🚀 Palantir shares fall 8%

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Market Overview
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Year To Date Performances:

1. Palantir shares tumbled 8% Tuesday despite reporting strong third-quarter earnings and raising full-year guidance, as analysts flagged ongoing concerns over its lofty valuation. The drop followed news that “Big Short” investor Michael Burry had taken a short position in the company, prompting CEO Alex Karp to accuse short sellers of “market manipulation” during a heated CNBC interview. While Palantir’s revenue exceeded $1 billion for the second consecutive quarter, its forward P/E ratio of 254, far higher than Nvidia’s 35, sparked debate about sustainability amid growing fears of an AI market bubble. Analysts cautioned that despite Palantir’s solid execution, its growth remains heavily reliant on U.S. enterprise demand and early AI transformation spending.

2. AMD reported stronger-than-expected third-quarter earnings and revenue but issued margin guidance that fell short of Wall Street estimates, sending its shares down nearly 5% in after-hours trading. The chipmaker posted adjusted earnings of $1.20 per share on $9.25 billion in revenue, up 36% year-over-year, and projected $9.6 billion in fourth-quarter sales—above forecasts—with a 54.5% gross margin. Despite the muted outlook, AMD’s AI ambitions remain a key focus: it recently struck a deal allowing OpenAI to take a 10% stake and deploy six gigawatts of AMD’s Instinct GPUs, while Oracle plans to use 50,000 of its AI chips next year. CEO Lisa Su said the AI business could generate tens of billions in annual revenue by 2027, even as Amazon disclosed it had sold its entire stake in AMD.

3. Asian tech stocks tumbled as investors grew nervous over soaring AI valuations, with Japan’s SoftBank plunging 13% and chip-related firms like Advantest, Renesas, and Tokyo Electron sliding more than 5%. South Korea’s Samsung and SK Hynix each fell nearly 6%, while TSMC, Alibaba, and Tencent also declined. The selloff followed an 8% drop in Palantir despite strong earnings, reflecting fears that the AI boom has pushed markets into bubble territory—FactSet data shows the S&P 500’s forward P/E now above 23, its highest since 2000. Analysts compared today’s euphoria to the dot-com era, with Michael Burry’s short bets against Nvidia and Palantir underscoring rising skepticism that AI stock prices have outpaced profit potential.

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