Trader Banks Tesla Short Profit, Eyes Palantir Put Spread
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- Tesla reported Q2 revenue of $28.2 billion, up 26% year over year, that beat consensus, but adjusted EPS of 34 cents missed the 50-cent consensus by a wide margin.
- Tesla's operating margin compressed to 1.4% and a 142% surge in capital spending pushed free cash flow negative, sending shares down roughly 14.5% Thursday.
- The trade thesis recommends closing the August 360/330 Tesla put spread at roughly $23 — more than double the entry price.
- For a follow-up, the recommendation is to buy a Palantir August 21 $120/$95 put spread for about $6.50, funded with Tesla profits, targeting a ~23% decline to $95.
- Palantir reports August 3rd, and its commercial backlog growth slowed to 12% in Q1 from 21% in Q4 2025, per Bloomberg.
- Palantir's historical average earnings-window move is roughly 26%, though options are pricing only a 9.5% one-day move at 65% implied volatility.
- Palantir still trades at a material premium to its software peer group and well above its own historical EV/sales average, despite recent declines.
Why it matters: The thesis turns on Palantir being another 'priced-for-perfection' name vulnerable to disappointment, with the source flagging slowing commercial backlog (12% vs 21%), a stated tenfold-revenue ambition without sales-force scaling, and growing competition from direct LLM deployment. Options pricing a 9.5% move against a 14%+ long-term average — and well below the 26% historical earnings-window move — suggests puts may be cheap, tilting the risk/reward in the bear's favor if the August 3 print underwhelms.
