☕️ Is Palantir freaking you out? Let’s get honest

Howdy! 👋 

And we’re off again. 

Today all three indices are in the green as I type but traders aren’t exactly piling on the gas. 

Gains are muted… “just” 40 points on the S&P 500 and under 200 on the Nasdaq. 

Remember when those numbers were a big deal? 

I do… but that was back when dinosaurs roamed the earth and I was a young punk in this business. 🤦‍ 

Back in 1987, a 500-point drop in the Dow was a full-blown catastrophe — front page everywhere, congressional hearings, the works. Today that's a slow Tuesday before lunch. 

In the early '90s, a 40-point move on the S&P was a headline. Traders actually called each other on the phone to talk about it. The Dow crossing 3,000 for the first time in 1991 felt like the moon landing. Now we shed 200 points before the coffee gets cold and nobody blinks. 

Stay focused! 

Chaos creates opportunity and the more of the former there is (or could be), the more of the latter you have. 

While you’re at it, get your buy list ready for the simple reason that if US President Donald Trump makes good on his threat to “hit Iran hard” tonight then we could see some interesting gyrations by morning. 

A quick word, though. 

Stuff like this sounds scary – and it often can be if you’re not used to thinking in these terms – but you want to work very hard to make fear the other person’s problem. 

I know it’s not easy but history is abundantly clear as to why you want to do your best to keep your emotions outta the equation. 

Here’s my playbook.  

1 – Palantir’s Karp: "Probably Right" doesn't cut it in the real world 

 Palantir CEO Alex Karp doesn't mince his words.  

He sat down with CNBC's Sara Eisen yesterday and said something we’ve been thinking for a while. (Watch) 

The frontier AI labs — meaning OpenAI, Anthropic, etc. — don't actually understand how businesses work. 

I agree - and have for a long time. 

The keyboard crew is obsessed with processing as many AI tokens as possible and calling that "productivity." But customers with real businesses don't care about token counts.  

They care about one thing and one thing only. 

Results. 

Meaning whether a specific technology or use case actually solves their specific business problem reliably, repeatedly and efficiently. 

My experience matches up. 

I hear regularly from scores of executives making billions of dollars of decisions daily… when companies go directly to the frontier labs, more often than not, they come away frustrated.  

Sure, the labs are brilliant at building models, but they are “downright terrible and very close to being a total waste of money” – and I quote a C-level exec who shall remain nameless - at understanding what a hospital, a manufacturer, or a defense contractor actually needs done. 

Palantir gets it because it takes probabilistic technology — meaning raw AI models designed to be right "51% of the time" — and wraps it in the governance, precision, and reliability that mission-critical operations demand because there are life and death consequences. 

Karp's point is that you can't run a factory, a supply chain, or a military operation on "probably right."  

Again, I agree. 

I’ve walked a mile in those boots… you need "definitely right" and that's a completely different engineering problem. 

Now, let's talk about the price action. 

I’d be lying if I said I wasn’t a little ‘nerked that prices have come off like they have, but I’ve also been doing this long enough that I know it comes with the territory. 

Yes, Palantir stock has fallen ~31% in the past 6 months. But don’t kid yourself, this is the same stock that went from ~$16.58 to a high of ~ $207.18 in less than two years, a 1,149% move. 

Other stocks have moved a whole lot more on a whole lot less. 

31% is chump change in the scheme of things. 

Keith’s Investing Tip: Short term fear always makes long term opportunity cheaper. 

2 – Oracle – doh! 

The Trump administration awarded Oracle a $395.8 million, 10-year contract to build a single cloud-based HR platform for the entire U.S. federal government.  

That means Oracle is essentially becoming the HR backbone for roughly 2 million federal employees which could be a great idea if there’s a great outcome… but we will see. 

Then came EPS at $2.11 on revenue of $19.18 billion — ahead of the $1.97 EPS and $19.09 billion analysts expected. (Read) 

Cloud infrastructure grew 93%.  

The contract backlog — what Oracle calls Remaining Performance Obligations — grew $85 billion in a single quarter to a record $638 billion.  

So why did the stock fall? 

It’s quite simple, really… “concern” over the high costs and financing needs of its aggressive AI infrastructure buildout. 

Like we haven’t heard that one before. 🤦‍♂️ 

This is the same playbook we've seen with every major AI infrastructure build so far. Spend aggressively, get punished short-term, dominate long-term. Excoriated by the media. 

The question in my mind isn't whether Oracle's business is strong — it clearly is. The question is whether you're buying the business or chasing a momentum trade. 

I know which one I want. 

The $40B financing plan that Oracle announced looks scary — until you realize customers have already pre-committed $75B in contracts that Oracle doesn't yet have the infrastructure to fulfill. 

Keith’s Investing Tip: World class companies get beaten down more often than you'd think for reasons that have nothing to do whatsoever with the business case for owning 'em. So take a moment to understand what’s happening rather than trading your thesis for momentum. Odds are that your portfolio will thank you. 

3 – Can’t is portfolio poison, so get it outta your vocabulary 

I’ve always believed that anyone can be wildly successful in the financial markets when armed with the right knowledge, education and perspective. 

And how do you get that? 

By asking questions. 

Btw, a huge tip o’the hat to Yogi for putting this clip together from the great conversation we had last year. (Watch) 

Keith's Investing Tip: Mistakes are tuition and the market doesn't grade on a curve — but it does reward everyone who stays in the classroom long enough. 

4 – Your next Mercedes, drone interceptor optional 

Mercedes can't sell enough cars. 

Sales are down. The EV pivot is a mess. The stock has gone nowhere for three years while Toyota and the Chinese ate their lunch. So naturally, the next move is to mount interceptor drones on a Sprinter van. 🤦‍♂️ 

Management has apparently decided that shooting down drones could be the bee’s knees.  

The Stuttgart automaker just signed an MOU with Munich startup Tytan Technologies to mount interceptor drones on G-Class SUVs and Sprinter vans. (Read) 

Management is calling defense "a strategic growth field” but my take is that it’s more like a distress flare dressed up as a strategy. 

Still, Renault is doing it. VW is doing it. Every European automaker that can't figure out transportation is apparently pivoting to warfare, which is a story for another time. 

The underlying problem is real though.  

One drone over Munich airport last October grounded dozens of flights and stranded thousands of passengers. Pipelines, power grids, data centers — all just as vulnerable. The counter-drone market is large and getting larger fast.  

Mercedes just isn't who I'd bet on to win it. 

Keith's Investing Tip:  The companies that have been in this game for years — real products, real contracts, real revenue — are almost always the better bet than whoever just discovered the party. 

My choice is down about 8% so far, but perhaps not for long if my analysis is correct. 🤷 

5 – Iran just said it’s going to target Musk’s companies in the Middle East 

Iranian state media announced this morning that Tehran will treat all of Elon Musk's regional operations — including SpaceX's Starlink ground stations and xAI's data center partnerships — as military targets as it retaliates against the U.S. (Read) 

That puts the regime or what’s left of it on a collision course with – oh, I dunno - the entire Middle East, the US, Saudi Arabia, the UAE and dang near every sovereign wealth fund that’s betting on Gulf AI infrastructure. 

The biggest question isn’t whether Iran can damage all that because it probably will but whether or not the nearly $200B IT buildout gets delayed, redirected or even accelerated based on the threat.  

What you want to understand as an investor is the same perspective that was drilled into my head years ago. 

The smart money isn’t running away, but watching carefully. 

They always do. 

Which is why I suggest you take a page from their playbook. 

Keith's Investing Tip: Nathan Rothschild said it best back in 1810: buy on the sound of cannons, sell on the sound of trumpets. It's played out that way more times than I can count — in every war, every crisis, every moment of maximum fear I've seen in 45+ years of investing. The investors who acted tended to do very well but those who didn’t often missed out on some ‘uuuuge profit potential.  

Bottom Line 

The media, the Internet and social networks are all over the place at the moment. So are the clickbait artists, pundits and pontificators. 

Keeping a clear head is more important than ever. 

Remember… 

Profit potential is directly correlated to the ability to change your mind when presented with accurate information that contradicts your perception and your beliefs. 

Now and as always, let's MAKE it a great day! 

You got this — I promise! 

Keith 😀