📈 Palantir's AI Bet Pays Off

Trump wants US Sovereign Wealth Fund, Nvidia falls further, Alphabet face scrutiny on AI spend, L'Oreal to sell $3B share of Sanofi, Palantir shares surge 22%

Good morning.

⚡ The Fast Five → Trump wants US Sovereign Wealth Fund, Nvidia falls further, Alphabet face scrutiny on AI spend, L'Oreal to sell $3B share of Sanofi, Palantir shares surge 22%

🔎 Market Trends → Wall Street closes down, pares losses after Trump delays Mexico tariffs; US Futures Rise as Trump Delays Tariffs

And now…

⏱️ Your 5-minute briefing for Tuesday, February 4, 2025:

MARKET BRIEF
Before the Open

As of market close 02/03/2025.

Pre-Market

  • IDEXX Laboratories shares jumped 11%, the best performer on the S&P 500 and the Nasdaq

  • Tesla's shares decreased 5.2%, the second-biggest drop on the Nasdaq and among the worst on the S&P 500.

Fear & Greed

 

Markets in Review

Stocks Slide, but Tariff Pause Softens the Blow

The Nasdaq fell 1.2% to 19,392, while the S&P 500 dropped 0.8% to 5,994.6. The Dow slipped 0.3% to 44,421.9, recovering from deeper losses after President Trump delayed new tariffs on Mexico. Technology took the biggest hit, while consumer staples led gains.

The Big Picture:

Investors were rattled after the Trump administration announced a 25% tariff on imports from Canada and Mexico and a 10% levy on Chinese goods. But a one-month pause on Mexico tariffs gave markets a reason to trim losses. Canada also secured a 30-day delay, according to Prime Minister Justin Trudeau.

Meanwhile, the US manufacturing sector bounced back, with data from both ISM and S&P Global (SPGI) showing the first expansion in two years. That helped ease fears of an economic slowdown.

The 10-year Treasury yield held steady at 4.57%, while the two-year rate climbed 2.7 basis points to 4.27%. West Texas Intermediate crude edged up 0.3% to $72.74 a barrel.

Market Movers:

  • Apple (AAPL) dropped 3.4%, the worst performer on the Dow, as tariff concerns loomed over its China supply chain.

  • Tesla (TSLA) slid 5.2%, the second-biggest Nasdaq loser, as trade tensions hit risk appetite.

  • IDEXX Laboratories (IDXX) soared 11%, the top performer on the S&P 500, after crushing fourth-quarter estimates.

  • Tyson Foods (TSN) gained 2.2%, raising its full-year revenue outlook on strong demand.

What They’re Saying:

"Business confidence about prospects for the year ahead has leaped to the highest level in nearly three years," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

WHAT WE’RE WATCHING
Events

  • Today: Bureau of Labor Statistics - JOLTS Job Openings - 10:00am

  • Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

Earnings Reports

  • Today: Alphabet Inc., Toyota, PepsiCo, Spotify, Ferrari, PayPal, Chipotle, Mondelez, Merck, AMD, Pfizer

  • Tomorrow: Novo Nordisk, The Walt Disney Company, Alibaba Group, Aflac, MetLife, O'Reilly Auto Parts, Uber, QUALCOMM

MARKET BRIEF
Leading News

Palantir's AI Bet Pays Off Big: Q4 Earnings Crush Expectations

Why it matters:

While tech bulls chase flashy consumer AI plays, Palantir's (PLTR) enterprise-focused strategy is quietly revolutionizing how governments and businesses harness artificial intelligence – and the market is finally catching on.

Zoom Out:

After two decades of methodically building its moat in data analytics, Palantir has emerged as a dark horse in the AI race. The company's Q4 results – revenue surging 36% to $828M and profits beating estimates by 27% – validate CEO Alex Karp's long-term vision of AI as a transformative force in enterprise computing.

What's particularly telling isn't just the headline numbers, but the composition of growth: U.S. commercial revenue jumped 64% year-over-year, suggesting Palantir's government-honed AI capabilities are finding fertile ground in the private sector.

Key Insights:

  • While consumer AI grabs headlines, Palantir's $3.74B revenue forecast for 2025 suggests the real money in artificial intelligence lies in enterprise applications

  • The company's 45% growth in U.S. government revenue indicates increasing strategic importance as geopolitical tensions rise

  • Management's projection of 54% growth in commercial sales hints at a flywheel effect as AI adoption accelerates

Market Pulse:

"We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades," notes Karp, with the measured confidence of someone who's been preparing for this moment since 2003.

Bull’s Take:

While PLTR's 340% surge in 2024 might give value investors pause, the company's expanding margins and accelerating growth suggest this could be just the beginning of a multi-year transformation story. For investors seeking exposure to enterprise AI adoption, Palantir offers a compelling mix of established government relationships and expanding commercial opportunities. Smart money is betting that the real AI revolution won't happen in chatbots, but in the enterprise software that powers mission-critical operations. Palantir just showed us why.

Headlines

  • Temu parent PDD’s stock tumbles as Trump tariffs close trade loophole (link)

  • Alphabet faces scrutiny on AI spending as Google cloud growth slows (link)

  • Tesla shares drop 5% on Trump tariffs, decline in vehicle registrations in Europe (link)

  • L’Oreal to Sell $3.1 Billion Stake in Sanofi Back to Pharma Group (link)

  • Trump Orders Creation of Sovereign Wealth Fund (link)

  • Nvidia Falls Further Below Key Level On Trump Tariffs (link)

CRYPTO
Fear & Greed

 

Headlines

  • Bitcoin Bounces Above $100K, XRP Surges 40% as Trade War Tensions Suddenly Ease (link)

  • Real-World Asset Tokens Lead Crypto Rebound as Tokenization Narrative Gathers Steam (link)

  • What's next for the crypto market after the Trump tariff-fueled price plunge? (link)

DAILY SHARE
On the Socials

*Hat-tip to RampCapitalLLC

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