Palantir Earnings Preview: Options Traders Brace for 9%+ Stock Swing
Palantir Technologies (PLTR) is set to release its fourth-quarter financial results after Monday's market close, with traders positioning for another period of heightened volatility. The data analytics firm, long a favorite among investors betting on artificial intelligence software, finds itself at a critical juncture as enthusiasm for pure-play AI software names cools relative to semiconductor and hardware makers.
Current options pricing implies an expected move of at least 9% in Palantir's share price by the end of next week. Based on Friday's closing price near $147, this projects a potential swing between roughly $133 on the lower end and $158 on the upper end. A drop to the $130s would erase the stock's year-to-date gains and mark a level not seen since July, underscoring the heightened stakes surrounding this report.
The backdrop is challenging for software-centric AI plays. After a spectacular 2025 that saw Palantir shares surge approximately 135%—driven by its designation as a "best-in-class AI enabler"—the stock has retreated nearly 30% from its early November record highs. This pullback reflects broader concerns that valuations across the AI sector have become stretched, prompting a rotation into companies seen as more fundamental to the AI infrastructure build-out.
For the quarter, consensus estimates compiled by Visible Alpha point to record revenue of $1.34 billion and adjusted earnings per share of $0.23. Both figures would represent year-over-year growth exceeding 60%, maintaining Palantir's impressive trajectory. However, the company's history shows strong numbers alone may not be enough: last quarter, Palantir beat expectations, yet its stock sold off sharply in the subsequent days on valuation worries.
Analyst sentiment remains mixed. Of the nine current ratings tracked by Visible Alpha, four recommend "Buy" while five advise "Hold." The average price target sits near $189, suggesting a potential 30% upside from current levels and implying faith in a recovery past November's peak. This divergence highlights the central debate: whether Palantir's government and commercial contract growth can justify its premium valuation in a more selective market.
Market Voices:
"The fundamentals are still rock-solid," says Michael Torres, a portfolio manager at Horizon Capital. "The sell-off is a typical pre-earnings noise. If they guide well, we could see a sharp reversal."
Sarah Chen, an independent retail investor, expresses optimism: "I've held through bigger swings. Their government business provides a floor, and the commercial adoption story is just getting started."
"This is a classic bubble deflation," argues David R. Klein, a vocal skeptic and financial commentator. "The AI hype machine is shifting gears, and Palantir's valuation remains utterly disconnected from reality. A 9% move? It should be 20% down."
"The options market is pricing a binary outcome," observes Dr. Anya Sharma, a fintech professor. "It's no longer just about beating estimates. The market demands flawless execution and guidance that reassures on competitive moats and profitability."