Palantir’s earnings beat expectations and it raised its full-year guidance, yet its stock plunged after hours.

AI-favored stock Palantir delivered first-quarter results that significantly exceeded expectations, prompting the company to substantially raise its full-year guidance. Despite the strong performance, its high valuation faces downward pressure from profit-taking. On Monday, Palantir reported robust first-quarter results, with both its U.S. government and commercial businesses performing strongly—revenue far surpassing Wall Street expectations: First-quarter revenue totaled $884 million, exceeding analysts’ consensus estimate of $863 million and representing a 39% increase year-on-year from $634.3 million. Adjusted earnings per share (EPS) came in at $0.13—matching market expectations—while net income rose to approximately $214 million ($0.08 per share), up sharply from roughly $105.5 million ($0.04 per share) a year earlier. Operating margin improved markedly to 19.9%, up from 12.8% year-on-year; U.S. government business grew 45% to $373 million; and U.S. commercial revenue surged 71% to $255 million. CEO Alex Karp attributed the government segment’s growth to broader adoption of Palantir’s tools across U.S. federal agencies, noting that demand for large language models and supporting software has “become a craze.” However, given the company’s current elevated valuation—and investors taking profits—the stock faced downward pressure, falling over 8% after hours. The cost of high valuation: Even an earnings beat fails to meet market expectations Since launching its new “Artificial Intelligence Platform” in April 2023, Palantir’s AI commercial division has grown rapidly. Its share price soared from under $10 per share in mid-2023 to nearly $120, valuing the company at close to $300 billion. So far this year, Palantir has been the top-performing constituent of the S&P 500 Index, with its share price rising 64% year-to-date—completely defying the broader tech sector’s decline in 2025.

Morgan Stanley’s ‘Memory Grim Reaper’ Shawn Kim issues another warning! The real bomb is the ‘2028 profitability cliff’—he downgrades memory stocks’ target prices across the board.

He argues that market debate has shifted away from near-term fundamentals toward the so-called “2028 profitability cliff”—a confluence of mounting pressures including new capacity coming online by late 2027, delays in data center construction, and narrowing HBM (High Bandwidth Memory) premium pricing—all casting doubt on the sustainability of the current memory supercycle. Based on this outlook, Shawn Kim has sharply reduced his long-term profitability assumptions for SK Hynix and Samsung, directly lowering the output values of their valuation models. This is not the first time Shawn Kim has sounded the alarm during periods of heightened memory-sector optimism. As reported by WallStreetCN, he published the report “Memory: Winter Is Coming” in August 2021—accurately timing the onset of the subsequent two-year semiconductor downturn. In September 2024, his report highlighting the risk of HBM oversupply was seen as one catalyst behind the sharp stock declines of both Samsung and SK Hynix that year. On July 21 this year, he issued another warning stating that the AI-driven semiconductor memory boom is nearing a turning point, forecasting that memory contract prices would peak in Q4 before triggering another sharp drop in SK Hynix and Samsung Electronics’ share prices. These track records have earned him the nickname “Korea’s Semiconductor Grim Reaper” in Korean markets. This latest report marks yet another cautionary note amid the ongoing de-bubbling of AI-related memory trades. Valuation reset: Significant target-price cuts; Samsung upgraded to top pick Shawn Kim’s revisions are substantial. SK Hynix’s target price was slashed by 38%—from 2.6 million Korean won to 1.6 million won—implying a projected 2027 P/B ratio of approximately 1.8x, offering about 41% upside from its current reference price of 1.132 million won; the stock retains its “Overweight” rating. Samsung Electronics’ common stock target price was cut by 19%—from 381,000 won to 309,000 won—while its preferred stock target price fell from 304,800 won to 247,200 won. Both retain their “Overweight” ratings, and Samsung’s common stock is newly designated as the top pick. The core driver behind these target-price cuts is Shawn Kim’s significant downward revision to his long-term sustainable profitability assumptions for both companies. Previously, he assumed DRAM long-term sustainable profitability would remain around 60% through 2035; now, he lowers SK Hynix’s average DRAM operating margin for 2029–2035 to approximately 32%—close to the historical average of 31% for 2010–2025—and Samsung’s to roughly 39%. Meanwhile, the HBM premium over standard DRAM is now projected to narrow gradually—from 20 percentage points in 2029—to zero by 2033. The report also raises near-term earnings forecasts for both companies for 2026–2028, primarily driven by share count reduction from buyback programs.

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Analysts lowered Braskem SA's average 12-month price target to $2.95, shifting consensus to Hold despite implying significant upside from current prices.

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