Palantir Options Volume Vaults Above Tesla, Nvidia, After Earnings Beat
$Palantir Technologies Inc.(PLTR)$
Volume climbed to 1.16 million put and call options as of 12:03 p.m. in New York, more than double the 20-day average. That vaulted Palantir above $Tesla (TSLA.US)$'s 802,060 contracts and $NVIDIA (NVDA.US)$'s 910,250, becoming the most active stock option in the first hour-and-a-half of trading Tuesday.
The surge came after the software company that derives almost half of its revenue from government contracts, saw its shares gapped 22% higher Tuesday as revenue climbed by almost a third, buoyed by what CEO Alexander Karp described as an "unrelenting AI demand that won't slow down."
Third quarter adjusted earnings of 10 cents per share surpassed Bloomberg consensus by 11%. That's the fifth straight time that Palantir beat estimates, according to data compiled by Bloomberg. Revenue has exceeded Wall Street expectations every quarter since it became a public company in 2020, data showed. The company raised its 2024 operating profit outlook to a range of between $1.05 billion and $1.06 billion, also above consensus.
The stock's 22% jump Tuesday to $50.69 took gains over the past six months to more than 117%. The rally and the latest financial reports put the stock price at 135.53 times estimated earnings for the end of 2024, according to data compiled by Bloomberg. That's a pricier valuation compared to Nvidia, which has a forward PE ratio of 49 times, and Tesla's 104 times.
That explains why only 20% of the analysts who tracks Palantir have a buy rating on the stock, while 30% have a sell recommendation. The rest say hold. In contrast, 89% of the analysts who track AI-darling Nvidia have a buy rating on the stock and just 2.7% say sell.
The heaviest volume so far are in call options that give the holders the right to buy Palantir shares at $50 in three days, with 76,740 contracts changing hands so far. The price of those calls soared 81% as the stock price rally pushed the contract in-the-money.
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