Bloomberg Daybreak Weekend: Fed, Tech Earnings Preview
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Yahoo
18 minutes ago
- Yahoo
Palantir is set to report second quarter earnings after announcing $10 billion US Army deal
Palantir (PLTR) was set to report quarterly earnings Monday after the bell, with Wall Street expecting another period of double-digit growth for the defense tech firm. Wall Street analysts tracked by Bloomberg expect the company to report second quarter adjusted earnings per share of $0.14, up from $0.09 the prior year. They expect revenue to hit $939.25 billion, up roughly 39% from last year, according to Bloomberg data. 'Expectations for Palantir headed into earnings are as high as ever,' DA Davidson analyst Gil Luria told Yahoo Finance in an email. 'The company has easily exceeded expectations for several recent quarters and appears to have more momentum than any other publicly traded software company.' Read more: Live coverage of corporate earnings Palantir sells its artificial intelligence software to businesses and governments in the US and abroad. Its tech does everything from supply chain analysis to surveillance and identifying military targets, the latter of which has drawn backlash from human rights advocates. In May, Palantir stock fell 12% the day after its first quarter results as investors scrutinized the company's valuation and declining sales in its international commercial business, which sells software to businesses abroad, even as its first quarter revenue blew past Wall Street's forecasts. While analysts expect revenue from sales to governments and US businesses to continue soaring in the second quarter, they see sales in its international commercial segment declining slightly to about $147.1 billion from $148 billion last year. Boosting optimism for the future of its revenue from the US government, Palantir announced Thursday that it had inked a deal with the US Army worth up to $10 billion over the next 10 years. Wedbush analyst Dan Ives, a notable Palantir bull, said the deal is 'one of the largest ever DOD [Department of Defense] software contracts in US history.' 'We believe this deal represents an additional tailwind for PLTR with AI initiatives across the US government accelerating with AI a strategic focus on the federal front and Palantir in the sweet spot to benefit from a tidal wave of federal spending on AI,' Ives wrote in a note to investors Friday. Overall, Wall Street remains mixed on Palantir stock, however. Ives is one of 10 analysts who hold a Buy rating on shares, while 16 have a Hold rating, and five recommend selling the stock, according to Bloomberg data. Bears remain concerned that Palantir is overvalued. Palantir stock currently trades at levels 24 times the historical market multiple of the S&P 500 (^GSPC). Shares of Palantir are up more than 105% this year, relative to the S&P 500's 6.3% gain, and the stock has far outperformed the "Magnificent Seven" Big Tech stocks in 2025. 'We cannot rationalize why Palantir is the most expensive name in our software coverage,' RBC Capital Markets analyst Rishi Jaluria wrote in a note to clients Wednesday. 'Absent a substantial beat-and-raise quarter elevating the NT [near term] growth trajectory, valuation seems unsustainable.' A 'beat and raise' refers to a company's earnings surpassing Wall Street's expectations and raising its financial outlook for the upcoming Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at
Yahoo
18 minutes ago
- Yahoo
S&P 500 Companies' Earnings Growth Largely Steady as Revenue Expansion Accelerates, Oppenheimer Says
S&P 500 companies' latest quarterly results showed the pace of earnings growth holding largely stead
Yahoo
18 minutes ago
- Yahoo
Trump set to announce replacement for Fed Gov Kugler this week. The Fed chair in waiting?
President Trump said he plans to name a replacement this week for Federal Reserve governor Adriana Kugler, whose unexpected resignation set for this Friday offers the president an opportunity to put in place a successor for Fed Chair Jerome Powell. 'I have a couple of people in mind,' President Trump told reporters Sunday night. 'I'll be announcing that probably over the next couple of days.' Kugler's term as a governor was set to expire on Jan. 31. She has served as a Fed governor since Sept. 13, 2023, and will return to Georgetown University as a professor this fall. Kevin Warsh, a former Fed governor, and Kevin Hassett, the current chair of the President's Council of Economic Advisors, are thought to be at the top of the list for the next Fed chair and thus possible nominees to replace Kugler. Treasury Secretary Scott Bessent, who is leading the search for Powell's replacement and is also a potential contender, has already sketched out a scenario where the White House appoints someone to fill Kugler's seat who can then be in the running to succeed Powell next May. The White House also hopes that Powell decides to leave the Fed Board of Governors when his chairmanship is up, which would open up a second seat that Trump can fill. Powell has not yet said whether he intends to do that; his term as a Fed governor is not up until 2028. Read more: How much control does the president have over the Fed and interest rates? Warsh already has a lot of experience navigating the central bank. He served as Fed governor from 2006 until 2011 and became former Fed Chair Ben Bernanke's liaison to Wall Street during the chaos of the 2008 financial crisis. He is also a known figure to Trump, who interviewed him for the Fed chair post eight years ago before deciding on Powell. Trump appointed Powell to be Fed chair in 2018 at the direction of then-Treasury Secretary Steven Mnuchin. Former President Joe Biden reappointed Powell in 2022. Warsh has been critical of the Fed as of late. He has suggested that the Fed could look through increases in inflation from tariffs because it would be a one-time increase in prices. He's also argued that the costs involved in renovating the Fed's headquarters represent one of several examples of how the Fed "has lost its way" and that the American people "need a reformer to fix" the institution and rebuild its credibility. "Frankly, it's about breaking some heads," he said on Fox Business last month, calling for "regime change." Back in April, Warsh gave a speech in Washington, D.C., in which he said that the Fed's "current wounds are largely self-inflicted" and called for a "strategic reset" to ease a loss of credibility and damage to the Fed's standing. Hassett, meanwhile, already has a close relationship with Trump, given that he advises the president on economic policy and also served in the first Trump administration. Read more: How jobs, inflation, and the Fed are all related Earlier in the year, Hassett said he was more focused on the 10-year Treasury yield (^TNX) than on any quick monetary policy changes at the Federal Reserve. While the Fed can influence short-term bond yields and long-term bond yields, longer-term bond yields are influenced by many factors outside the Fed, and it is the yield on the 10-year Treasury that influences mortgage rates. But lately, Hassett has been more blatant, saying there's no reason why the Fed shouldn't be cutting rates now, something the president has repeatedly hammered the central bank to do. The president will likely watch whoever he appoints to the open Fed governor position to see how they perform and whether they'd be a successor for Powell, whose term ends next May. Though Fed governors Chris Waller and Michelle Bowman are also jockeying for the position of Fed chair, in part by dissenting at last week's Fed policy meeting in favor of cutting rates by 25 basis points, rather than holding rates steady. The opportunity for the White House to fill Kugler's seat earlier than expected comes as Trump applies pressure on Powell and the Fed board to lower rates by as many as 3 percentage points. Whoever the president appoints, it is the Federal Open Market Committee, which is composed of 19 members, that makes the decision, not just the Fed chair, and the new chair will have to contend with the committee. Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
