Closing Bell: AI High-Flyers Stumble; PLTR Picked Apart, AMD Up Next

Key Points

• Stocks moved lower, led by declines in the technology sector, as investors reassessed elevated AI valuations and absorbed fresh caution from big-bank CEOs regarding a potential 10–15% market pullback.
• Palantir (PLTR) fell approximately 9% despite delivering a beat-and-raise quarter; management’s strong Q4 outlook wasn’t enough to counter profit-taking after a substantial year-to-date rally.
• AMD (AMD) reports after the close, with traders closely watching data center and AI GPU cadence, as well as sensitivity around forward guidance following today’s sector volatility.

Market Recap

Major averages slid through the session, with the Nasdaq leading declines and banks’ warnings about stretched valuations weighing on risk appetite. Tech, Communication Services, and parts of Consumer Discretionary lagged; defensives were mixed. The move came as investors positioned for this evening’s chip earnings and sifted through a handful of messy single-stock reactions across healthcare and travel.

Palantir (PLTR): what drove the reaction

Palantir topped expectations and raised its outlook, but shares still declined as investors questioned the sustainability of the recent AI-driven surge and trimmed exposure heading into year-end. Total revenue grew 63% year-over-year, with U.S. revenue up 77% as adoption of the Artificial Intelligence Platform (AIP) accelerated. U.S. commercial revenue surged 121% year-over-year (up 29% quarter-over-quarter), driven by larger deal sizes—deals over $5 million increased fivefold—and a 199% year-over-year rise in remaining commercial deal value. On the profitability front, Palantir reported a GAAP operating margin of 33% and adjusted operating income of $601 million, reflecting a 51% margin and strong operating leverage as AIP scales. While coverage highlighted a solid pipeline and robust U.S. commercial momentum, valuation concerns dominated market reaction—typical of an environment increasingly quick to fade “good” prints among crowded AI winners.

AMD in Focus

Focus remains squarely on data center momentum, specifically AI GPU shipments and supply cadence, as well as the forward guidance. With semiconductors leading today’s sell-off, even a minor miss or a cautious outlook could reverberate across the broader AI complex. Conversely, a clean acceleration could help stabilize the group.

Notable Earnings

Pre-market tomorrow: MCD, EMR, FIS, HUM, JCI.

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