Once the short squeeze fades, the share price has to be supported by fundamentals rather than forced buying.
For Palantir, the key questions are:
Can 90%+ revenue growth remain elevated, especially in commercial AI?
Can operating margins and free cash flow continue expanding?
Can management justify its premium valuation through sustained execution?
If growth remains exceptional, investors may be willing to support today's valuation. If growth normalises while expectations stay sky high, multiple compression could outweigh earnings gains.
Snap's rally is more fragile. Improving losses and revenue are encouraging, but it still needs to demonstrate durable profitability and stronger advertising growth.
Ultimately, short covering accelerates a rally, but it does not create lasting value. Once that buying pressure disappears, the next move depends on whether long-term institutional investors continue accumulating because earnings keep exceeding expectations. In this market, earnings are replacing narratives as the main driver of share prices.
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