☕️ Palantir – I hope you're ready!
Aug 03, 2026Howdy! 👋
I’ve just returned to the office after a ~1,500 mile run across the American West on one of my favorite motorcycles and I LOVE what I see.
Once again, we’ve got a considerably stronger earnings season than many people expected – present company excluded. We, of course, have been talking about that for quite some time.
As of last Friday, FactSet reports that 61% of S&P 500 companies have reported with 86% of those that have reporting positive EPS surprises and 77% of those reporting positive revenue surprises.
More impressively, the blended YoY earnings rate is 47.4% – the highest since Q2 2021 when the economy came roaring outta Covid.
Buy the best, ignore the rest® is as true today as it was then.
Investors who stay calm and focused – which I repeatedly encourage you to do – tend to end up laughing all the way to the bank especially if they’re focused on worldclass companies making “must have” products and services like those we talk about regularly.
Here’s my playbook.
1 – SpaceX and Palantir, time to buy more?
The venerable Stuart Varney asked me these three important questions this morning ahead of Palantir and SpaceX reports. (Watch)
- Am I buying more Palantir?
- Is Palantir being hurt by AI?
- Should every investor own SpaceX?
Big questions one and all, no doubt! 🎯
Speaking of which...
2 – Palantir reports today, here’s what I’m looking for
Team Karp reports after today’s closing bell. You can watch and listen to the call here. (Read)
Hooyah!
I expect two things: a) for Palantir to crush it and b) a blistering letter and commentary from CEO Alex Karp.
US commercial and government AI demand acceleration is the focus — Street consensus revenue of ~$1.81B implies ~80% YoY growth, with Government at ~$916.2M (+65.7% YoY) and Commercial at ~$892.1M (+98% YoY); company guidance sits at $1.797B-$1.801B.
Full-year guidance currently implies 71% growth so, practically speaking, any raise here is the real headline.
One metric I’ll be watching very closely is the Rule of 40 Score.
If you’re not familiar with what that is, the Rule of 40 Score is a simple “gut-check” for software companies. Add your revenue growth rate to your profit margin, and if that number clears 40, you've got a healthy business.
Palantir's “Rule of 40” Score has been above 100 for three straight quarters, hitting a record 145 last quarter, one of the highest and most consistent I can ever recall. That’s 3.6X the benchmark considered to be great by the technoratti.
Folks are grousing that shares are down 30% YTD as I type, but that’s really sour grapes. PLTR has returned well over 1,000% since it went public back in 2020.
Am I worried about the pullback?
That’s a logical question with a logical answer… no and, as a matter of fact, I wouldn’t be very good at my job if I was.
Critics charge that AI is eating Palantir's lunch and, in doing so yet again, demonstrate their lack of understanding what the company actually does.
Ontology's value is the messy, sector-specific data integration and workflow layer sitting on top of any model, not the model itself. Something we’ve talked about from oh, I dunno, about $7-$10 a share.
Here’s what the naysayers, critics and misguided pundits miss.
Better foundation models make the platform more valuable because, if anything, Palantir is the plumbing that lets those AI models actually run inside government and enterprise data environments and be useful.
The fact that they harp on these things demonstrates either tremendous ignorance or willful naivete. Perhaps both… but that’s a discussion for another time.
Institutional ownership has skyrocketed and now sits at or near all time highs. And that doesn’t happen to sketchy companies where they’re usually running the other way.
Let that sink in.
Trade Idea: Options pricing points to a potential swing of up to ~10% in either direction in the days after the report. Perhaps more as the day goes on. The thing about that is volatility tends to “crush” after earnings so selling options is likely the better play here. Assuming that’s the case, I’m inclined to sell puts into the close, particularly if His Excellency Big Shortimus Maximus – aka Michael Burry – makes the rounds again with his unique brand of “perspective.” 🤦
3 – The Dragon just showed its AI hand, and the market noticed
Alibaba unveiled its most powerful AI model yet on Monday — Qwen3.8-Max, a 2.4 trillion-parameter model that can hold a million tokens of context, basically thousands of pages, in its head at once. Shares jumped as much as 8% on the news. (Read)
Here's the number that should get your attention: Alibaba says this dang thing coded autonomously for 16 straight days on one internal project — building, testing, fixing its own errors, refining the work — with barely any human handholding.
The One Bar Ahead® Family knows what to do, but the question is, do you? If not or you’d like a little perspective that could help, you can find me here.
4 – A $400 billion "why?" merger 🤷
AstraZeneca shares are down nearly 7% as I type this morning on reports it’s in talks to merge with Bristol Myers Squibb — a deal that could value the combined company at roughly $400 billion. (Read)
Bristol Myers shares popped while AstraZeneca's fell on the news.
Many are asking why.
There’s a simple explanation.
The markets think AstraZeneca doesn't need this deal because it’s got a strong pipeline and is already a $264 billion company targeting $80 billion in sales by 2030, up from $58.7 billion last year.
Bristol Myers, on the other hand, is staring down a patent cliff. Its blood thinner Eliquis and cancer drug Opdivo both face generic competition starting next year.
MyPOV: The reason a company with real organic growth pairs up with one running into a patent wall is because AstraZeneca just completed a direct U.S. listing and wants deeper access to the American market, where Bristol Myers already gets 69% of its revenue versus AstraZeneca's 42%. Combining the two means they potentially have the broadest oncology portfolio in the industry… which also potentially means regulators will have a field day with it.
Both are great companies and investors who own ‘em are probably going to do just fine over time if and when the merger receives regulatory blessings.
That said, I don’t like buying companies with baggage and prefer not one but three companies that don't need a $400 billion science experiment to prove they can grow. One's already got the immunology crown and isn't sharing it. One's quietly become the biggest company in the sector without anyone throwing a parade. And one's sitting on a virology and oncology bench most of Big Pharma would kill for.
Hopefully you’ve got this covered in your own investing and – if not – I’d urge you to give it serious thought for a very simple reason.
AI isn’t just about the tech but increasingly how it will be applied in derivative uses… like oncology, immunology and other medical fields.
The investing potential is ginormous, imho.
Keith’s Investing Tip: Many investors settle for mediocre when history shows very clearly that the world’s most successful investors tend to make very focused, opportunity driven decisions by continuously weighing alternatives.
5 – FIZY starts trading tomorrow!
Bottom Line
People ask me about hot stocks frequently.
That's the wrong question.
Ask yourself which stocks will be there when you need 'em and work backwards.
It's a very short list.
Now and as always, let's MAKE it a great day and start the week strong! 💯
You got this — I promise!
Keith 😀
