Palantir Sees Heavy Trading for $35 Call Options as Stock Jumps on Inclusion to S&P 500

The stock jumped as much as 12.9% Monday to $34.23, the highest since early 2021. That share price rally moved the $35 call options closer to being in-the-money, sending the price of the contract soaring more than 200%.  

More than 86,000 call options with the $35 strike price changed hands as of 11:55 a.m. in New York across 17 expiration dates that stretch through Dec. 18, 2026. That's the most for any strike price both on call and put options. More than two-thirds of that volume is sitting in call options expiring this week and the next, data compiled by moomoo showed.

Wedbush analyst Dan Ives said Palantir's addition to the S&P is a "validation moment" for the stock, Bloomberg reported.

That "is an important moment in the Palantir story that we believe marks a new era of enterprise growth and profitability over the next few years," Ives was quoted by Bloomberg as saying.

Palantir will join the benchmark after a 97% jump in the stock this year. The data-analysis software company has been an investor darling, having consistently beaten analysts' quarterly revenue estimates since 2020, data compiled by Bloomberg showed.

The stock "trades at the highest enterprise value-to-sales compared to its cloud software peers in anticipation of its inclusion in the S&P 500 index," Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz wrote in a note Friday. "The company's strong performance in its Commercial segment and recent alliances with Microsoft Azure OpenAI and Oracle will be crucial to support the valuation premium as Palantir may hope to expand institutional ownership of its stock."

Amid the rally, the technical indicators tracked by moomoo are flashing warning signals. Ten of the 15 gauges are showing that the stock may now be overbought, and the trend could turn bearish.

So far Monday, inflows into the stock has outpaced outflows by $60.77 million. That pares this month's net outflows to $84.1 million.

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