism. However, the stock’s 328x P/E ratio and bearish analyst price targets raise valuation concerns.

Navy Contract and AI Momentum Ignite Palantir’s Rally
Palantir’s 2.75% intraday gain is directly tied to its $448 million contract with the U.S. Navy to manage nuclear submarine supply chains via its ShipOS platform. This follows a $10 billion Army contract and a $30 million ICE deal, reinforcing its dominance in government AI solutions. The stock’s surge aligns with broader AI sector enthusiasm, as Palantir’s Q3 revenue growth of 63% and 69% customer count increase highlight its scalable, high-margin SaaS model. However, the 160x sales multiple and RBC Capital’s $50 price target underscore valuation risks.

Application Software Sector Splits as Palantir Outperforms Microsoft
While Palantir’s Application Software sector leader Microsoft (MSFT) trades down 2.95% intraday, PLTR’s rally reflects its niche in government AI. Microsoft’s decline contrasts with Palantir’s 140% YTD return, driven by its ontology-based AI platforms and federal contracts. The sector’s mixed performance highlights Palantir’s unique positioning in defense and national security, where demand for AI-driven logistics and analytics remains resilient despite broader tech sector volatility.

Leveraged ETFs and Call Options for a Volatile AI Trade
• 200-day average: $142.93 (well below current price)
• RSI: 67.3 (neutral to overbought)
• MACD: -0.116 (crossing above signal line at -2.38)
• Bollinger Bands: Price at 186.85 (near upper band of 190.62)

Palantir’s technicals suggest a continuation of its bullish momentum, with key support at $181.02 and resistance at $190.62. The Direxion Daily PLTR Bull 2X Shares (PLTU) and ProShares Ultra PLTR (PLTA) offer amplified exposure to a potential break above $190.62. For options, two contracts stand out:

• PLTR20251219C185
- Type: Call
- Strike: $185
- Expiry: 2025-12-19
- IV: 46.28% (moderate)
- LVR: 27.83% (high leverage)
- Delta: 0.5699 (moderate sensitivity)
- Theta: -0.6978 (rapid time decay)
- Gamma: 0.0275 (high sensitivity to price moves)
- Turnover: $4.66M (liquid)
- Payoff at 5% upside: $186.85 → $196.19 → max(0, 196.19 - 185) = $11.19/share
- Why it stands out: High leverage ratio and gamma make it ideal for a short-term rally above $190.62.

• PLTR20251219C190
- Type: Call
- Strike: $190
- Expiry: 2025-12-19
- IV: 46.10% (moderate)
- LVR: 43.03% (high leverage)
- Delta: 0.4313 (moderate sensitivity)
- Theta: -0.5986 (rapid time decay)
- Gamma: 0.0276 (high sensitivity to price moves)
- Turnover: $2.71M (liquid)
- Payoff at 5% upside: $186.85 → $196.19 → max(0, 196.19 - 190) = $6.19/share
- Why it stands out: High leverage and moderate delta balance risk/reward for a break above $190.62.

Aggressive bulls should consider PLTR20251219C185 into a close above $190.62.

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 AI Momentum Faces Valuation Headwinds: Act Now or Watch the 52-Week High
Palantir’s rally is driven by its AI platform’s adoption in defense and enterprise, but its 328x P/E ratio and bearish analyst price targets ($50–$255) suggest volatility ahead. The stock’s 2.75% intraday gain aligns with its short-term bullish trend, but a break above $190.62 could trigger a test of the 52-week high at $207.52. Conversely, a close below $181.02 support may invite profit-taking. Investors should monitor Microsoft’s sector leadership (-2.95% intraday) for broader tech sentiment cues. Aggressive bulls: Buy PLTR20251219C185 if $190.62 breaks.