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Equities

AI Stocks in Focus: Palantir Up 21%, Nvidia Earnings Awaited

Palantir beats earnings with $634M revenue, NVIDIA's AI chip performance eagerly awaited amid tech sector's mixed market reactions.

By Alex P. Chase

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5/7, 12:54 EDT
Apple Inc.
Amazon.com, Inc.
Meta Platforms, Inc.
NVIDIA Corporation
Palantir Technologies Inc.
SPDR S&P 500 ETF TRUST
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Key Takeaway

  • Palantir beats earnings expectations with $634M revenue, up 21% YOY, but faces stock drop post-earnings due to growth concerns.
  • NVIDIA's upcoming earnings on May 22 are highly anticipated, critical for assessing AI sector momentum.
  • Mixed market reactions to AI earnings highlight the tech sector's challenges and opportunities, with divergent investor sentiment.

AI Earnings Spotlight

Artificial Intelligence (AI) continues to be a significant driver in the technology sector, with companies like Palantir Technologies Inc. and NVIDIA Corp. at the forefront of investors' minds. Palantir reported robust earnings, with revenues of $634M against a consensus of $615M, marking a 21% increase from the previous year. The company's adjusted operating income also surpassed expectations, coming in at $226M versus the $200M consensus. This growth is attributed to Palantir's expansion beyond its government and defense roots into commercial business, where it saw a 27% increase in commercial revenue. However, despite these strong results, Palantir's stock experienced a drop post-earnings, highlighting the market's sensitivity to valuation and growth deceleration concerns.

NVIDIA, known for its dominance in AI computing chips, is another key player, with its earnings highly anticipated on May 22. The company's performance is critical, given its role in powering AI advancements across various sectors. Despite a strong season for AI earnings overall, NVIDIA's stock movement will be closely watched, especially after mixed reactions to earnings from other AI hardware makers.

Market Reactions and Money Flows

Early trading showed positive money flows in Apple Inc., neutral in Amazon.com, Inc., negative in Meta Platforms Inc., and mixed in SPDR S&P 500 ETF Trust. These movements reflect the broader market's response to earnings reports and future expectations. The momo (momentum) crowd's activity, particularly in buying stocks and gold, contrasts with the smart money's inactivity, indicating a divergence in market sentiment and strategy.

Challenges and Opportunities

The technology sector faces both challenges and opportunities, as evidenced by the mixed reactions to AI earnings and the anticipation surrounding NVIDIA's upcoming report. Palantir's earnings beat and optimistic future guidance contrast with its stock's post-earnings drop, underscoring the market's complex dynamics. NVIDIA's position as a key player in AI computing adds another layer of anticipation, with its performance potentially setting the tone for the sector's direction.