The US stock AI craze continues: Palantir and AMD stock prices both rise

This week’s US stock earnings season continues to advance, with many signals indicating that market enthusiasm for artificial intelligence (AI) has not waned.

On February 2nd, U.S. AI software services company Palantir announced better-than-expected earnings, boosting its stock price, which has gained over 75% in the past year.

Advanced Micro Devices (AMD) will release its earnings on February 3rd, and driven by optimistic sentiment, the stock also rose on the 2nd.

Palantir: Revenue Up 70% Year-over-Year

On February 2nd, Palantir (stock code: PLTR) announced its latest quarterly earnings. For the quarter ending December 2023, the company’s revenue increased 70% year-over-year to $1.41 billion, with a net profit of $609 million, both surpassing market expectations. The company’s full-year revenue was $4.475 billion. Adjusted earnings per share (EPS) were 25 cents, higher than the market forecast of 23 cents, representing a significant increase from 14 cents in the same period last year.

The earnings report also showed that 47% of the company’s 2025 sales are converted into free cash flow, and it currently holds over $7 billion in cash and marketable securities.

Looking ahead, Palantir expects 2026 revenue to be between $7.182 billion and $7.198 billion.

After the earnings release, Palantir’s stock price rose about 7% in after-hours trading. Despite a roughly 12% decline since early 2026, the stock has still gained over 75% in the past year.

The company’s current market capitalization is approximately $350 billion, making it one of the highest-valued stocks in the S&P 500. According to The Wall Street Journal, after inflation adjustments, no other S&P 500 company with similar revenue scale has achieved such a high valuation.

Palantir’s business growth is driven by strong demand for AI technology from the U.S. government and commercial sectors. Its core business helps government agencies and large enterprises leverage AI to integrate and analyze massive data sets (603138) to support decision-making. Although its origins are in defense and intelligence, and it recently secured a new contract with the U.S. Navy worth up to $448 million, the commercial sector has become a key growth engine. The company believes that all large organizations with vast data will benefit from its software, with the U.S. market being its primary growth driver.

Earnings data also reflect this trend: revenue from U.S. commercial clients surged 137% to $507 million; revenue from U.S. government clients increased 66% to $570 million.

In more challenging international markets, the company achieved a 22% year-over-year growth in international sales, and this month, it signed a three-year contract worth approximately $328 million with the UK Ministry of Defence.

However, controversy surrounding the company has never ceased. Palantir has been under scrutiny for its cooperation with the U.S. Immigration and Customs Enforcement (ICE). Critics argue that, with its intelligent technology, ICE can more efficiently identify and deport immigrants, especially after the recent “Minneapolis incident,” which brought public criticism of Palantir to a peak.

Nevertheless, the market remains optimistic about the stock. William Blair analyst Louis DiPalma recently upgraded Palantir’s rating to “Outperform.” He believes that despite recent pullbacks in the software sector, Palantir’s leadership in AI, new government contracts, and ongoing profit expansion provide upward momentum for its stock. DiPalma expects Palantir’s stock price to break through $200 within the next 12 months. The stock has fallen nearly 30% from its high in November 2025, and DiPalma sees this as a buying opportunity for investors.

In fact, the company has long been known for its high valuation, with a price-to-earnings ratio of 148, making it one of the most highly valued stocks in the market, supported by many retail investors. DiPalma believes that compared to recent venture capital valuations of other AI companies, Palantir’s current valuation is relatively reasonable.

AMD: Target Price Set at $290

AMD will release its latest quarterly earnings after the market close on February 3rd, with server CPU (central processing unit) supply tightness and licensing of chips for China being two major points of focus on Wall Street. Market expectations are for revenue of $9.7 billion in the fourth quarter of last year, with the data center business expected to contribute $5 billion.

As of the close on February 2nd, driven by optimistic market sentiment, AMD’s stock rose about 4% during regular trading, with further gains in after-hours trading. Currently, it trades at $246.27, with a market cap of approximately $400.9 billion.

Investors’ focus is shifting from “AMD vs. Nvidia in AI chips” to its CPU business, especially the growth prospects for data center server CPUs. Additionally, investors generally believe that under the growth of traditional server chip demand driven by AI, AMD has advantages over its competitor Intel.

Wedbush Securities analyst Matt Bryson noted that AMD doesn’t need to directly compete for market share in Nvidia-dominated advanced AI chips. He believes that as long as AMD demonstrates strong sales in personal computers and data center server CPUs in this earnings report, investors will see good returns.

RBC analyst Srini Pajjuri stated in a report on February 2nd that supply constraints faced by Intel will give AMD more market share. The tight supply of AMD’s server CPUs will allow the company to raise prices, boosting profit margins. Currently, server CPUs are among AMD’s most profitable product lines.

While the CPU business remains the current focus, AMD’s progress in AI continues to attract close attention. Last October, AMD announced plans to collaborate with OpenAI to deploy computing systems supporting the expansion of OpenAI’s data centers. This partnership is seen as a significant milestone for AMD in AI infrastructure.

Additionally, sales targeting Chinese customers are viewed as another potential growth driver. In January 2026, U.S. authorities authorized the sale of certain chips to China, which could open new markets for AMD.

According to FactSet, analysts generally expect AMD’s adjusted EPS for Q4 2023 to be $1.32 on revenue of about $9.7 billion. Based on the pricing power of server CPUs, opportunities in the Chinese market, and overall growth prospects, analysts have given AMD a “Outperform” rating with a target price of $290. This target represents an approximately 18% upside from the February 2nd closing price.