Key Notes
- Apple and Palantir shares fell in Tuesday trading despite both companies topping earnings estimates.
- Apple expects holiday-quarter gross margin of 45% to 46%, with higher memory costs weighing on profitability.
- Palantir raised its annual sales outlook after quarterly revenue rose 96%, while the potential value of new contracts grew 6%.
Apple (Nasdaq: AAPL) and Palantir Technologies (Nasdaq: PLTR) fell Tuesday after both companies topped earnings expectations. Apple warned that rising memory costs would squeeze its holiday-quarter gross margin. At Palantir, revenue nearly doubled from a year earlier, while the value of contracts it signed grew much more slowly.
Apple fell about 4.4% and Palantir about 6% in the premarket snapshot CNBC reported. Both pared those losses in regular trading. Around 11 a.m. Eastern, Apple was down 2.7% and Palantir was down 1.5%, while the Nasdaq Composite rose 1.1%, the Associated Press reported.
Memory Costs Weigh on Apple’s Holiday Outlook
In its first earnings report under Chief Executive John Ternus, Apple posted $114.5 billion in fiscal fourth-quarter revenue, up 12% from a year earlier, and diluted earnings of $2.10 a share, up 14%. iPhone sales set a September-quarter record and Services revenue reached an all-time high. Tariff refunds contributed about one percentage point to its 47.9% gross margin and five cents to earnings per share.
Management projected gross margin of 45% to 46% for the December quarter and flagged higher memory costs on its earnings call. Even after subtracting the approximate September refund benefit, the top of the new range sits below the prior quarter’s margin. Gross margin measures the share of revenue Apple keeps after the direct cost of its products and services.
Apple enters the holidays with the iPhone Duo and the iPhone 18 Pro lineup. As we reported, iPhone revenue beat estimates in the September quarter, while Greater China and wearables, home and accessories came in below expectations. The holiday report will show how much the new devices contribute and how much of those sales Apple keeps as component costs rise.
Palantir Raises Guidance as Contract Growth Lags Sales
Palantir reported third-quarter revenue of $2.313 billion, up 96% from a year earlier, and adjusted earnings of 44 cents a share. US commercial revenue climbed 148% to $984 million, overtaking US government revenue of $953 million for the first time.
The company raised its full-year revenue forecast to $8.530 billion to $8.534 billion and projected about $2.65 billion for the fourth quarter, as we reported. The midpoint implies growth of about 15% from the third quarter, following sequential growth of 20% in the period just reported.
Palantir signed contracts with a potential total value of $2.918 billion in the quarter, up 6% from a year earlier. The measure includes the potential lifetime value of new contracts, including options customers can choose to exercise. Quarterly revenue reflects sales already recognized, including revenue from earlier contracts. Tracking both figures gives investors a view of how quickly current sales are rising and how much potential business the company signed during the same period.
