Options Weekly | Palantir Leads AI Application Earnings, AMD and Qualcomm Deliver Hardware Results!

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The past week could be described as a "super week," with numerous major events overlapping; fortunately, the market ended with relatively minor turbulence. The overall earnings reports of tech giants were robust, progress in U.S.-China negotiations was positive, and the three major U.S. stock indices hit new highs during the week, with NVIDIA briefly becoming the first company in human history to reach a market cap of $5 trillion. Following this, the FOMC meeting cut rates as expected, but Powell's hawkish tone at the press conference led to a market pullback, resulting in a mild weekly gain.

Entering the first week of November, although macroeconomic data remains affected by the government shutdown, it is still a period of dense earnings announcements. This week, companies from both the AI application side and the hardware side will release their results, led by Palantir (PLTR) and AMD respectively, offering investors an opportunity to glimpse the latest landscape of the AI industry chain. Additionally, Tesla's shareholder meeting will be held on the 6th local time, where Musk’s $1 trillion compensation plan will be put to a vote.

How might the market evolve, and what are some corresponding options strategies? Let us delve into this week's edition of the "Options Weekly."

Palantir: Will the AI Application Giant Continue Its Meteoric Rise?

Palantir will release its earnings report after the market closes on Monday. For Q3 2025, revenue is projected to reach $1.092 billion, representing a year-over-year increase of 50.46%; expected earnings per share are $0.11, marking an 84.17% year-over-year increase. Palantir combines two major concepts—defense and artificial intelligence—and is one of the most closely watched stocks in the market. After surging nearly 350% last year, the company's stock has risen 160% year-to-date, with its market capitalization approaching $500 billion.

Opportunity Analysis

The company's revenue and profits for the last quarter exceeded market expectations, with Q2 revenue surpassing $1 billion for the first time. Earnings per share (EPS) increased by nearly 80% year-over-year. The market generally anticipates that this strong growth momentum will continue into Q3.

Commercial Business: The company's Artificial Intelligence Platform (AIP) aims to integrate artificial intelligence with big data analytics, helping government agencies and businesses process data more efficiently, establish workflows, and make intelligent decisions. This platform forms the core of the company's commercial operations. U.S. commercial revenue surged 93% year-over-year in Q2, with customer numbers growing by 43%. This momentum is expected to carry into Q3.

Government Business: Despite the ongoing U.S. government shutdown, Palantir’s government contracts are mostly long-term, making them less susceptible to short-term budget fluctuations. Additionally, the company signed a letter of intent with Poland's Ministry of Defense, marking its expansion into the European defense market.

It should be noted that Palantir’s high growth is accompanied by high valuation. As of early November, Palantir’s price-to-sales ratio had reached 138x, while its trailing twelve-month price-to-earnings ratio stood at 668x—both at historical peaks over the past five years and significantly higher than the industry average. Such elevated valuations imply that the market has already priced in substantial growth expectations; any slowdown in growth or conservative guidance from management could trigger a pullback.

Options Analysis

The PLTR options market suggests an anticipated stock price fluctuation of approximately ±9.87% on earnings day. Implied volatility prior to the earnings announcement was 70.43%, placing it at the 59th percentile over the past year and indicating relatively high historical levels, theoretically favoring option buyers.

Open interest for the week is concentrated between $200-$210, predominantly in call options. Based on market trading volumes, the put/call ratio is 0.46, signaling bullish sentiment regarding PLTR’s post-earnings performance.

(1) Selling Covered Calls

If you already hold a position but are concerned about limited upside potential in the short term, you can choose to sell calls corresponding to your position size at your target price. If the underlying stock price exceeds the strike price, you can sell your position at the predetermined target price. Further upward movement in the stock price will no longer impact strategy returns, though downside risk remains.

(2) Short Straddle/Strangle to Short Volatility

Following the release of earnings reports, a sharp drop in market uncertainty typically leads to a rapid contraction in implied volatility, also known as "IV Crush," regardless of the direction of the underlying asset price. For sellers, IV Crush can result in a swift decline in the value of options, potentially reducing it to zero. At that point, sellers may choose to close their positions by "selling high and buying low" to capture the spread or allow the options to expire worthless, thereby pocketing the entire premium to secure profits.

It is important to note that while these strategies have a relatively high probability of success, they carry theoretically unlimited risk. If there is an unexpected sharp unilateral surge or plunge in prices following the earnings report, significant losses may occur.

This week also features $Hims & Hers Health(HIMS.US)$ 、 $Tempus AI(TEM.US)$ 、 $Applovin(APP.US)$ 、 $Figma Inc(FIG.US)$ among a group of popular AI application stocks disclosing their earnings reports. Fellow investors may wish to stay tuned at that time.

AI Hardware Sector: AMD & Qualcomm Earnings Reports Incoming

AMD is set to release its earnings report after the market closes on November 4. The market expects adjusted earnings per share of $0.68, representing a 45% year-over-year increase, with revenue projected at $8.751 billion, up 28.33% year-over-year. Current sell-side investment banks are generally optimistic about this earnings report, primarily due to expectations that the data center business—on which the market is most focused—will exceed forecasts, driven by increased capital expenditures from cloud providers and orders stemming from the company's collaboration with OpenAI. Since announcing its partnership with OpenAI, AMD’s stock price has surged over 55%.

Opportunity Analysis

CPU Business: AMD has achieved record-breaking revenue in cloud and enterprise server CPUs, with its market share increasing for 33 consecutive quarters. The focus this quarter is on server and client CPUs, particularly the robust server performance which is expected to boost gross margins. Meanwhile, Intel’s Q3 data center business exceeded expectations, and AMD’s upcoming earnings report will determine whether this trend reflects broader industry demand or a market share battle.

GPU Business: Data center GPU revenue declined in Q2 due to export restrictions and product transitions; management expects Q3 to recover year-over-year as new products enter mass production. OpenAI's 6GW order based on MI450 will commence in the second half of 2026, not contributing to short-term revenue. Data center GPU revenue is projected to reach $14 billion by 2026 and double again by 2027, driven by the partnership with OpenAI.

PC Business: AMD has achieved high double-digit growth in its PC business for eight consecutive quarters, with its operating profit margin surpassing Intel’s for the first time in Q2 2024. However, its strength remains concentrated in high-end desktops, while it still lags in laptops, and overall revenue remains smaller than Intel’s.

Options Analysis

AMD’s options market implies a stock price fluctuation of approximately ±8.62% on the day of earnings. In the past 20 earnings reports, actual volatility was lower than expected in 15 instances. The current implied volatility is close to 70%, placing it at the 90th percentile over the past year, making it somewhat attractive for option sellers. The put-to-call ratio based on open interest (OI) has risen to 0.95, indicating heightened market anxiety and relatively higher premiums for put options. Open interest in call options for the current month is concentrated at $260/$300, while that for put options is clustered around $210/$220.

If you are bullish on the short-term outlook, consider a slightly out-of-the-money Long Call or implement a bull call spread to reduce the cost of a bullish position. This involves buying a call option with a lower strike price while selling a call option with a higher strike price, lowering the overall cost but also capping maximum profit potential.

If you are neutral-to-bullish and wish to collect premiums, consider using a Short Put to position for potential AI chip-related positive announcements in Q4. This strategy allows you to “buy at a target price if the stock falls to it, or keep the premium if it doesn’t.” If you are willing to take delivery of the shares, this is a relatively stable approach. If the stock price remains above the strike price at expiration, the put option will not be exercised, and you can pocket the entire premium. If the stock price falls below the strike price, you can purchase the corresponding number of shares at the pre-set price.

Qualcomm will release its earnings report after the market closes on November 5th Eastern Time. The market widely expects its Q4 revenue to be $10.74 billion, representing a year-over-year increase of approximately 4.8%. However, earnings per share are forecasted to decline nearly 10% year-over-year to $2.33, reflecting a situation of 'revenue growth without profit growth.'

Opportunity Analysis

Pay attention to the earnings report's description of Qualcomm’s AI chip roadmap. The market has long viewed Qualcomm as a company focused on mobile, PC, and automotive chips, and slowing growth in these sectors has weighed on its valuation. Last week, Qualcomm unveiled two generations of data center inference chips, AI200 and AI250, and announced Saudi HUMAIN as an anchor customer, planning to deploy approximately 200MW of computing power starting in 2026. Notably, AI200 is expected to become commercially available in 2026, one year ahead of market expectations, providing Qualcomm with a clear path into the AI inference market and acting as a catalyst for valuation improvement.

Core businesses: Recovery in smartphones, steady growth in automotive, and structural optimization in IoT.

• Smartphone business: Benefiting from upgrades in high-end platforms and the integration of AI functionalities at the device level, smartphone operations are expected to maintain moderate growth this quarter. Market attention will focus on whether the per-unit value continues to increase and whether channel inventory remains healthy.

• Automotive business: Having sustained double-digit growth for several quarters, the key highlights this quarter lie in the rollout of previously secured vehicle models and regional expansion. The realization of orders will directly translate into contributions to revenue and EBIT.

• Internet of Things (IoT): This quarter's focus for IoT revolves around the launch timing of iterative products such as smart glasses, wearables, and industrial applications. It is necessary to evaluate the impact of macro demand on low-end IoT; if demand for lower-end products weakens but high-end categories continue to grow, overall profitability is still expected to remain stable.

In summary, apart from short-term financial data, investors will be closely watching Qualcomm’s progress in AI inference chips as a potential driver for its second growth curve. Although the three core businesses—smartphones, automotive, and IoT—provide resilience in performance, any valuation breakout from the current range will depend on the execution pace of its AI strategy and customer adoption progress.

Options Analysis

Options signals indicate that the implied price movement for this earnings report is approximately ±6.23%. The current implied volatility (IV) stands at 44.18%, ranking in the 81st percentile over the past five years, reflecting relatively high option prices compared to historical levels, with expectations of continued short-term volatility. The Put/Call ratio has rebounded to 0.34, yet bullish sentiment remains dominant. Analysis of open interest this week shows a tug-of-war between bulls and bears, with call options concentrated around strike prices of $180–$190, while put options are centered between $165–$170.

In terms of options strategies, investors who are optimistic about the long-term trend of premiumization in the mobile phone business, as well as the iteration of AI-related products and ecosystem expansion, may also adopt a Short Put strategy. Conversely, if investors are bearish on the market outlook, they can employ strategies such as buying puts, purchasing bearish vertical spreads with put options, or selling bullish vertical spreads with call options.

Of course, this is just an example of a strategy. Investors can enter their predictions for stock price movements and target prices under the path 'Qualcomm Stock Page - Options - Options Strategies,' and select the corresponding expiration date. The system will then recommend different options strategies based on your judgment (e.g., bullish, bearish, or expecting a flat trend), along with displaying corresponding profit and loss charts.

Tesla Shareholders Meeting: Retail Power and Musk’s Stay-or-Go Gamble

Tesla is approaching its annual shareholders meeting, scheduled for November 6 Eastern Time. The central focus of this shareholder meeting lies in three major proposals: CEO Elon Musk’s compensation package, equity incentive plans, and whether Tesla should be allowed to invest in xAI. Among these, Musk’s compensation plan has the greatest market impact. Despite having received board approval, it still requires shareholder votes to take effect.

Opportunity Analysis

Market expectations generally suggest that this substantial compensation package will pass smoothly. Historical data indicates that a similar proposal in 2018 was approved with 73% support, and when reintroduced in 2024, it still garnered 72% approval. Elon Musk, who holds approximately 15% of the shares, has the authority to vote in his own favor, further increasing the likelihood of passage.

The key rationale supporting the proposal lies in Tesla's extensive retail shareholder base and Musk’s strong influence over this group. In the 2024 vote on the previous compensation package, retail shareholders supported it at a rate as high as 90%, becoming the decisive force. The board is making every effort to mobilize retail shareholder votes to consolidate this advantage. Notably, Chairwoman Robyn Denholm has explicitly warned that if the proposal is rejected, Tesla risks losing Musk, potentially triggering a collapse in the company's valuation. This “survival or destruction” narrative is likely to sway undecided shareholders toward support.

However, opposing voices cannot be ignored. Critics, such as the California Public Employees' Retirement System, argue that the board lacks sufficient independence, procedural flaws exist, and if the proposal passes, Musk would receive stock equivalent to 12% of total shares outstanding, significantly diluting existing shareholders' equity. Morgan Stanley has warned that if the proposal is rejected, the share price could face an immediate selloff exceeding 10%, akin to a vote of no confidence in leadership.

Options Analysis

Currently, the IV stands at 61.22%, placing it at the 31st percentile over the past five years, with current option premiums relatively low. The Put/Call ratio has recently risen, reflecting a marginal decline in short-term bullish sentiment, but overall sentiment remains positive. Market focus centers on upside opportunities, with call option trading volumes consistently surpassing put options. Open interest for call options expiring this week is concentrated at strike prices of $450 and $500.

(1) If investors are confident that the voting proposal is highly likely to pass, it would provide significant positive momentum for Tesla’s stock price. A strategy of buying call options can be adopted to bet on upward movement.

(2) If investors find option premiums too high but still wish to maintain a bullish directional stance, they may consider using a Bull Call Spread to capture upside potential.

(3) If betting on event uncertainty from the shareholders’ meeting leading to stock price volatility, and concerned about extreme tail risks, one could consider volatility rebound opportunities by adopting a Long Straddle strategy.

Non-farm payroll 'vanishes,' market attention shifts to ADP.

The non-farm payroll data is typically released on the first Friday of each month, Eastern Time, which would fall on November 7. However, due to the ongoing U.S. government shutdown, if operations have not resumed by then, the non-farm payroll data may once again 'go missing.' In that case, the market may turn its attention to the 'small non-farm' ADP data, which will be released this Wednesday.

Opportunity Analysis

ADP refers to Automatic Data Processing, a well-known human resources company. The ADP data covers approximately 500,000 private companies that use the company’s system for payroll processing, providing insight into the state of U.S. employment. ADP data is usually released two days earlier than the non-farm payroll report and covers a relatively narrower scope, hence it is also referred to as the 'small non-farm' data.

The market expects the ADP employment report to show an increase of about 28,000 jobs in October. A significant deviation from expectations could trigger market volatility. If the ADP figure significantly exceeds forecasts, it would echo the hawkish remarks made by Powell last week (indicating that a December rate cut is not guaranteed); conversely, a notably weaker-than-expected figure could raise concerns about an economic recession. Both scenarios would pose headwinds for the market.

If the deviation from expectations is modest, the market might continue to support the 'Goldilocks' narrative, where the Federal Reserve maintains a preventive rate-cutting path amid signs of no imminent economic recession.

Options Analysis

After experiencing a mild uptick last week, implied volatility in major ETFs remains at relatively low levels. With the upcoming release of employment data, investors may consider implementing some options strategies.

(1) Using Protective Puts to insure existing positions

This strategy is suitable when your position is already heavily weighted, and you are concerned about a potential market pullback but unwilling to sell your current holdings. Highly liquid index ETF options like SPY and QQQ offer expiring contracts every trading day, allowing you to design strategies more flexibly based on macro events.

For instance, prior to the release of the ADP data on Wednesday, you could purchase expiring put options to hedge your existing positions. If the market declines, the profits from these options can effectively offset losses in the underlying assets. Even if the post-data market movement does not meet your expectations, the worst-case scenario would only involve losing the premium paid, without being exposed to ongoing time decay from holding long-term options.

(2) Using a Long Straddle/Strangle to go long on volatility

A lower implied volatility is theoretically advantageous for option buyers. If you believe that the release of employment data may cause market turbulence, consider simultaneously purchasing Calls and Puts, which can generate profits as long as the stock price deviates significantly from the strike price. When market consensus is mixed or expected volatility is high, this type of strategy captures opportunities in both directions, reducing the risk of one-sided bets.