According to CNBC, several companies reporting earnings this week could see significant stock price swings based on current options trading activity. Palantir is expected to gain or lose as much as 8.9% after posting earnings Monday, with analysts estimating $1.09 billion in revenue and 17 cents per share for the third quarter. Snap could move as much as 13.8% in either direction after Wednesday’s earnings, with Wall Street expecting 12 cents per share on $1.49 billion in revenue. Palantir shares have surged nearly 400% over the past 12 months, buoyed by a $10 billion, 10-year Army contract and increased government surveillance contracts, while Snap has fallen 28% this year amid declining user numbers and competition from Meta’s Instagram. These potential moves highlight the high-stakes nature of this earnings season.
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The Government Contract Gold Rush
Palantir’s remarkable 400% surge over the past year isn’t just about earnings—it’s about fundamentally shifting how governments operate. The company has successfully positioned itself as the operating system for national security and intelligence agencies, with their $10 billion Army contract representing a watershed moment. What makes this particularly strategic is the 10-year duration, which provides revenue visibility that most tech companies can only dream of. Unlike consumer tech companies that face constant market shifts, Palantir has built a business model that essentially creates government dependency—once agencies integrate their systems, switching costs become prohibitively high. The real business genius here is their pivot from pure intelligence work to broader military and civilian government applications, effectively creating multiple revenue streams within the same customer base.
Snap’s Platform Identity Crisis
Snap’s potential 13.8% volatility reflects deeper structural challenges in the social media landscape. The company faces what I call the “platform middle child syndrome”—too big to be niche, too small to compete with Meta’s ecosystem. While Meta Platforms can leverage Instagram’s Reels to directly attack Snap’s core features, Snap lacks the diversified revenue streams to withstand such competitive pressure. Their advertising business faces headwinds not just from user decline, but from the broader shift toward performance marketing where scale matters. Snap’s fundamental challenge is that it needs to decide whether it’s a social platform, a messaging app, or an AR company—and currently, it’s trying to be all three without the resources to win in any single category against specialized competitors.
What the Options Market Reveals
The options-implied moves tell a fascinating story about market expectations. Snap’s higher volatility (13.8% vs Palantir’s 8.9%) suggests traders see greater uncertainty about its future direction. This makes sense—Palantir’s government contracts provide predictable revenue, while Snap’s consumer-facing business faces more variables. The options market is essentially pricing in the difference between business models: Palantir’s enterprise sales cycles versus Snap’s advertising-driven volatility. What’s particularly telling is that despite Palantir’s massive run-up, the market still sees less risk in their earnings than Snap’s, suggesting confidence in their government-backed revenue streams.
Strategic Crossroads for Both Companies
Both companies stand at critical inflection points, though for different reasons. Palantir must demonstrate it can expand beyond government contracts into commercial applications without diluting its specialized expertise. Their challenge is becoming less dependent on political cycles and administration changes, particularly given their association with surveillance activities. Snap, meanwhile, needs to either find a profitable niche or consider strategic alternatives—the social media landscape is consolidating, and being the fourth or fifth player in a winner-take-most market is increasingly untenable. The coming quarters will determine whether these companies can evolve their business models to survive the next phase of tech maturation.
