Palantir Technologies experienced a rise of nearly +7% in trading after a strong Q4 performance was revealed. The company offers advanced software aiding governments and businesses in data handling and decision-making, especially in defence and healthcare.<\/p>\n
Palantir’s fourth quarter saw impressive results, with sales hitting $1.4 billion, a 70% increase from the previous year. U.S. revenue jumped by 93% to $1.07 billion, supported by a 137% rise in U.S. commercial revenue. Net income reached $608 million, exceeding expectations with an adjusted EPS of $0.25, alongside a record free cash flow of $791 million.<\/p>\n
In 2025, Palantir\u2019s revenue grew 56% year over year to $4.48 billion, with adjusted EPS increasing to $0.75. The company forecasted strong growth for 2026 with sales estimates between $7.18-$7.2 billion, surpassing Wall Street predictions. The growth is driven by increased U.S. commercial revenue and adoption of its AI platform.<\/p>\n
Palantir’s valuation stands out at 142X forward earnings and 56X forward sales, much higher than industry averages. Despite its high valuation, Palantir’s positive guidance and growth prospects suggest potential, but uncertainties remain regarding its status as a top tech pick for 2026.<\/p>\n
The big jump in Palantir’s stock after its earnings report means option prices are now very high. This inflated premium, or implied volatility, just spiked to over 85% for near-term contracts, well above its 52-week average of 55% that we saw for most of 2025. Any strategy we choose must account for the fact that these options will lose value as the excitement from the news fades, a phenomenon known as IV crush.<\/p>\n
Given the very strong guidance for 2026, we might expect the upward trend to continue after a brief pause. Instead of buying expensive outright calls, a bull call spread could be a smarter move to capture more upside while lowering our cost and mitigating the impact of falling volatility. We saw a similar situation after the Q3 2025 earnings, where the stock consolidated for two weeks before climbing higher, rewarding those who stayed bullish.<\/p>\n
However, we cannot ignore the stock’s extremely high valuation, which is now at 142 times forward earnings. This level is far above peers like Nvidia, which sits closer to 25 times, and could make the stock vulnerable to a pullback as profit-takers step in. Selling premium through strategies like a bear call spread might be wise, especially with the Federal Reserve signaling steady interest rates last week, which often caps enthusiasm for the most expensive growth stocks.<\/p>\n
For traders already holding a large position from last year, the 50% gain is significant and worth protecting. We could consider buying protective puts to guard against a sharp drop, or use a collar strategy to fund that protection by selling a covered call. This essentially locks in a price range for our shares, safeguarding recent profits from any short-term volatility.<\/p>\n","protected":false},"excerpt":{"rendered":"
Palantir surges after strong Q4, driven by U.S. commercial growth and AI adoption, despite high valuation.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40904","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40904"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40904\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}