Palantir Crushes Earnings, Apple in Talks with Intel

Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Tuesday, May 5th. In today's episode, I'm breaking down Palantir's blowout earnings and why investors are questioning the company's valuation. I'll also tell you why Apple is in talks with Intel and Samsung to make its chips. Then stick around to the end of the show to find out why Michael Burry just dumped his entire GameStop state. We got a great show for you today. Let's go. Stocks pulled back a bit on Monday after Iran reminded everyone that the war is still happening. The S&P 500 dropped 0.4%, the Nasdaq fell by 0.2%, and the Dow dropped by over 1%, but nobody cares about the Dow. So, you know, for the last few weeks, the market has mostly treated the Iran war like background noise. I think investors were convinced that a diplomatic solution would be the likely outcome. But yesterday, we got the biggest flare up since the ceasefire started nearly a month ago. Now, the good news is that the ceasefire is still technically holding as of this morning, and oil prices are cooling off a bit after Monday's spike. The bad news, though, is that oil is still 50% higher than it was before the war started, and that continues to hang over the market. Also, the 10-year treasury yield hit 4.45% yesterday, which is the highest level since July. So the bond market is starting to get nervous too. But despite all of that, though, the stock market isn't really freaking out. The market continues to be resilient. Also, I want to talk about Bitcoin real quick because we're starting to see some signs of life again. The price of Bitcoin is back above $80,000 for the first time since early July. Prices have gone up 17% over the past month. Now, Bitcoin would need to rally another 50% from here to get back to all-time highs. So there's still a long way to go, but at least there's some momentum now. So I'm going to keep my eye on Bitcoin again, along with the situation in the Middle East, plus all the earnings that we're getting this week. So definitely get subscribed to the podcast and tune in every day to stay in the loop. Let's run through some headlines, starting with Palantir. Palantir reported earnings last night, and the numbers were incredible across the board revenues were up 85% year over year to $1.6 billion. That's the fastest growth rate Palantir has had since they went public in 2020 net income quadrupled to $876 million. Their margins are over 50%. I mean, this company beat on literally every key metric and not just that Palantir also raised its full year revenue outlook to billion which is up from the billion they guided just a few months ago Government contracts continue to be a big part of Palantir's business. Government revenue jumped 84% to $687 million. They also recently locked in a billion dollar deal with Homeland Security and a $300 million deal with the Department of Agriculture. It seems like the war in Iran has also been good for Palantir's business, their Maven system, which is a battlefield command platform, has seen usage quadruple in the past year. But beyond just government contracts, the commercial side of their business is also crushing it. The U.S. commercial revenue came in at $595 million, which was up 133% from last year. But you know, despite everything that I just said, Palantir's stock has barely moved following the earnings report. In fact, their stock is down around 1% at the time of this recording. And if you zoom out, the stock has declined around 13% so far this year. The thing is, Palantir trades at 97 times earnings, which is a pretty rich valuation. So the bar for Palantir is very high. So even when the company is growing at their fastest pace ever, it's not good enough for investors. All that growth seems to be priced in already. And the other overhang for the stock is the broader fear on Wall Street that AI is going to disrupt the software industry. Companies like Anthropic and OpenAI could eventually offer cheaper alternatives to what Palantir does. Now, CEO Alex Karp pushed back on that narrative. His argument is that Palantir won't be replaced because their infrastructure is what connects the AI models to a company's actual data and decision-making systems. Big picture question for investors though, is if Palantir can keep growing fast enough and long enough to justify their valuation. Again, the fact that their stock barely moved after blowout earnings kind of makes you question what the upside is. To be fair though, the stock has gone up 7x in the past two years, so long-term holders are doing just fine. Let's shift gears and talk about Apple. Bloomberg is reporting that Apple is in early talks with Intel and Samsung about making chips for the iPhone and Mac here in the US. See, for the last decade plus, Apple has relied on TSMC to manufacture their Apple Silicon chips. TSMC makes virtually all the processors that go into your iPhone, your Mac, your iPad. I mean, they're the best in the world at it. But the reason that Apple is looking for an alternative is for two reasons. For one, TSMC can't make enough chips for Apple. There's so much manufacturing demand for AI chips right now from NVIDIA and AMD and others who all rely on TSMC to make their chips that there is a shortage of chips right now Tim Cook talked about this on the in the earnings call last week say that it could take several months to reach a supply balance So that one reason that Apple is looking for a backup manufacturer The other reason though is the Taiwan risk See, TSMC's main factories are in Taiwan, and if China ever decides to make a move on Taiwan that shuts down manufacturing, Apple's entire supply chain could get disrupted overnight. So, you know, Apple is doing the smart thing by trying to diversify their supply chain and not be so reliant on just one company. Now, we'll have to see if Intel and Samsung can manufacture at the level that TSMC does. Intel has been trying to reinvent themselves as a chip manufacturer under their new CEO, Lip Bhutan, who took over last year. And winning Apple's business would be the ultimate validation. There's also a political angle here because working with Intel could help Apple's relationship with the Trump administration. Because remember, the administration invested in Intel last year and views them as a key piece to bring back advanced chip manufacturing in the US. But I should stress here that talks are still in the very early stages. Apple hasn't placed any orders yet. In fact, Apple is apparently concerned about whether Intel or Samsung can match TSMC's quality. But investors seem to be pretty hyped about a possible partnership. Intel stock is up around 10% this morning at the time of this recording. By the way, the Trump administration invested in Intel at around $20 a share back in August. And now the stock is trading at over $100 a share. Let's talk about some stocks. making moves today. Pinterest shares are surging this morning after the company delivered a better than expected earnings report, beating on both top line and bottom line. Sales jumped 18% to just over $1 billion. The company also lifted its Q2 revenue guidance. Here's the thing about Pinterest. Prior to this period, Pinterest had missed earnings for five straight quarters, but that losing streak has finally come to an end. You know, a few months ago, Pinterest said that Trump's tariffs were hurting its advertising business. So the fact that they posted a beat and raise guidance tells you advertisers are still spending on the platform despite macro headwinds like tariffs and the Iran war and competitive pressures from major digital platforms like Meta, Google, and Amazon. Pinterest stock is up around 14% this morning at the time of this recording. Now on the flip side, shares of Duolingo are tanking despite the company beating on revenue and earnings. Revenues came in at $292 million ahead of estimates and daily active users grew 21% to 56.5 million. On paper, that looks fine. But the language learning app spooked investors by projecting a sharp slowdown in bookings growth as it prioritizes user retention over near monetization Duolingo is forecasting just a 10 bookings growth for 2026 That down from a 33 growth they had in 2025 See, Duolingo is deliberately pulling back on monetization tricks like pushing ads and subscription upsells, and instead focusing on making the product better and growing the user base long-term. But based on the reaction from the stock, investors aren't willing to wait this one out. Shares of Duolingo are down around 8% at the time of this recording, and the stock has dropped 80% over the past year. Last up, I have to mention GameStop here. Shares dropped 10% yesterday and they're down again this morning after Michael Burry dumped his entire stake in the company after GameStop made a $56 billion bid to buy eBay despite GameStop only being worth $12 billion themselves. See, Michael Burry invested in GameStop back in January because he thought that CEO Ryan Cohn would turn GameStop into a Berkshire Hathaway type company. But now he's out on the stock saying that the level of debt required to pull off this eBay deal completely breaks his thesis. Either way, eBay responded on Monday saying that it would review the offer. So we'll see what ends up happening. Let's wrap the show with a fun fact. The Devil Wears Prada 2 absolutely crushed it at the box office this past weekend. The movie pulled in $77 million domestically and $234 million globally in just three days. The sequel has already made 72% of what the original movie made during its entire theatrical run back in 2006. And look, this is why Hollywood continues to reboot existing IP and lean on sequels. These sequels absolutely print money. I think we're going to see Hollywood continue to milk millennial nostalgia. And by the way, this movie became like a huge event, especially for women. My wife went to go see it with a bunch of her friends at the theaters, and she said that it was packed with moviegoers all dressed up like they were attending the Met Gala or something. Now, as for the movie itself, my wife said that it wasn't as good as the first one, which I kind of expected. I mean, the first movie is a masterpiece, so it's kind of hard to top that. But I bet you they're going to make a Devil Wears Prada 3 after seeing how much money the second one made. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five-star rating on Apple, Spotify, YouTube, wherever you listen to your podcasts. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching, and commenting. Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow.