Today, we introduced two new option ideas for Palantir (PLTR) and Lockheed Martin (LMT). We view Palantir as a prime beneficiary of increased government automation, driven by federal workforce reductions. Meanwhile, Lockheed Martin remains a cornerstone of U.S. technological dominance, supported by the military-industrial complex’s innovation cycle and broader technological spillover effects. We’ll delve deeper into these opportunities in a separate report on Friday.
Trade tensions between the U.S., China, and the EU continue to escalate. In Europe, right-wing parties are gaining traction as multiple EU economies slip into technical recession. Several political candidates have expressed intentions to reinstate Russian energy imports, with Moscow likely to demand payment in Rubles rather than Euros or Dollars. While this scenario presents significant challenges, we believe Donald Trump will continue courting both the EU and Russia to defend the petrodollar and potentially prevent Europe from shifting its energy alignment toward Russia. Meanwhile, President Vladimir Putin appears reluctant to engage in peace talks over Ukraine.
Trade Updates
The stock has seen a sharp decline following reports that the Trump administration plans to cut defense spending by 8% annually over the next four years, ultimately targeting a 50% reduction. However, with plans to eliminate 100,000 federal jobs, we see Palantir as a key beneficiary of the growing demand for government automation. The company could deploy up to a billion AI agents over the next decade to streamline bureaucratic processes. Furthermore, as Palantir extends these automation solutions to major corporations and foreign governments, its value proposition will strengthen—especially as the first wave of U.S. federal contracts materializes.
Palantir Technologies (PLTR) Option Idea
The stock faces growing pressure amid increased scrutiny on major defense contracts, fueled in part by Elon Musk’s DOGE initiative. Meanwhile, as the U.S. shifts more defense responsibilities to its European allies, European elites are scrambling to maintain global influence. This shift is expected to accelerate defense procurement efforts, positioning Rheinmetall, Saab, and Lockheed Martin as key beneficiaries.
Lockheed Martin's stock is down 10% year-to-date and has fallen about 29% from its all-time high. This decline aligns with the U.S. military-industrial complex’s innovation cycle, where cutting-edge technology is initially developed within the defense sector—via DARPA and major contractors—before being commercialized across industries. Historically, this cycle has driven advancements in radars, cellular networks, semiconductors, the internet, touchscreens, robotics, drones, and 3D printing.
Lockheed Martin (LMT) Option Idea
The stock has performed exceptionally well, with option premiums surging to $9.50 (+90%). Conservative estimates place premiums between $14–$16 (+180% to +220%). Cheniere reported strong Q4 earnings, with adjusted EPS of $4.33, significantly exceeding the $2.69 estimate—a 60.97% earnings surprise, though lower than last year’s $5.76 per share.
Cheniere Energy (LNG) Option Idea
Since last week's update, the Tesla option idea has declined by 10%. This remains a volatility trade designed for significant gains if the stock experiences a sharp move in either direction.
Tesla (TSLA) Option Idea
Our trade on Nvidia (NVDA) is currently up 73%. We expect option premiums to hover around $20 for a while, presenting an opportunity to exit at around +77%. Premiums on this option could conservatively go to around $25 over the next several weeks (+111%), presenting a comfortable exit point at around $24 (+100%).
Nvidia (NVDA) Option Idea
Our stance on Google was validated, with option premiums declining another 15%:
With Google's disjointed product strategy, it's unlikely that the Google stock will recover before the end of April, just a month before the Google IO event. We believe that investors distrust Google's current CEO, Sundar Pichai, particularly in his ability to deliver new products. Additionally, Google is facing heightened antitrust scrutiny in the US, and the EU. Given that the contract expires in mid-April, this option may carry significant risk.
We’ll release a new Google trade idea when market conditions align, targeting a longer expiration window.
Alphabet Inc. (GOOGL) Option Idea
Option premiums on the Oracle option idea are currently around $17.40 (+74%). The trade has performed very well.
