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SUMMARY
Amit Kukreja provides a comprehensive analysis of the latest earnings reports from Palantir, Grab, and other major tech and financial companies, highlighting the market's rotation into AI infrastructure and memory stocks. The episode covers the divergent reactions to strong earnings, sector flows, macroeconomic data, and the evolving narratives around software, hardware, and geopolitical risk.
MAIN POINTS
- Palantir posts exceptional earnings, with US revenue up 104% and overall topline growth at 85% year-over-year.
- Bank of America and Rosenblatt raise Palantir price targets, citing sustainable growth and strong financial guidance.
- Grab beats on all major metrics, with 24% revenue growth and strong profit despite macro headwinds in Southeast Asia.
- Michael Burry sells GameStop and expresses a bearish stance on Palantir, shorting its business model and CEO.
- Google raises $9 billion in a euro bond sale as global bond yields, including the UK 30-year, reach multi-decade highs.
- PayPal and Shopify both beat on earnings but see their stock prices fall sharply, reflecting market skepticism toward software names.
- Micron and SanDisk surge as Micron announces the world's first 245TB data center SSD, fueling the memory stock rally.
- Amazon launches same-day grocery delivery for business customers, increasing its market share in logistics and delivery.
- Iran acquires Morantis to strengthen its cloud infrastructure capabilities, following a trend of software-focused acquisitions in the sector.
- Duolingo drops on weak bookings growth guidance, while Pinterest rebounds with strong earnings after a period of negative sentiment.
- ServiceNow outlines ambitious revenue and growth targets for 2030, aiming for a rule of 60 and continued operating leverage.
- Zeta CEO praises Palantir's execution and growth, highlighting the competitive landscape among fast-growing software companies.
- The market opens with Palantir down over 2%, Robinhood and Fastly up, and Amazon hitting all-time highs.
- Memory and AI supply chain stocks continue to outperform, with Micron, SanDisk, and DRAM ETFs leading the gains.
- Discussion on FOMO and discipline in investing, emphasizing the risks of chasing high-flying stocks without a clear thesis.
- Market participants debate trading versus investing strategies, particularly in volatile sectors like memory and semiconductors.
- Fastly and DigitalOcean rally on strong sector earnings, with cloud infrastructure names receiving increased attention.
- Shopify's president defends the company's growth and AI strategy amid a sharp stock decline, arguing against market pessimism.
- JOLTS and new home sales data beat expectations, supporting a resilient macroeconomic backdrop despite sector rotations.
- Micron's low forward P/E sparks debate about the durability of the AI-driven memory cycle and its valuation compared to historical norms.
- Rare earths and critical metals highlighted as the next potential AI supply chain play, following government investments.
- Grab's strong earnings are acknowledged, but the stock fails to rally as market attention remains on AI infrastructure and memory.
- Analyst Brent Thill reiterates concerns about Palantir's valuation despite strong fundamentals, citing historical software multiple compression.
- Geopolitical updates on Iran and the Strait of Hormuz, with limited market impact as oil prices decline and risk appetite persists.
- Liquidity continues to flow into semiconductors, raising questions about future demand for upcoming IPOs like SpaceX.
- Robinhood's focus on prediction markets is discussed, with regulatory and strategic implications for its earnings and future growth.
- Nvidia faces rotation as investors debate the impact of inference versus training workloads, while Intel and AMD gain on supply chain news.
- Market concentration reaches historic highs, echoing previous bubbles, but bulls argue current earnings growth and valuations are more justified.
- Howard Marks argues that AI's transformative potential makes it difficult to label the current investment cycle as a bubble, urging caution and awareness.
DETAILED ANALYSIS
The trading session opened with strong anticipation around earnings from several high-profile technology and financial companies, notably Palantir and Grab. Palantir delivered one of its most impressive quarters to date, with US revenue surging 104% and overall topline growth of 85% year-over-year, far surpassing consensus estimates. The company reported a GAAP net income margin of 53%, and management raised fiscal year 2026 guidance, projecting continued rapid growth.
This performance led major analysts such as Bank of America and Rosenblatt to raise their price targets, citing Palantir’s sustainable growth and robust financial outlook. Despite these results, Palantir’s stock experienced selling pressure at the open, reflecting broader market skepticism toward software valuations and a rotation of capital into hardware and infrastructure plays.
Grab, the Southeast Asian super app, also exceeded expectations, posting 24% revenue growth and a significant increase in profit, even as the company faced macroeconomic headwinds like rising fuel prices and regulatory changes in Indonesia. The company’s ability to beat on all major metrics, including adjusted EBITDA and user growth, was seen as a testament to its operational resilience and long-term potential. However, similar to Palantir, Grab’s stock failed to sustain pre-market gains, highlighting a market environment where strong earnings alone are insufficient to drive price appreciation unless accompanied by a compelling narrative or sector momentum.
The episode also covered the actions of prominent investors, with Michael Burry selling his GameStop position and expressing a bearish stance on Palantir, not only criticizing its valuation but also its business model and leadership. This personal dimension to Burry’s investment thesis was contrasted with his long positions in companies like PayPal, Salesforce, and Adobe, which have not matched the growth trajectories of the leading AI and memory names.
Macro developments included Google’s $9 billion euro bond sale and rising global bond yields, with the UK 30-year government bond yield reaching its highest level since 1998. These moves raised questions about the sustainability of equity market highs in the face of tightening financial conditions. Despite these concerns, the market remained focused on earnings growth as the primary counterbalance to higher yields.
PayPal and Shopify both reported double beats on earnings and revenue, yet their stocks fell sharply. This reaction underscored the market’s current skepticism toward software companies, particularly those trading at elevated multiples without the hypergrowth seen in AI infrastructure. DigitalOcean and Fastly, by contrast, rallied strongly on positive sector earnings, reflecting the market’s preference for cloud infrastructure and AI-adjacent plays.
Micron and SanDisk were among the session’s standout performers, with Micron announcing the world’s first 245TB data center SSD, targeting AI, cloud, and hyperscale workloads. The announcement fueled a surge in memory stocks, which have become central to the AI investment thesis. The memory sector’s rally was further supported by analyst commentary and the perception that the current AI-driven demand cycle may be more durable than previous boom-bust periods.
The debate over Micron’s low forward P/E centered on whether the current cycle truly represents a structural shift or if historical cyclicality will reassert itself.
Amazon expanded its logistics footprint by launching same-day grocery delivery for business customers, further consolidating its market share and contributing to the decline of traditional logistics providers like UPS and FedEx. The company’s continued innovation in delivery and logistics was illustrated by its rapid market share gains since 2015.
The episode also highlighted sector-specific news, such as Iran’s acquisition of Morantis to bolster its cloud infrastructure, following a broader trend of software-focused acquisitions among data center and AI infrastructure players. This move was compared to similar strategies by other firms seeking to integrate software and hardware capabilities.
Other notable earnings included Duolingo, which fell on weak bookings growth guidance despite beating on other metrics, and Pinterest, which rebounded after a period of negative sentiment. ServiceNow outlined ambitious targets for 2030, aiming for a rule of 60 and continued operating leverage, while Zeta’s CEO praised Palantir’s execution and growth as a benchmark for the industry.
The market open saw a pronounced divergence, with Palantir and other software names under pressure while memory, photonics, and AI supply chain stocks surged. The discussion turned to investor psychology, particularly the risks of FOMO (fear of missing out) and the importance of discipline in chasing high-flying stocks. The host emphasized the need for a clear investment thesis and the dangers of buying into parabolic moves without understanding the underlying drivers.
Trading versus investing strategies were debated, especially in the context of volatile sectors like memory and semiconductors. The episode noted that while stop-losses can be useful for traders, long-term investors must be prepared for volatility and avoid being shaken out by short-term declines.
Macro data releases, including JOLTS and new home sales, beat expectations, reinforcing the narrative of a resilient US economy. However, the market’s attention remained fixed on sector rotations, with capital flowing out of software and fintech into AI infrastructure and memory. The discussion also touched on rare earths and critical metals as the next potential supply chain play, following significant government investments.
Despite strong earnings, companies like Grab and Shopify struggled to attract investor interest, as the market’s focus remained on AI infrastructure and memory. Analyst Brent Thill reiterated concerns about Palantir’s valuation, drawing parallels to historical software multiple compression and cautioning against overpaying for growth.
Geopolitical developments, including tensions in the Strait of Hormuz and ongoing conflict in the Middle East, had limited impact on markets, as oil prices declined and risk appetite persisted. The episode also addressed the implications of liquidity concentration in semiconductors, raising questions about future demand for upcoming IPOs like SpaceX.
Robinhood’s strategic pivot toward prediction markets was discussed, with regulatory and long-term growth implications. The host noted that while prediction markets have boosted Robinhood’s earnings, the sector remains politically sensitive and subject to regulatory risk.
Nvidia faced rotation as investors debated the impact of inference versus training workloads, while Intel and AMD gained on supply chain news and potential new contracts with major customers like Apple. The episode also explored the historical context of market concentration, noting that current levels rival previous bubbles but are arguably more justified by earnings growth and more reasonable valuations among the largest companies.
Howard Marks concluded the session by arguing that the transformative potential of AI makes it difficult to label the current investment cycle as a bubble. He urged investors to remain cognizant of risks and to focus on awareness and discipline, as the long-term impact of AI remains highly uncertain. The episode closed with a reminder that not all bull markets are broad-based, and that investors must carefully consider their positioning in a rapidly evolving landscape.
LINKS
- Amit Kukreja's Twitter/X profile for market commentary and updates.
- Amit's Deep Dives Substack for in-depth stock analysis and research.
- Amit Kukreja's new website for news and media content.
- Chicago meetup event link for Amit Kukreja's community.
- Amit Kukreja's Instagram for personal and market updates.