Palantir Soars 4.4% on $448M Navy Contract: Can This Bullish Surge Sustain?

Summary
• Palantir (PLTR) surges 4.4% to $189.87, hitting an intraday high of $190.38
• $448M U.S. Navy contract for nuclear submarine supply chain management drives momentum
• Leveraged ETFs like Direxion Daily PLTR Bull 2X (PLTU) jump 10.8%
• Technicals show short-term bullish trend with RSI at 67.3 and MACD crossing above signal line
Palantir’s stock is surging on the back of a landmark $448 million contract with the U.S. Navy, propelling it to a 4.4% gain in a single trading session. The deal, part of its ShipOS initiative, has triggered a sharp intraday move from $182.75 to $190.38, with leveraged ETFs and options chains amplifying the rally. Traders are now scrutinizing whether this surge aligns with broader AI sector trends or signals a short-lived spike.

Navy Contract Ignites Short-Term Optimism
Palantir’s 4.4% 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 ShipOS initiative, managed by the Maritime Industrial Base Program, positions Palantir as a critical player in defense logistics. This contract adds to a string of high-profile wins, including a $10 billion Army deal and a $30 million ICE contract, reinforcing its role in national security AI applications. The news has triggered a surge in institutional and retail buying, with turnover reaching 46.19 million shares, reflecting strong short-term demand.

Application Software Sector Volatile Amid AI Hype
The Application Software sector remains fragmented, with Microsoft (MSFT), the sector leader, down 2.83% on the day. While Palantir’s rally is driven by defense-specific contracts, broader software peers face mixed momentum. Sector news highlights AWS outages disrupting platforms like Reddit and Fortnite, underscoring infrastructure risks. However, AI-driven software firms like Palantir are benefiting from government and enterprise adoption, contrasting with the sector’s overall volatility.

Leveraged ETFs and Call Options Lead the Charge
• 200-day average: $142.93 (well below current price)
• RSI: 67.3 (approaching overbought territory)
• MACD: -0.116 (bullish crossover with signal line)
• Bollinger Bands: Price at 190.62 (upper band), suggesting overextension
Palantir’s technicals and options activity point to a continuation of the bullish trend, with key resistance at $190.62 and support at $181.01. Leveraged ETFs like Direxion Daily PLTR Bull 2X (PLTU) and GraniteShares 2x Long PLTR (PTIR) are amplifying the move, with PLTU up 10.8%.
Top Options Picks:
• PLTR20251219C185
- Type: Call
- Strike Price: $185
- Expiration: 2025-12-19
- IV: 45.73% (moderate)
- LVR: 21.73% (high leverage)
- Delta: 0.6616 (moderate sensitivity)
- Theta: -0.7526 (rapid time decay)
- Gamma: 0.0254 (high sensitivity to price changes)
- Turnover: $5.78M (liquid)
- Payoff at 5% upside (ST = $199.36): $14.36/share
- Why it stands out: High leverage ratio and gamma make it ideal for a continuation of the rally, with strong liquidity to manage entry/exit.
• PLTR20251219C190
- Type: Call
- Strike Price: $190
- Expiration: 2025-12-19
- IV: 45.10% (moderate)
- LVR: 32.51% (high leverage)
- Delta: 0.5256 (moderate sensitivity)
- Theta: -0.6760 (rapid time decay)
- Gamma: 0.0280 (high sensitivity to price changes)
- Turnover: $4.49M (liquid)
- Payoff at 5% upside (ST = $199.36): $9.36/share
- Why it stands out: High leverage and gamma position it to capitalize on a breakout above $190.62, with moderate IV to avoid overpricing.
Trading Outlook: Aggressive bulls should target PLTR20251219C185 into a close above $190.62, while PLTR20251219C190 offers a high-leverage play on a sustained rally. Watch for a breakdown below $181.01 to trigger short-term profit-taking.

Backtest Palantir Stock Performance
Palantir's (PLTR) performance after an intraday surge of 4% in 2022 shows a significant bullish momentum that has continued into 2025. The stock's trajectory can be analyzed as follows:1. 2022 Surge: The 4% intraday surge in 2022 set the stage for Palantir's strong performance in the following years. This spike was likely a catalyst for increased investor confidence, which has been sustained despite market fluctuations.2. 2023 Performance: In 2023, Palantir's stock continued to rally, although the overall percentage increase was lower than in 2022. The company's strategic expansions, including a $1.5 billion UK defense deal and a $10 billion U.S. Army contract, contributed to its upward trend.3. 2024 Acceleration: The stock's performance accelerated in 2024, with a notable $448 million U.S. Navy contract for nuclear submarine supply chain management. This contract, along with Palantir's ShipOS platform, has reinforced its position in defense technology and bolstered investor optimism.4. 2025 Surge: In 2025, Palantir's stock surged by 151% year-to-date, significantly outperforming the industry average. The company's strong fundamentals and strategic government contract wins have driven this impressive growth.Overall, Palantir's performance after the 4% intraday surge in 2022 demonstrates a sustained upward trend, with the company's strategic contract wins and technological advancements playing critical roles in its success. The stock's ability to consistently attract high-value contracts and leverage AI/ML platforms for government operations has been a key factor in its remarkable performance over the past three years.

Palantir’s Bull Run: Ride the Wave or Secure Profits?
Palantir’s 4.4% surge on the Navy contract underscores its dominance in defense AI, but the stock’s 160x sales multiple and RSI near overbought levels suggest caution. The $190.62 upper Bollinger Band and $181.01 support are critical for trend continuation. While leveraged ETFs and call options like PLTR20251219C185 offer high-reward setups, traders must monitor Microsoft’s (-2.83%) performance as a sector barometer. Action: Secure profits above $190.62 or consider short-term call options for a controlled bullish bet.