Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How Palantir Became a Bull Market Lightning Rod in July 2026
Transcript
- Lucas: So Palantir is up more than 5 percent over the past five days. The S&P 500 is basically flat, the NASDAQ is down about seven-tenths of a percent — and yet Palantir just keeps climbing. That kind of divergence catches my attention. Luna: It is striking. Especially because small caps overall got hit — the Russell 2000 dropped almost 2 percent in that same window. So this isn't a broad risk-on move lifting everything. Lucas: Right. This is stock-specific. And I think it tells us something about how the market is currently rewarding companies that sit at the intersection of artificial intelligence and government spending. Palantir is basically the purest play on that thesis. Luna: Yeah, and the catalyst people are pointing to is a new contract. I saw reports that Palantir secured a deal with the U.S. Army for its TITAN system — that's the deep-sensing platform they've been developing. The value isn't enormous in the grand scheme, but it signals ongoing momentum. Lucas: Exactly. The dollar amount matters less than the signal. Every time Palantir wins another government contract, it reinforces the narrative that its software has become embedded in national security infrastructure. And once you're embedded, you're very hard to dislodge. Luna: But that's also the bull case that's been in place for a while. The question I keep hearing from listeners is: at 132 bucks a share, what's the valuation actually look like? Because Palantir has never been cheap. Lucas: No, it has not. The trailing price to earnings ratio is still north of 70. Even if you look at forward estimates — and analysts have been steadily raising them — it's north of 50. So by any traditional value metric, it looks expensive. Luna: And yet the stock keeps going up. So either the market is being irrational, or there's something about Palantir's earnings trajectory that isn't fully captured by a simple P/E multiple. Lucas: I think it's the latter. The bull market we're in has been rewarding companies that can demonstrate a clear path to expanding profit margins, especially from recurring revenue. Palantir's commercial business — its Foundry platform — is now growing faster than its government segment. That shift is huge. Luna: Right, because for years the knock on Palantir was that it was too dependent on the U.S. government, which meant lumpy revenue and limited upside. Now commercial revenue is approaching 50 percent of total, and it's growing at a 30 percent year-over-year clip. Lucas: And that's exactly the kind of transition that can justify a premium multiple. If the market sees that transition as sustainable — if they believe Palantir is becoming a platform company, not just a consultancy — then 50 times forward earnings starts to look reasonable in a world where the ten-year Treasury is yielding less than 4 percent. Luna: But we should also mention the Fed. The minutes from the June meeting just came out, and they showed what CNBC called a 'family fight' over the direction of rates. Some officials want to cut, some want to hold. Uncertainty lingers. Lucas: And that uncertainty tends to hit high-beta names like Palantir hardest when the mood turns sour. But in this case, the stock has shrugged it off. That tells me the company-specific narrative is overpowering the macro headwinds, at least for now. Luna: It's also worth noting that Palantir isn't alone in this. Cloudflare was up 11 percent over the same five days, and that's another company that the market has been rewarding for its ai adjacent positioning. So there is a theme here. Lucas: I think the theme is: the bull market is getting more selective. Earlier this year, everything with an AI angle went up together. Now, investors are demanding proof of execution. Palantir is showing that proof. Cloudflare is showing that proof. Datadog, on the other hand, was down slightly — still a great company, but maybe the market wants to see the next quarter before piling in. Luna: That selectivity is actually healthy. A bull market that lifts all boats can create bubbles. A bull market that rewards companies with real revenue acceleration and margin expansion is more sustainable. Lucas: Speaking of sustainable — you know, we talk a lot on this show about how to navigate markets without the noise of ads or sponsored content. It's something we deliberately choose not to do. These conversations are ad-free because we think the analysis should speak for itself. Luna: Yeah, and that's only possible because of listeners who support the show directly. If our money conversations have helped you think about a decision differently, and you want to keep them free from commercial interruptions, there's a simple way to help. Lucas: It's buy me a coffee dot com slash fexingo. No pressure, no perks, just knowing you're supporting the kind of independent market analysis that doesn't have to sell you anything. It means a lot. Luna: And we mean that. Now back to Palantir — one angle we haven't touched on is the insider selling. The CEO Alex Karp has been selling shares on a regular basis through a pre-arranged trading plan. How do you read that? Lucas: It's a point of debate. Some investors get nervous when they see consistent insider sales, but in Karp's case, he's been transparent that it's for tax planning and personal diversification. The plan was set up years ago. I don't read much into it. Luna: Plus, the insiders are still heavily invested. The co-founder Peter Thiel holds a massive stake. So it's not like the leadership is bailing. They're just managing their personal balance sheets. Lucas: Right. And honestly, if you look at the option activity on Palantir, it's overwhelmingly bullish. Call volume has been elevated, especially in the out-of-the-money strikes. That suggests the options market is positioning for further upside. Luna: But that can also be a contrarian indicator. When everyone is piling into calls, it sometimes means the easy money has been made. We saw that with some momentum stocks earlier this year that peaked and then corrected. Lucas: Fair point. But I'd argue that Palantir's current move is less about momentum-chasing and more about a fundamental reassessment. The company just posted its first gaap profitable quarter. That's a milestone. Once you're profitable and growing at 20-plus percent, the conversation changes. Luna: And they're generating meaningful free cash flow, too. In the most recent quarter, operating cash flow was over 200 million dollars. That gives them the flexibility to invest in R&D or pursue acquisitions. Lucas: Which brings us back to the bull market environment. We're in a period where the Fed may or may not cut rates, GDP growth is around 2 percent, and the market is rewarding companies that can grow faster than the economy without needing cheap debt. Palantir fits that bill. Luna: So where does the risk lie? If the commercial growth slows, or if a new administration decides to tighten defense spending, the stock could re-rate quickly. Lucas: Sure. And there's also competitive risk. Companies like Microsoft and Amazon are also selling AI and data analytics tools to the government. But Palantir has a moat in the sense that its software is already deeply integrated into classified workflows. Switching costs are enormous. Luna: I think that's the key takeaway. In this bull market, the stocks that are leading are the ones with high switching costs, recurring revenue, and expanding margins. Palantir checks those boxes. Lucas: And at 132 bucks, it's priced for perfection. But if the execution continues, perfection might be the right base case. That's the bet the market is making. Luna: Alright, let's leave it there. Next episode we'll look at a different corner of the market. Thanks for listening. Lucas: Yeah, and if you want to support the show, you know where to find us. Same time tomorrow.