Palantir's Exceptional Rally Meets Bubble Fears, Forming The Undercurrent For Direxion's PLTU, PLTD ETFs

Author: JE Insights | October 14, 2025 08:10am

No matter how one views the sheer performance statistics of Palantir Technologies Inc. (NASDAQ:PLTR), it's difficult not to use superlatives. Since the start of the year, PLTR stock has gained more than 134% while in the past 52 weeks, the upside performance pops to over 308%. Since its first public session, the equity has returned early stakeholders 1,826%.

Driving the bull case is the company's robust financial performances. In the second quarter, Palantir posted earnings per share of 16 cents, exceeding Wall Street analysts’ consensus expectation calling for 12 cents. In the year-ago quarter, the big data analytics specialist put up 9 cents per share.

On the top line, Palantir generated revenue of $1 billion, exceeding the consensus view by 6.94%. Moreover, the company blew past last year's sales tally of $678.13 million. With growth seemingly on a perpetually ascendant track, investors have consistently bid up PLTR stock. As evidence, the security has almost doubled in the past six months.

Fundamentally, Palantir disclosed a 30% year-over-year increase in average spend among its top 20 clients, nominally averaging $75 million. In addition, the tech giant's contracted order backlog has jumped a remarkable 77% on a year-over-year basis, reaching $2.4 billion. Combined with geopolitical instability and the prospects of lingering tensions with adversarial entities, Palantir seemingly commands an ever-expanding runway.

Still, as last week's volatility — in which PLTR stock lost 2.35% after jumping to a solid lead — demonstrated, no one is immune to downside pressures. At the time, President Donald Trump shocked the market with a renewed tariff threat to China. In response, investors fled risk-on growth names like PLTR and sought cover under more reliable alternatives.

Adding to concerns, several experts have sounded the alarm about a possible bursting of the valuation bubble in artificial intelligence. Even from the standpoint of common sense, PLTR stock carries risks. With so much forward growth and earnings baked into the current stock price, early stakeholders will almost surely be tempted to take some profits off the table.

The Direxion ETF: With both sides of the sentiment table having justification for their beliefs, financial services provider Direxion has delivered a solution: countervailing exchange-traded funds to allow both bulls and bears to speculate on PLTR stock.

Specifically, the Direxion Daily PLTR Bull 2X Shares (NASDAQ:PLTU) tracks 200% of the daily performance of the namesake equity. On the other end, the Direxion Daily PLTR Bear 1X Shares (NASDAQ:PLTD) tracks 100% of the inverse performance.

Primarily, the main purpose behind Direxion ETFs is to facilitate a convenient mechanism for speculation. Ordinarily, those interested in leveraged or inverse positions must resort to the options market, which may feature unique complexities. In contrast, Direxion funds are debit-based transactions where the most money that can be lost is whatever is put in.

Still, prospective participants must be aware of the very real potential of losing capital. For one thing, leveraged and inverse funds tend to be more volatile and unpredictable relative to vanilla funds tracking benchmark indices like the Nasdaq Composite. Second, Direxion ETFs are designed for exposure lasting no longer than one trading session. Holding beyond this recommended period may expose traders to positional decay due to the daily compounding effect.

The PLTU ETF: While the PLTU ETF suffered a huge 11% drop on Friday, it has still managed to gain 245% since the start of the year.

• Although the latest bout of volatility initially placed PLTU on top of its 50-day moving average, the price action remains well clear of the 200 DMA.
• One risk factor to watch moving forward is the declining volume level. Ordinarily, as price rises, volume should confirm the trend, not contradict it.

The PLTD ETF: On the other side of the table, the PLTD ETF gained over 5% on Friday but has overall lost around 70% of value since the beginning of this year.

• As would be expected, PLTD's price action is struggling below the 50 and 200 DMAs. Also, the 20-day exponential moving average has imposed upside resistance.
• What's very interesting about the PLTR inverse fund is that volume has risen dramatically in recent months. At the same time, the decelerative trend is stabilizing.

Featured image by Brian Penny on Pixabay.

Posted In: PLTD PLTR PLTU