Options bulls have been targeting PLTR amid the software stock's recent bouts of volatility
Palantir Technologies Inc (NYSE:PLTR) stock hit a three-year high of $31.20 this morning, before pivoting lower below $30. Don't let today's choppy price action fool you, PLTR has been carving a channel of higher highs all year, and options traders are along for the ride.
Palantir is near the top of Senior Quantitative Analyst Rocky White's list of tickers that attracted the most options volume during the last two weeks. Over that period, the stock saw 3,008,749 calls to 1,677,244 puts traded, one of the higher call-to-put ratios seen on the list, beyond large caps Nvidia (NVDA) and Amazon.com (AMZN). PLTR's weekly 8/9 30-strike call and August 30 call have been the most popular over this timeframe.
The software stock -- with heavy ties to U.S. military contracts -- traded as low as $21.23 the day of its earnings report on Aug. 6, but eventually scrambled higher by 10.4% by the end of the session. The shares are 73% higher in 2024, with support stepping up at their ascending 160-day moving average.
Despite the sizable gains, 11 of the 15 brokerages covering PLTR maintain "hold" or worse ratings, while the consensus 12-month price target of $25.07 is a 15.5% discount to its current perch. A shift in analyst perception could keep the wind at the stock's back.
With earnings out of the way, premium is affordably priced amid a volatility crush. PLTR's Schaeffer's Volatility Index (SVI) of 53% that sits higher than just 19% of annual readings. This means options traders are pricing in low volatility expectations.