ETFs Built Around Palantir, the “Mystical Orb” of Data
Palantir Technologies (PLTR), now emerging as one of the most heavily purchased overseas stocks among Korean retail investors, combines two powerful investment themes: defense and AI software. The company’s name, Palantir, is derived from the mystical crystal ball in The Lord of the Rings used to see distant events. Founded in the aftermath of the September 11 attacks, Palantir was built on the idea—championed by Peter Thiel and the other co-founders—that terrorism could have been prevented if data had been analyzed and used more effectively.
In 2024, Palantir posted a staggering 340.5% gain, the highest among all S&P 500 constituents. The rally has continued into 2025, with the stock up 63% year-to-date, fueling speculation that it could become the next market leader in place of Nvidia. Valuation metrics are undeniably demanding, with a price-to-earnings ratio hovering around 550 times, but the absence of close comparables works in Palantir’s favor. By the Rule of 40—a benchmark often applied to high-growth software companies, which requires the sum of revenue growth and operating margin to exceed 40%—Palantir posted 83% last quarter, more than double the threshold.
At the core of Palantir’s offerings is its flagship service, Ontology, which enables fragmented data—text, numbers, and images—to be immediately applied to decision-making by combining human insight with AI-driven reasoning. Ontology underpins two main platforms: Gotham, supplied to government agencies, and Foundry, designed for private-sector clients. Gotham gained global recognition through its use in the hunt for Osama bin Laden and in the Ukraine–Russia war. More recently, Palantir’s AIP (Artificial Intelligence Platform) has emerged as a new growth engine, helping clients deploy AI more efficiently within their existing infrastructure.
More than 50% of Palantir’s customers are U.S. government agencies tied to national security, including the Department of Defense, the CIA, and the FBI—hence its frequent classification as a defense stock. Yet the company’s growth profile is shifting. In the first quarter of 2025, commercial revenue grew 71%, surpassing the 45% growth recorded in government-related revenue, signaling a broadening demand base.
In Korea, there are currently four ETFs that include Palantir in their product names. Listed on the 13th, RISE Palantir Fixed Tech 100 (0047R0) is an equity ETF allocating 25% to Palantir and 75% to a portfolio of U.S. technology stocks. Launched on February 11, KIWOOM Palantir U.S. 30-Year Treasury Mixed Active (H) is a currency-hedged active ETF that invests up to 25% in Palantir and 70% in U.S. Treasuries with maturities of 20 years or longer, making it a bond–equity balanced product.
There are also ETFs that employ covered call strategies. Listed on the 22nd of last month, SOL Palantir Covered Call OTM Bond Balaced (0040Y0) and SOL Palantir U.S. Treasury Covered Call Balanced (0040X0) focus on generating monthly distributions through call option sales.
More specifically, SOL Palantir Covered Call OTM Bond Balanced invests up to 30% in Palantir shares while selling weekly out-of-the-money (OTM) call options at a 103% strike on Palantir. The remaining 70% of net assets is allocated to short-term domestic bonds. This strategy allows participation in weekly Palantir gains of up to 3% while targeting a monthly distribution of around 1.5%.
SOL Palantir U.S. Treasury Covered Call Balanced also invests up to 30% in Palantir, with the remaining 70% allocated to a portfolio of U.S. Treasuries with maturities beyond 20 years. It partially sells at-the-money (ATM) call options on U.S. Treasury ETFs. This structure allows full participation in Palantir’s upside while targeting monthly distributions of roughly 1%.
Palantir-focused ETFs now come in various forms—pure equity, bond balanceds, and covered call strategies. Yet they share a common goal: encouraging long-term investment through diversification, asset allocation with bonds, and steady monthly income from option premiums. Whether Palantir can truly become a second Nvidia remains to be seen. If it does, the rewards are likely to accrue to investors who consistently track quarterly earnings and possess the patience required for long-term investing.