Why Palantir's Rule Of 127 Is A Nightmare For Short Sellers

Core Insights - Palantir Technologies Inc reported a 70% year-over-year revenue increase to $1.41 billion, significantly altering the risk profile of the stock with a Rule of 40 score of 127% [1][2] - The company experienced a 137% growth in U.S. commercial revenue, indicating strong demand for its analytics services [2] - Revenue guidance for 2026 is set at $7.2 billion, suggesting a shift from potential to momentum in the company's growth narrative [3] Technical Analysis - Prior to earnings, Palantir's stock was under pressure, trading at $146.59 and below the 50-day moving average, but post-earnings, the stock surged 7-9% in pre-market trading, reclaiming the $150 resistance level [3][4] - The Relative Strength Index (RSI) improved from the low 30s, and the MACD indicator turned positive, indicating a shift from distribution to accumulation [4] - The trading volume was approximately double the average, suggesting institutional re-pricing rather than retail speculation [5] Investor Sentiment - The recent performance indicates a regime change for Palantir, combining strong fundamentals with a repaired technical chart and significant institutional interest, which could negatively impact short positions [6]