The GraniteShares 2x Long PLTR Daily ETF, which tracks Palantir Technologies, is experiencing a downturn due to broader market conditions and specific challenges facing growth stocks. A hotter-than-expected U.S. jobs report released on January 10, 2025, has led to a spike in Treasury yields, causing concerns that the Federal Reserve may halt its rate-cutting campaign. This development has put pressure on growth stocks, including Palantir, as investors become more conservative in response to potential interest rate hikes. The report showed U.S. payrolls grew by 256,000 in December, significantly surpassing the expected 155,000, and the unemployment rate fell to 4.1%. These figures have shifted market expectations, with traders now giving a 97% probability that the Fed will maintain current rates in its upcoming meetings.
Palantir's stock, a key component of the ETF, is also facing valuation concerns. Despite impressive growth in 2024, with a 340% increase in stock value, analysts are cautious about its future performance. Palantir's valuation, trading at 69 times sales, is considered high compared to other software companies, raising fears of a potential bubble. While Palantir's business continues to perform well, with strong revenue growth and profitability, the stock's elevated valuation may limit its upside potential in 2025. This sentiment is contributing to the ETF's current price movement.
The GraniteShares 2x Long PLTR Daily ETF (PTIR) is down 7.29% as of 10:00 AM on January 10, 2025, with a current price of $97.38.