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USA Today
9 hours ago
- Business
- USA Today
Palantir's Q2 report is coming. Here's what smart investors need to know before Aug. 4
Palantir is scheduled to report second-quarter earnings in the next week, and expectations are sky high. Palantir Technologies (NASDAQ: PLTR) has been one of the biggest beneficiaries of artificial intelligence (AI) tailwinds. The company's software suites, Gotham and Foundry, serve as the AI backbone for hundreds of global enterprises and government agencies. As of the closing bell on July 25, shares of Palantir have gained 110% so far this year, making it the top-performing stock in the S&P 500 and Nasdaq-100. On Aug. 4, the data mining specialist is scheduled to report financial and operating results for the second calendar quarter of 2025. Let's dig into what investors should be on the lookout for as Palantir's Q2 earnings loom around the corner. Is now a good time to invest in Palantir stock? Read on to find out. What should investors expect from Palantir's Q2 report? During the company's first-quarter report back in May, Palantir's management provided investors with financial guidance for Q2 as well as the full year. Management expects the company to generate $936 million in revenue and $403 million in adjusted income from operations at the midpoint of its Q2 guidance. Should the company achieve these targets, it would represent year-over-year growth of 38% and 59%, respectively. What happened to Palantir stock following the Q1 report? The chart below illustrates Palantir's stock price action over the last three years. I've annotated the chart to include earnings reports, which are depicted by the purple circles labeled with an "E". Data by YCharts. Do you notice anything peculiar from the stock's trajectory above? Since AI burst on the scene in early 2023, Palantir's share price has steadily climbed with each passing quarter report. The major exception, however, occurred earlier this year. Following Palantir's monster Q1 report back in May, shares lost 12%. However, the brief sell-off wasn't driven by an earnings miss or anything management discussing during the investor call. Rather, the meteoric rise in Palantir stock comes with heightened scrutiny around the company's underlying operating metrics. In other words, despite Palantir reporting best-in-class software metrics and explosive growth, expectations from investors are now incredibly high. Another way of looking at this is that Palantir stock has entered territory where "good" simply may not be good enough. Is Palantir stock a buy right now? Despite its sell-off a few months ago, Palantir stock has since rebounded in epic fashion and now trades near an all-time high. Data by YCharts. The chart above plots the price-to-sales valuation of Palantir along with a group of peer companies. Palantir's prolonged valuation expansion has brought its valuation multiple far above any of its peers in the enterprise software arena. To add some context around these figures, Palantir's price-to-sales (P/S) ratio of 127 is meaningfully higher than where valuation multiples peaked for many companies during prior stock market bubbles. While I remain optimistic about Palantir's long-run prospects, the company's valuation is overextended. And with expectations steadily rising, buying the stock with so much momentum behind it and at such a frothy premium does not seem prudent. I wouldn't be surprised to see Palantir stock witness another pullback following the Q2 report, even if the company beats its guidance. Moreover, in the event that Palantir actually misses its targets, the stock could experience enormous downward pressure. To me, the best course of action is to wait until Palantir publishes its second-quarter results before buying the stock. This way, investors can get a clearer picture around revenue growth, operating margins, profitability, as well as any valuable information regarding broader industry trends that Palantir's management may choose to share during the earnings call. Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Cloudflare, CrowdStrike, Datadog, MongoDB, Palantir Technologies, ServiceNow, and Snowflake. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Palantir Technologies right now? Offer from the Motley Fool: Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks »
Business Times
2 days ago
- Business
- Business Times
Are investors overlooking the upside risk in markets?
[SINGAPORE] Equity markets seem to have taken recent tariff headlines in their stride. So far, investors appear to be treating tariffs as a one-off impact, with little evidence that it will evolve into a broader trade war. Remarkably, the 'Trump trade' – higher equities, a softer US dollar and lower yields – seems to be holding. Perhaps it's time to pause before it fades. Investors used to say: 'Don't fight the Federal Reserve.' In today's environment, it might be more apt to say: 'Don't fight President Donald Trump.' This is not to suggest that risks have disappeared – far from it. Recession fears, geopolitical tensions, and higher-for-longer interest rates still dominate the narrative. As investors, we are conditioned to focus on what could go wrong. Prospect theory explains why: We feel the pain of losses much more acutely than the satisfaction of gains. However, markets often work in the opposite way. They climb walls of worry and recover faster – and further – than most expect. After a strong start to 2025, with the Nasdaq-100 index up 9 per cent in the year to date and the S&P 500 not far behind, the debate now turns to whether this rally has legs. What's often overlooked is the potential for upside surprises – factors that could keep markets advancing despite widespread caution. 1. Earnings and growth momentum could surprise: Corporate earnings are the ultimate driver of equity markets. Two weeks into the second-quarter earnings season, early results have been encouraging. A large majority of companies are beating expectations by a healthy margin, well above historical averages. This suggests that analysts may have been too cautious in their forecasts, thus leaving room for the positive earnings momentum to continue. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Although the S&P 500 index earnings growth was estimated to slow to around 5.8 per cent year on year in Q2 at the start of the earnings season (based on LSEG IBES Estimates), this deceleration was well-telegraphed and is likely already in the price. From here, the consensus anticipates a notable acceleration in earnings, with third-quarter earnings growth estimated at 8.4 per cent. Combined with modest US economic growth forecasts that set a low bar for upside surprises, this creates precisely the kind of set-up that markets tend to reward. 2. Liquidity and positioning leave room for risk-taking: Global liquidity continues to expand. Rising money supply is helping to offset the drag from trade tensions and geopolitical shocks, providing a supportive backdrop for risk assets. Investor positioning also points to caution rather than exuberance. Many institutional investors remain underweight on equities, which suggests that there is room for re-risking if confidence improves. Hedge funds, in particular, have scope to re-leverage, with exposures far from extreme. This 'dry powder' could become an additional catalyst should momentum build. 3. Momentum is self-reinforcing: Momentum remains a powerful and often underappreciated force in markets. As momentum builds, it can attract further inflows from investors wary of missing out, creating a self-reinforcing cycle. This behavioural dynamic can extend rallies beyond what fundamentals alone might suggest. Portfolio implications for investors For investors, the key takeaway is to recognise that risks are not only on the downside. There is scope for upside risks as well, such as stronger earnings, improving market breadth, and modest investor positioning. Given this, we would adopt the following strategies: * Staying invested in the growth theme: This remains critical, as missing even a handful of strong days in the market can significantly reduce long-term returns. * Diversifying thoughtfully: While US equities have driven the recent performance, a weak US dollar environment could create opportunities in ex-US equities, particularly Asia ex-Japan, where we are overweight in our global equities allocation. * Balancing discipline with flexibility: Avoid chasing returns indiscriminately, but ensure one's portfolio isn't overly defensive in an environment where the returns on the path of least resistance may be still higher. * Reassessing allocations: For those underweight equities, incremental re-risking may be worth considering, particularly as macroeconomic and earnings momentum improve. The bottom line Markets are designed to recover. Investors, however, are conditioned to doubt them. This persistent scepticism – whether about valuations, leadership concentration, or macroeconomic headwinds – is precisely what allows rallies to extend. While risks to the downside remain, the case for potential upside is also strong and should not be overlooked. The critical question is whether investors are focusing too much on what could go wrong and missing what is quietly going right. The writer is head of asset allocation at Standard Chartered Bank's wealth solutions chief investment office
Miami Herald
3 days ago
- Business
- Miami Herald
Fed decision, jobs report will step out into spotlight
It's rare that folks think about a week of economic reports as potentially dramatic. This week, however, has the potential to be very dramatic. There's just so much data and, yes, politics, about to be loosed on markets, on businesses and around the world. Don't miss the move: Subscribe to TheStreet's free daily newsletter There's the July unemployment report, due Friday. The widely studied and analyzed PCE inflation report inflation report, due Thursday. There's the first round of estimates of second-quarter gross domestic product, the report card on how the economy is faring. Related: It's a lollapalooza week ahead for markets Parallel to the economic data are some 843 earnings reports due this coming week from the likes of Microsoft (MSFT) , Facebook-parent Meta Platforms (META) , Apple (AAPL) and (AMZN) . It all comes in the context of continued negotiations on trade deals with tariff rates coming in at lower rates than President Trump suggested in April. Trump said Sunday the European Union has agreed to a deal that envisions tariffs on European goods at 15%. The United States is still negotiating on tariffs with China, Canada and others. So far, stock investors are happy to get a settlement. Stock index futures were signaling stocks will open higher on Monday. Gains would come after the Standard & Poor's 500, Nasdaq Composite and Nasdaq-100 indexes all hit record highs last week. And, of course, there's the Federal Reserve meeting on Tuesday and Wednesday. Will the central bank cut its key federal funds rate, not at 4.25% to 4.5%? Donald Trump wants a rate cut badly now. Treasury Scott Bessent says he wants it. Howard Lutnick, the Commerce Secretary, says he wants it. Two Fed governors, Christopher Waller and Michelle Bowman, are for it. But the other 10 voting members of the Federal Open Market Committee, including Fed Chairman Jerome Powell, have said they're content to wait, probably until the Fed's Sept. 16-17 meeting. Related: Intel CEO outlines 'hard but necessary decisions'; Trader Guilfoyle: CEO Tan 'Has a Chance' Powell attracts most of President Trump's ire; he's threatened to fire Powell, whose term expires next May. (Whether he legally can fire Powell is not clear.) Powell remains worried the president's big beautiful tax bill and his tariffs will affect inflation. Powell is not opposed to cutting later and, in fact, the futures markets think the Fed will decide to wait until September. A second rate cut will come in October or December. Overnight trading in the 10-year Treasury note shows the yield rising to 4.41% from Friday's 4.392%. Related: Mexican restaurants, chains hit hard by Chapter 11 bankruptcy There are estimates showing jobs growth falling to around 110,00 from 147,000 in June with the unemployment rate holding at 4.1% or so. But this bit of data has become quite volatile and a bit suspect because it's getting harder to obtain reliable data from phone and online surveys. Bloomberg/Getty Images Another indicator should come Thursday when outplacement firm Challenger, Gray & Christmas should release its monthly tally of reported layoffs and job cuts. One more jobs indicator: the weekly report on initial jobless claims, due Thursday. The most recent report showed 217,000 layoffs, down 4,000 from a week earlier. More Tech Stocks: Analyst who correctly predicted Rocket Lab stock surge resets forecastVerizon Q2 earnings report surprises with remarks on tax reformFund manager who forecast Nvidia stock rally reboots outlook The Personal Consumption Expenditures Index measures what is happening to prices for services and products consumers actually buy. It was 2.3% year-over-year in June and may be up slightly in July. Related: Chapter 11 bankruptcy forces popular animal attractions to close Two reports will look at this question: the S&P Case-Shiller report that looks at home prices on Tuesday and the National Association of Realtors Pending Home Sales Index on Wednesday. The Case-Shiller report has suggested home prices are moderating. The pending sales report was up slightly in June but is down around 40% from levels last seen in 2022. Part of the downturn is due to: Higher interest home little construction of homes aimed at first-time home buyers. The Conference Board releases its Consumer Confidence Index report for July at 10 a.m. Tuesday. The University of Michigan releases its Consumer Sentiment Index at 10 a.m. Friday. Both look at how consumers are looking at inflation, the economy and other factors. The June reports showed increasing confidence, a reflection of better conditions in financial markets and the economy. Related: Veteran fund manager points to glaring stock market risk The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Business Insider
4 days ago
- Business
- Business Insider
The Week That Was, The Week Ahead: Macro & Markets, July 27, 2025
Everything to Know about Macro and Markets The S&P 500 (SPX) touched new intraday highs on Friday, ending the week up 1.5%. Major indices finished the week on a strong note, thanks to solid corporate earnings and favorable trade developments. The Nasdaq-100 (NDX) and the Dow Jones Industrial Average (DJIA) ended the week 0.9% and 1.3% higher, respectively. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Weekly Gains on Strong Earnings and Trade Deals The S&P 500 posted its fifth straight day of closing records on Friday. Interestingly, the index ended above the 6,300 level for the first time on Monday. Strong earnings reported by several companies, notably by Google parent Alphabet (GOOGL) and telecom giant Verizon (VZ), fueled last week's rally. According to FactSet, out of the 34% of S&P 500 companies that have reported Q2 results so far, 80% have exceeded earnings expectations, a proportion that is above the 5-year average of 78%. However, the magnitude of earnings surprises is below average levels. Additionally, the trade agreement between the U.S. and Japan eased concerns about the ongoing tariff wars and contributed to last week's rally. U.S. President Donald Trump called it 'perhaps the largest Deal ever made,' while adding that Japan would invest $550 billion in the U.S. The deal lowers the tariffs on auto exports, a major driver of Japan's economy, to 15% from the existing 25% that is imposed across countries. A Big Week Ahead The week ahead is expected to be quite eventful, given that it includes the August tariff deadline, the July Federal Open Market Committee (FOMC) meeting, earnings reports from four of the Magnificent 7 stocks, and some key economic releases. The Federal Reserve's two-day policy meeting will be in focus this week, especially due to President Trump's persistent attacks on the central bank's Chair Jerome Powell. The independence of the Fed is being debated, with reporters expected to question Powell about the same at the post-meeting press conference. Despite growing pressure from Trump to slash interest rates, the Fed is expected to hold the benchmark short-term borrowing rate steady in a target range of 4.25% to 4.50%. Meanwhile, the August 1 deadline to raise tariffs is approaching this week. Trump's erratic trade policy decisions have been making headlines. Following the trade agreement with Japan, all eyes are on the possibility of a deal with the European Union (EU). Aside from Trump's trade stance, earnings from four of the Magnificent 7 stocks – Meta Platforms (META), Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL), are eagerly awaited. Investors will be focusing on the commentary from management of these companies regarding the business backdrop and artificial intelligence (AI) spending. Finally, the Personal Consumption Expenditure (PCE) price index report, scheduled for release on Thursday, and the July nonfarm payrolls report, due on Friday, could impact investor sentiment. Experts expect the jobs report to indicate a deceleration in job additions in July compared to the previous month. Meanwhile, the PCE price index is expected to show a rise in inflation. Stocks That Made the News Alphabet impressed investors with its market-beating second-quarter revenue and earnings. The company raised its capital expenditure guidance for 2025 from $75 billion to $85 billion to support robust demand for its cloud offerings amid the ongoing AI boom. Verizon also delivered upbeat results for the June quarter, thanks to strength in its wireless service business. The company raised the lower end of its full-year earnings guidance to reflect strong demand for its premium plans and the Trump administration's new tax law. IBM (IBM) stock fell even after delivering better-than-expected second-quarter results. The company's software business lagged the Street's revenue expectations. The tech giant also noted that some clients are being cautious in signing new deals due to geopolitical pressures. Tesla (TSLA) reported dismal second-quarter results, with the electric vehicle (EV) maker's CEO Elon Musk cautioning investors about a 'few rough quarters' ahead due to the expiration of the federal tax credits. TSLA stock is down 22% year-to-date, as investors are concerned about weak demand due to macro pressures and rising competition, a lack of innovation, and Musk's political ambitions. Intel (INTC) reported mixed results for the second quarter. The chip giant exceeded the consensus revenue expectations, but the bottom line fell short of estimates. Further, CEO Lip-Bu Tan announced significant cuts in chip factory construction. The company is streamlining its operations and cutting costs in an attempt to revive its business. Kohl's (KSS) made headlines this week as it became the latest stock to join the meme stock frenzy. Retail investors are buying stocks of companies like Kohl's and online residential real estate platform Opendoor Technologies (OPEN), which generally have high short seller interest, to trigger rapid rallies. UnitedHealth (UNH) stock declined after the health insurer disclosed in an SEC filing that it 'proactively' reached out to the U.S. Department of Justice (DOJ) after reports of investigations into certain aspects of the company's participation in the Medicare program surfaced. The company added that it has started complying with formal criminal and civil requests from the DOJ. Data analytics company Palantir Technologies (PLTR) stock continued to rally this week, thanks to AI tailwinds. PLTR stock is now one of the 20 most valuable companies in the U.S. Paramount (PARA) secured the Federal Communications Commission's (FCC) approval for the $8 billion merger with Skydance Media. The Q2 2025 earnings season is in full swing, with many prominent U.S. companies' earnings scheduled for this week. Spotlight will be on the earnings reports of PayPal (PYPL), Visa (V), Boeing (BA), SoFi Technologies (SOFI), UnitedHealth (UNH), Microsoft (MSFT), Meta Platforms (META), Alibaba (BABA), Ford (F), Apple (AAPL), Amazon (AMZN), Exxon Mobil (XOM), and Chevron (CVX).
Yahoo
5 days ago
- Business
- Yahoo
4 No-Brainer Artificial Intelligence (AI) Stocks to Buy Right Now
Key Points Chipmakers like Nvidia and Taiwan Semiconductor are reporting soaring revenue. Alphabet is tying generative AI technology into its already successful Google Search and Android OS businesses. Amazon is improving order fulfillment with mobile robots and developing AI tools for its customers, sellers, and advertisers. 10 stocks we like better than Nvidia › Artificial intelligence (AI) stocks have been delivering incredible gains to investors. And with so many companies using AI technology, there's no shortage of investment opportunities. While businesses involving new technology can be volatile, you don't need to take on outsized risk to get AI exposure. The four companies below are all highly successful and should be long-term winners. 1. Nvidia Nvidia (NASDAQ: NVDA) is the largest AI chipmaker and the largest company in the world, with a market cap of $4.2 trillion as of July 18. While Nvidia is on the expensive side -- it trades at more than 55 times earnings -- it has also delivered double-digit revenue growth for nine consecutive quarters. Considering the popularity of Nvidia's graphics processing units (GPUs), a crucial part of generative AI infrastructure, that trend should continue. AI hyperscalers are investing heavily in data centers. They spent $430 billion on data centers in 2024, and that's expected to rise to $1.1 trillion by 2029. Nvidia had a 92% share of the data center GPU market in Q1. In addition to holding a dominant position in a rapidly growing market, Nvidia is a well-run company with a fantastic company culture, ranking fourth on Glassdoor's list of the best places to work in 2025. Even with a high valuation, this is an excellent business that plays a key role in AI development. 2. Taiwan Semiconductor Manufacturing Taiwan Semiconductor Manufacturing (NYSE: TSM), often shortened to TSMC, is another company that's essential to chipmaking. Other companies design chips, but TSMC handles the manufacturing. Most of the major semiconductor companies are clients of TSMC, including Nvidia, Advanced Micro Devices, Apple, and Qualcomm. Rising demand for AI chips has driven substantial revenue growth for TSMC. In Q1 2025, TSMC reported $25.5 billion in net revenue, up 35% year over year. It also grew its profit margin, with earnings per share (EPS) increasing 54% to $2.12. For a fast-growing tech company, TSMC isn't prohibitively expensive. It trades at less than 28 times earnings at the time of this writing, far cheaper than the Nasdaq-100 index. 3. Alphabet Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) had a strong start to the year, as revenue grew 12% year over year to $90.2 billion in Q1 2025. Operating margin increased from 32% to 34%, and EPS increased 49% to $2.81. You wouldn't know it from Alphabet's share price, which is down 2% on the year. The prevailing sentiment around this tech giant is concern regarding its online search business. Google Search accounted for 56% of its revenue last quarter ($50.7 billion). The growing popularity of ChatGPT and other generative AI chatbots will likely impact that business. If people can get their questions answered by a chatbot, they won't need to search the web as much. But Alphabet is leveraging AI to improve its products and services. Google Search results now feature AI Overviews, which have 1.5 billion users per month. Google Gemini, while far behind ChatGPT, is the third-largest AI chatbot with a 13.5% market share. I'd expect that number to grow significantly, given that Gemini is now the default AI assistant on devices running Android 10 or later. Android has a 74% share of the mobile operating system market as of June 2025. Trading at less than 21 times earnings, Alphabet is cheaper than the S&P 500 index. This is a great opportunity to buy one of the top tech companies without paying a premium. 4. Amazon Amazon (NASDAQ: AMZN) is best known for its online retail dominance, and it has incorporated AI to streamline its operations. For a recent example, it's the largest manufacturer of mobile robotics and hit a major milestone last month when it deployed its one-millionth robot. The company also introduced a new generative AI model, DeepFleet, which improves the travel time of its robotic fleet through its fulfillment network by 10%. CEO Andy Jassy said last month that Amazon has more than 1,000 generative AI services and applications in progress or built. This includes tools for customers, sellers, and advertisers who use Amazon and Amazon Web Services (AWS). Looking at the most recent numbers, Amazon grew net sales by 9% year over year to $155.7 billion in Q1 2025. Growth in EPS was particularly impressive, jumping 62% to $1.59. Even with shares trading at about 37 times earnings, Amazon is a quality AI stock to have in your portfolio. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,799!* Now, it's worth noting Stock Advisor's total average return is 1,037% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lyle Daly has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. 4 No-Brainer Artificial Intelligence (AI) Stocks to Buy Right Now was originally published by The Motley Fool 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
