Breakfast News: PLTR Victim Of Own Success

Breakfast News: PLTR Victim Of Own Success

Source: Image Created by Jester AI.

1. Palantir Struggles to Impress

Palantir Technologies (PLTR 7.69%) fell by as much as 9% after the market closed despite posting Q1 revenue ahead of forecasts and raising full-year guidance. With a sky-high valuation and a price-to-earnings ratio above 500, the lofty expectations caused the stock to fall rather than any particularly worrying revelations.

• "We believe our results are indicative of a revolution sweeping across our business and industry": CEO Alex Karp pointed to AI, stating demand for large language models (LLMs) and software from the defense sector has "turned into a stampede."
• Government sector sales jumped 45% to $373 million: With the U.S. Government representing around 42% of revenue for the quarter, investors might be concerned future cost-cutting measures from the public sector could see Palantir negatively impacted.

2. Notable After Hour Earnings

Ford (F 1.57%) dropped a little over 2% after the closing bell as it suspended full-year financial guidance, flagging a potential $2.5 billion hit from the tariff uncertainty. It expects U.S. industry sales to fall by 500,000 units to 15.5 million for the year ahead.

• Beating the S&P 500 by 12% since Nov 2022 Rule Breakers recommendation: Vertex Pharmaceuticals (VRTX -1.14%) fell almost 3% in after-hours trading following results that missed both revenue and earnings consensus. Spiralling costs, with a 16% jump in overhead expenses, weighed on the bottom line.
• Current yield of 5.65%: Dividend Investor rec Realty Income (O 0.48%) announced plans to deploy around $4 billion in investment this year, as Q1 results showed a diversified global portfolio with a negligible impact from tariff challenges.

3. India's Zero-Zero Trade Idea

India has proposed zero tariffs with the U.S. on key sectors including steel and auto components, based on a reciprocal agreement, in a bid to iron out differences before the end of the 90-day levy pause.

• India exported pharmaceuticals worth $10.5 billion and engineering goods worth $19.1 billion to the U.S. last year: The reported arrangement would see the zero tariffs available up to a certain quantity of imports, beyond which normal duties would still be applied.
• Global shipping hub feels tariff squeeze: The impact of the U.S./China trade war is being felt via Hong Kong's freight forwarding industry. 41% of container capacity from the city to the U.S. west coast has been canceled for this coming week, in a notable slowdown.

4. What to Watch on Tuesday

Stock Advisor rec DigitalOcean (DOCN 1.58%) is set to report before the market opens, aiming to carry momentum forward from the strong Q4 results. Watch for further product innovation announcements relating to AI and machine learning.

• A Superscore of 75 on TMF's Moneyball database: Advanced Micro Devices (AMD -1.96%) will release earnings after the market closes, with the impact of U.S. export restrictions being closely monitored, as well as indications on how resilient the supply chain is.
• Beating earnings forecasts for the past four quarters: Arista Networks (ANET 0.17%) is due to report quarterly earnings after hours. Announcements of new or expanded deals with major cloud providers, along with updates on AI-related trial conversions, could help to get investors excited.

5. Foolish Fun

In March, Lemonade (LMND 4.21%) – reporting before the opening bell – announced that it had passed $1 billion in premiums in 8.5 years since selling its very first policy.

What compound annual growth rate (CAGR) percentage would you realistically hope to see over the next five years for the stock to beat the S&P 500: Current rate year over year (~26%); Slower, but attainable (20%-25%); Accelerating from here (~27%-37%); or Supercharged (38% or more)? Discuss with friends and family, or become a member to hear what your fellow Fools are saying!