• "Forget consensus...to my knowledge, no businesses at our scale has even grown half this much": CEO Alex Karp struck an upbeat tone when discussing the importance of the results. This isn't a modest beat, but a step-change in scale, with net income roughly tripling and the company crossing $1 billion in quarterly profit for the first time. A beat this size, on top of a company that's already priced for hypergrowth, shows investors demand is still outrunning even lofty expectations.
• Karp says strong growth "looks like this is going to go on for at least another 18 months": The revenue guidance increase reflects about an 82% year-over-year growth. A guidance raise this large is enough to impress investors now, but the focus will quickly shift to whether Palantir can keep raising guidance at this pace or whether increases start shrinking. A shrinking "raise" (even alongside continued beats) is often an early sign that a hypergrowth story is normalizing.

3. Alphabet Burns Cash Now, But Vows AI Payoff Later

Alphabet (GOOG +1.39%)'s DeepMind executive Jasjeet Sekhon said the industry's heavy AI-related capital spending is a precursor to the next stage of AI, known as recursive self-improvement (RSI). This is where AI systems help create increasingly capable successor systems, rather than each new model generation being manually trained by humans.

• Helping to justify Q2's increased capex spend and full-year forecast: Sekhon acknowledged that revenues from AI do not yet sustain the level of AI-related capex being made, and instead chose to frame Alphabet's latest quarter spending as a wager on a future payoff rather than something justified by current returns.
• "I certainly don't love it, but I've also been at this game long enough to know to wait before acting": Fool analyst Tim Beyers isn't a fan of the sharp increased free cash flow burn rate at Alphabet. However, with his long-term investment hat on, Tim says "in this case, what I'm waiting for is a mechanism to help me understand how to measure Alphabet's progress toward achieving the capex payoff we all want to believe is coming." Investors should track whether management's own commentary keeps hedging capex with speculative future payoffs like RSI versus grounding it in near-term, measurable returns.

• Sterling Infrastructure (STRL -0.10%) fell over 4% before the opening bell despite results beating expectations. $250.8 million of the $1.17 billion revenue came from recent acquisitions, meaning acquired revenue accounted for a meaningful share of the 90% headline growth rate rather than organic demand. This provides a distinction between the numbers versus the narrative behind them, and will be assessed going forward to see where the company's growth is actually coming from. The stock is outperforming the S&P 500 by 90% since the April 2025 Stock Advisor rec by Team Hidden Gems.
• Grab (GRAB -0.85%) rallied around 4% in pre-market trading as quarterly revenue jumped 21.7%, driven by Monthly Transacting Users hitting a record 54 million. However, the 571% net income headline jump for the Team Rule Breakers rec mostly came from a one-time accounting gain from a corporate transaction. It's not evidence that Grab's core ride-hailing-and-delivery business suddenly got 5x more profitable.
• Wix.com (WIX +0.48%) also rose around 4% before the market opened after it reported Q2 revenue of $563 million, up 15% year over year (YoY), and bookings of $569 million, up 12% YoY, driven by strong Base44 performance. After launching a proprietary LLM, CFO Lio Semesh said it "marks a turning point in lowering our AI inference and compute costs." This matters as it should act to boost profit margins in coming quarters for the Team Hidden Gems recommendation currently in the Stock Advisor Penalty Box.

• Spotify (SPOT +0.24%) fell around 2% before the market opened. After a disappointing last quarter where ad-supported revenue fell by 5%, the latest results showed a slight miss versus guidance for Monthly Active Users (MAUs). However, revenue grew by 14%, but the ongoing concerns over slowing subscription growth in streaming weighed on the stock. This is important as users ultimately drive engagement and activity for the Team Rule Breakers and Team Hidden Gems rec.
• Booking Holdings (BKNG +0.35%) releases results after the closing bell. Recommended in Stock Advisor by both Team Rule Breakers and Team Hidden Gems, this quarter is expected to show a slower pace of growth due to the conflict in the Middle East. Guidance on how long it expects lower room and gross bookings from this area will be key for the stock reaction.
• Upstart (UPST +5.44%) reports earnings once the market closes. After beating revenue expectations last quarter, analysts forecast a 37.9% jump in YoY revenue. Beside the headline figures, core personal loan conversion rates will be watched for the Team Rule Breakers and Team Hidden Gems rec, after management said last quarter they were "unseasonably strong and stable."
• Toast (TOST +3.37%) earnings are due following the closing bell, as it aims to build on the momentum from last quarter. The core test tonight is how Toast's growth engine – net new locations plus payment volume per location – is performing, and how management expects it to track for the Foundational Stock in Rule Breakers through to year end.

6. Today's Take: Tech Company or Tech Consumer?

At times many tech companies can look "overvalued" for whatever reason and it's not always justified. But sometimes it is justified because the market is looking forward at the potential for companies that aren't just growing but also scaling. Companies with strong intellectual property or tech prowess, network effects and even optionality can oftentimes produce a competitive position that is difficult to encroach. Even if the company isn't profitable to that point, the growth it's witnessing based on factors like these can indicate scaling is inevitable which means strong operating leverage and expanding margins, hence the market's enthusiasm via robust valuation multiples.-- Jason Moser Team Rule Breakers

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