Palantir Bulls and Bears Set for an August Showdown

Key Points

• Palantir stock is up over 100% in 2025 but faces valuation concerns ahead of its August 4 earnings report.
• Technical indicators show continued bullish momentum, but options activity suggests traders are bracing for a potential pullback.
• Passive fund inflows and AI ETF exposure may be fueling PLTR’s rise, not just fundamentals or retail investor enthusiasm.

Palantir Technologies Inc. NASDAQ: PLTR continues to exceed expectations. As of July 21, the stock was up 102% in 2025. Perhaps more impressively, PLTR stock is up more than 68% after a pullback of approximately 40% between mid-February and early April.

The next significant catalyst for Palantir may come from its earnings report, which is scheduled for August 4. The company has a history of beating revenue expectations, and is now solidly profitable. The question is whether it can live up to investors’ elevated expectations.

Even if Palantir delivers blowout earnings, many investors find it hard to see past its lofty valuation, even in a pricey tech sector. PLTR stock is trading at around 665x earnings and 126x sales.

Even for a company with a healthy balance sheet, many investors aren’t buying into future growth that will depend on flawless execution and exponential growth.

Palantir stock sits at the intersection of bullish momentum and valuation anxiety. The deciding factor likely comes down to who’s buying PLTR stock, and the answer may be a surprise.

PLTR Stock Has Technical Strength That Points to Bullish Momentum

Palantir bulls will say don’t fight the chart, and they have a case. Since hitting its low in April, the PLTR stock chart shows a classic bullish pattern of higher highs.

The stock also continues to find support above its 50-day simple moving average (SMA), confirming plenty of willing buyers. Adding to the bullish case is that even with overall volume being down due to seasonal factors, the stock’s green (i.e., positive) days are supported by solid volume.

Skeptics could point to the relative strength indicator (RSI), which is between 60 and 70. However, since the stock’s recent run, the RSI has been moving in a range that suggests neither overbought nor oversold conditions, which adds further support to the idea that the stock isn’t breaking down from a technical perspective.

Traders Are Growing More Cautious

The Palantir options chain for August 8 contradicts the current sentiment of retail and institutional investors. That’s approximately one week after the company reports earnings on August 4.

Traders are showing increased interest in near-the-money puts, while call volume fades at higher strike prices. At the same time, implied volatility is beginning to cool, suggesting expectations for explosive upside are waning.

This activity implies that options traders see Palantir’s recent rally as potentially losing steam and are positioning for a period of consolidation or downside in the near term.

What May Be Causing the Disconnect in PLTR Stock?

Palantir shareholders will remember that PLTR stock has been added to the S&P 500 and the Nasdaq-100 in the last nine months. This is more than just a symbolic designation. Inclusion in those indexes means that Palantir stock is rising because of an influx of capital into passively managed funds and AI-focused ETFs.

This these automatic purchases are likely a key reason for Palantir stock's increase. They are driven by the company’s expanding market capitalization and AI sector position, rather than its fundamentals. Importantly, this contradicts the narrative that PLTR stock is a meme stock being mindlessly driven higher by retail investors.

But fund investors understand that money can flow out of funds as quickly as it came in. That's why Palantir’s upcoming earnings report will continue to draw interest from investors. PLTR stock is priced for perfection, and then some. If the company doesn’t deliver a blowout report, it could give fund investors a reason to trim their positions.

If that does happen, it’s not a reflection of the company's value but merely a healthy pullback that could set investors up for higher highs in the future. That’s the growing sentiment among analysts, such as Dan Ives of Wedbush, who has set a $160 price target for PLTR stock.