PLTU's 64% weekly surge masks a 35% 12-month loss

PLTU, Direxion's 2X Palantir fund, surged 63.76% in a week yet lost 34.56% over 12 months while PLTR gained 1.24%.

"The results are otherworldly," Alex Karp, chief executive at Palantir, said of the Q2 report that sent the stock up 31.68% in a week.

Palantir's Q2 2026 report, filed Aug. 3, showed adjusted EPS of $0.41 versus the $0.28 consensus and revenue of $1.94 billion, up 92.83% year over year. U.S. commercial revenue grew 149%. From July 28 to Aug. 4, PLTR climbed from $123.53 to $162.66, while PLTU jumped from $27.37 to $44.82.

The gap between a flat underlying and a bleeding leveraged product is the story. A $10,000 stake in PLTR a year ago would be worth about $10,124; the same amount in PLTU would be worth about $6,544, as daily resets grind capital away whenever the stock chops sideways.

The Decay Trap

Over the past year, Palantir stock returned 1.24%, moving from $160.66 on Aug. 4, 2025, to $162.66 on Aug. 4, 2026. A naive reader would expect a 2X fund to be up roughly 2.5%. Instead, PLTU lost 34.56%, sliding from $68.49 to $44.82.

The mechanism is volatility decay. Because leveraged ETFs reset exposure every day, a stock that swings hard and finishes near where it started still generates real losses in the fund. Palantir did exactly that: it hit $187.75 in December 2025, bottomed at $133.02 in February 2026, then chopped its way back. Year to date, PLTR is down 8.49% and PLTU is down 38.09%.

Direxion's own prospectus warns that "the Fund will lose money if [the underlying's] performance is flat, and it is possible that the Fund will lose money even if [the underlying's] performance increases over a period longer than a single day." The last 12 months of PLTU are that warning in chart form.

Why Traders Still Want It

The bull case for PLTU lives in the day, not the year. Palantir carries a beta of 1.56 and a forward implied P/E of 133, meaning any earnings surprise or AI-adjacent headline moves the stock in double-digit chunks. Wall Street is broadly onside, with 19 buy ratings against one sell and one strong sell, and a consensus 12-month target of $182.20. For a trader who thinks the next event hits in a straight line, 2X exposure without margin is the appeal.

Assets have swelled to $486.9 million as of the fund's latest NPORT filing dated April 30, with direct PLTR shares making up 20.97% of net assets and the remainder achieved through cash collateral and swap positions.

Palantir's Q3 2026 revenue guide of $2.160 billion to $2.164 billion sets the next event, with adjusted operating income guided to $1.292 billion to $1.296 billion. If PLTR keeps trending, PLTU keeps compounding upward. If the stock chops between its 52-week range of $106.37 to $207.52, the decay math resumes its quiet work. The fund is doing exactly what it was designed to do; the question is whether the people buying it know which version of the trade they are in.

This article is for informational purposes only and does not constitute investment advice.