The first week of February 2025 opened an intense stretch of AI-focused earnings, and two names moved first: Palantir and Advanced Micro Devices (AMD). Reporting within 24 hours of each other, and just days after the DeepSeek selloff had rattled technology stocks, the pair drew sharply different reactions. Together they set the tone for how markets would judge the next leg of the AI-driven tech rally.
Palantir's Blowout Quarter and Bullish 2025 Outlook
Palantir reported fourth-quarter 2024 revenue of $828 million, up 36% year over year and well above the $776 million analysts expected, after the close on February 3. Growth was led by the United States, where commercial revenue jumped 64% to $214 million and government revenue rose 45% to $343 million. Management guided 2025 revenue to $3.74 to $3.76 billion, above consensus estimates. Shares hit a record intraday price of $106.91 the next day before settling to close about 24% higher near $104, pushing the market value as high as $240 billion, above American Express, McDonald's and Disney. Government contracts accounted for roughly 55% of Palantir's total 2024 revenue, underscoring how central its defense and public-sector business remained even as commercial demand accelerated.
AMD's Record Revenue, Undercut by a Data Center Miss
AMD followed after the close on February 4 with record quarterly revenue of $7.66 billion, up 24%. Data center revenue also set a record at $3.86 billion, up 69% year over year, yet it fell short of the roughly $4.14 billion analysts had penciled in. Management guided first-quarter revenue to about $7.1 billion, ahead of the $7 billion consensus, but flagged that data center sales could dip on a sequential basis, a signal that unsettled investors already primed for disappointment. The stock dropped close to 9% in after-hours trading, sliding toward the $109 level. For the full 2024 year, AMD still posted record revenue of $25.8 billion, with data center sales nearly doubling from the prior year.
Market Reaction and the AI Trade
The reports landed roughly a week after Chinese startup DeepSeek unveiled a low-cost AI model, a shock that erased close to $600 billion from Nvidia and pushed the Nasdaq down more than 3% in a single session. That backdrop made these earnings a test of the AI trade. Palantir's guidance reassured investors betting on surging demand for AI software, while AMD's data center shortfall revived concerns that AI hardware growth could disappoint against very high expectations. The divergence, one stock up sharply and the other down, suggested the rally was maturing and starting to separate clear winners from the rest.
What It Means for Index and Tech Traders
For anyone trading technology indices such as the Nasdaq 100 or individual shares, earnings weeks concentrate volatility into narrow windows. Large single-name moves, Palantir near 24% higher and AMD close to 9% lower, can ripple into index futures and sector benchmarks. The episode also showed that forward guidance, not just headline beats, tends to drive the reaction, and that after-hours gaps can open well away from the prior close. With several megacap technology names still due to report, commentary on AI capital spending remained the variable most likely to steer the next moves across the sector.
Daily market analysis by BCM Markets.