Shares of Palantir ( PLTR ) have been in a massive downtrend ahead of the company’s fourth-quarter earnings, but options traders seem to believe they will rebound after the release on Feb. 2 after the bell. Analysts expect the artificial intelligence (AI) data analytics company to report earnings of $0.17 per share for the fourth quarter, up more than 20% year-over-year.

At the time of writing, Palantir shares are down more than 25% from their November high.

Options traders are currently pricing in an 8.67% move in PLTR shares through the end of this week, according to data from Barchart. That means the Nasdaq-listed company could trade at nearly $163 within days of its Q4 release.

Additionally, long-term derivatives contracts are also biased to the upside, with those expiring in mid-April suggesting a continued rally for Palantir Technologies to around $175.

Investors should also note that AI stock’s standard relative strength index (14-day) is around 23 at the time of writing, indicating oversold conditions that often precede a strong bounce.

Louie DiPalma, senior analyst at William Blair, agrees with options traders on Palantir stock.

According to DiPalma, the Denver-based company is experiencing continued traction in both government and business deals, which will generate good results and ultimately lift the company’s stock price in 2026.

DiPalma agreed that PLTR is expensive at around 191 times forward earnings, but also said the premium is defensible compared to the valuations of other AI names secured in the private market last year.

In his research note, the analyst said Palantir will top $200 per share over the next 12 months, indicating a potential upside of at least 35% from here.

Interestingly, William Blair isn’t the only Wall Street firm predicting a strong rally in Palantir.

According to Barchart, the consensus rating remains at “Hold,” but the average target is around $202, reinforcing that PLTR stock could rise significantly through the remainder of 2026.

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As of the date of publication, Wajeeh Khan had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com