Wall Street's AI Jitters Return: Palantir Slides Despite Beating Estimates as Tech Stocks Wobble
Palantir topped Wall Street's third-quarter forecasts and raised its outlook — and its stock still tumbled nearly 8% as investors, already spooked by a broader AI selloff, head into a midterm election that could reshape Washington's tech and trade agenda.
NEW YORK — Wall Street's uneasy relationship with artificial-intelligence stocks resurfaced Tuesday as Palantir Technologies tumbled despite beating Wall Street's third-quarter estimates and raising its full-year revenue outlook, dragging sentiment lower across the tech sector on Election Day.
Palantir shares fell roughly 7.8% in premarket trading even after the data-analytics firm topped consensus forecasts, as investors weighed valuation concerns against a broader pullback in AI-linked names. Apple shares slid about 3.7% after the iPhone maker beat fourth-quarter estimates on strong device sales but missed on revenue from China, a market that has grown increasingly important to its bottom line.
A mixed bag elsewhere
Not every chipmaker was caught in the downdraft: AMD shares rose roughly 2.6% on the back of its own earnings report, and Aehr Test Systems jumped about 13% after its first-quarter results beat expectations. Dow futures were down around 286 points, or 0.55%, while Nasdaq futures were modestly higher, a split that traders attributed to rotation out of the most richly valued AI names rather than a broad market retreat.
A SELECTIVE, NOT A BROAD, PULLBACK
German bond yields were reported near August lows as the tech selloff rippled into European markets, underscoring how closely global investors are now tracking the fortunes of a handful of U.S. AI-adjacent companies.
Context: a familiar pattern
Tuesday's reaction continues a theme that has defined markets for much of the fall: strong headline earnings numbers from AI-exposed companies have repeatedly failed to translate into stock gains, as investors grow more skeptical of lofty valuations built on future AI demand. Palantir in particular has swung sharply on earnings days this year, with past post-earnings selloffs also following beat-and-raise quarters.
The moves come against the backdrop of a U.S. election that could influence everything from AI regulation to trade policy with China, adding a layer of uncertainty that traders say is compounding the usual earnings-season volatility. Markets will be watching closely for any signal from Washington once polls close.