Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.
Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in PLTR.
Takeaways
Palantir enters 2026 after a blockbuster 2025, but the stock has shifted into sideways action as traders debate whether growth can justify premium valuations.
AIP adoption and government contracts drive the bull case, while competition and price-to-sales multiples north of most software peers fuel the bear narrative.
Earnings on February 2 could be the catalyst, setting up a tactical window for both bullish and bearish traders.
Palantir Technologies, Inc.. (Ticker: PLTR) was the one of top-performing stocks in the S&P 500 in 2025. But the uptrend stalled out over the past several months, which has left the stock in rigid sideways action. Can bulls bring this high-flying name back to life or will bears finally have their say in 2026?
Bringing the Future’s Technology to Present
Palantir is a dominant force in data analytics, decision intelligence, and artificial intelligence, serving both government and commercial clients. Its flagship Artificial Intelligence Platform (AIP) continues to gain massive traction, enabling enterprises to deploy agentic AI for operational decision-making with rapid "Bootcamp" deployments that deliver value in days rather than months.
Its core platforms like Gotham (government-focused) and Foundry (commercial data OS), enhanced by AIP, drive a loyal and expanding customer base with high switching costs and recurring revenue. Key growth drivers include massive demand for AIP in industries from defense to healthcare and manufacturing, strategic partnerships (e.g., with Nvidia for accelerated computing and Snowflake for data integration), landmark government contracts (such as multi-billion deals with the U.S. Army), and expansion into mid-market via "AIP Lite." The company is reaping benefits from the broader "AI supercycle," where enterprises demand measurable ROI from AI investments.
Traders that think Palantir can resume its uptrend may find a trade with Direxion’s Daily PLTR Bull 2X Shares (Ticker: PLTU), which seeks daily investment results, before fees and expenses, of 200% of the performance of Palantir Technologies, Inc. common stock (Ticker: PLTR).
Below is a daily chart of PLTR as of January 15, 2026.
Source: TradingView.com
Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.
The performance data quoted represents past performance. Past performance does not guarantee future results.
Valuations Beyond Orbit
Palantir’s greatest scrutiny comes over its elevated valuation, as it trades at a forward price-to-sales multiple well over 100x in recent periods—far above most software peers. While growth continues, with projections for 2026 revenue in the $5.5–$6 billion range (implying 30–40%+ growth), the stock's premium pricing assumes astronomical forward growth.
Plus, competition is heating up in enterprise AI from tech giants like Microsoft (with Azure AI and Copilot), Amazon (AWS tools), Google Cloud, and emerging players, though Palantir differentiates through its ontology-driven, secure, and auditable approach—particularly appealing in regulated sectors.
Government reliance (historically around half of revenue) introduces some political and contract renewal risks, with occasional scrutiny over non-competitive bidding or data handling in deals, though no major antitrust actions like those facing bigger tech peers have materialized prominently.
Traders should closely monitor the next earnings report on February 2. If Palantir misses on results or issues poor guidance, it could be a catalyst for a pullback. In this situation, Direxion’s Daily PLTR Bear 1X Shares (Ticker: PLTD), which seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of Palantir Technologies, Inc. (Ticker: PLTR).
How Traders May Position
Bullish Setup: Playing for a Breakout
Traders who believe Palantir’s Artificial Intelligence Platform adoption, expanding commercial footprint, and government contract momentum can reignite upside may look to Direxion Daily PLTR Bull 2X Shares (Ticker: PLTU).
PLTU seeks daily investment results, before fees and expenses, of 200% of the performance of Palantir Technologies, Inc. common stock (Ticker: PLTR), making it a tool for traders targeting short-term moves tied to earnings, contract announcements, or AI adoption headlines.
Bearish Setup: Fading Valuation Risk
Those focused on Palantir’s premium valuation, rising enterprise AI competition, or the risk of cautious guidance around the February 2 earnings report may consider Direxion Daily PLTR Bear 1X Shares (Ticker: PLTD).
PLTD seeks daily investment results, before fees and expenses, of 100% of the inverse performance of Palantir Technologies, Inc. common stock (Ticker: PLTR), offering a way to position for potential pullbacks.
* Definitions and Index Descriptions
An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.
Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.
Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with PLTR and may increase the volatility of the Bull Fund.
Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with PLTR and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to PLTR is impacted by PLTR’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to PLTR at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to PLTR increases on days when PLTR is volatile near the close of the trading day.
Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with PLTR and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to PLTR is impacted by PLTR’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to PLTR at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to PLTR increases on days when PLTR is volatile near the close of the trading day.
Palantir Technologies Inc. Investing Risk – Palantir Technologies Inc. faces risks associated with: a limited number of customer accounts for a substantial portion of its revenue; the development and deployment of new technologies; reliance on or capability with third-party products and services; the ability to hire, retain, train and motivate qualified personnel and senior management; sales and operations; intense competition; among other risks.
Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.
Software Industry Risk — Companies that develop and implement computer software can face risks associated with intense competition, especially in new product development, deployment and delivery, product obsolescence or saturation, cybersecurity risks as well as changes in regulation especially with respect to consumer or customer data, and risks associated with technology.
Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily PLTR Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.
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