Stock Market Hits Highs As AI Plays Arm, Palantir Skyrocket: Weekly Review

The stock market rally generally advanced with the S&P 500 hitting 5,000 for the first time and the Nasdaq at its best levels in over two years. The Dow Jones held just below its all-time highs while the Russell 2000 rebounded back above key levels. AI plays Palantir (PLTR) and Arm Holdings (ARM) became the latest AI plays to surge on earnings. Eli Lilly (LLY) kept running on its results. Several cybersecurity firms rallied on earnings. Snap (SNAP) crashed on weak revenue.

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AI-Fueled Market Rally Hits New Highs

The Nasdaq led, fueled by AI-related earnings, climbing to a two-year highs. The S&P 500 advanced modestly to a fresh record high. The Dow Jones was little changed, but near all-time peaks as well. The Russell 2000 rebounded back above key levels. The 10-year Treasury yield jumped back above key levels.

Palantir Skyrockets On Commercial Growth

Palantir (PLTR) said Q4 earnings using generally accepted accounting principles, or GAAP, met views for a 100% gain. The data analytics firm’s revenue rose 20% to $608 million, slightly topping. Government revenue rose 11% to $324 million, missing estimates. But commercial revenue rose 32% to $284 million. For 2024, Palantir guided slightly higher on revenue, led by commercial growth. Shares of the AI play skyrocketed.

S&P 500 Hits 5,000; AI Plays Continue To Go Vertical

Arm Rockets On Earnings

Chip designer Arm Holdings (ARM) delivered better-than-expected December-quarter results and guidance, sending its shares up nearly 50% on the news. Arm was the latest semiconductor stock to get a boost from exposure to the red-hot artificial intelligence market. Power-chip maker Monolithic Power Systems (MPWR) also jumped on its AI-fueled fourth-quarter results and outlook. Other chip stocks rising on upbeat earnings reports included audio-chip supplier Cirrus Logic (CRUS) and tracking-chip maker Impinj (PI). Chip stocks falling on weak guidance included Alpha & Omega Semiconductor (AOSL), Diodes (DIOD) and Rambus (RMBS). Automotive chipmaker NXP Semiconductors (NXPI) and Onsemi (ON) guided lower, but rallied as analysts described their outlooks as better than feared.

Lilly Soars On Weight-Loss Drugs

Eli Lilly (LLY) handily beat Wall Street’s fourth-quarter expectations with adjusted income of $2.49 per share and $9.35 billion in sales, up a respective 19% and 28% year over year. Guidance for 2024 was also promising. High points included diabetes drug Mounjaro, which brought in $2.21 billion in sales, and weight-loss drug Zepbound, which delivered more than double what analysts expected at $175.8 million in sales. Lilly also said tirzepatide, the chemical backbone behind Mounjaro and Zepbound, showed promise in treating a liver disease known by the shorthand MASH.

Affirm, PayPal Fall On Earnings

Affirm Holdings (AFRM) reported a smaller-than-expected loss while revenue jumped 48% to $591.1 million, the third straight quarter of accelerating growth. But shares tumbled Friday following earnings, slashing big weekly gains. PayPal (PYPL) said Q4 earnings rose 19% as revenue climbed 9% to $8 billion, both exceeding forecasts. But the digital payments giant guided low on 2024 EPS.

Uber Drives Higher

Ride-hailing giant Uber Technologies (UBER) said Q4 earnings surged 127% to 66 cents per share, buoyed by investment gains, crushing views for 16 cents. Revenue climbed 15% to $9.9 billion, slightly topping estimates. Gross bookings grew 22% to $37.6 billion, edging past views. It may update shareholder return plans at its Feb. 14 analyst day.

Snap, Pinterest Skid On Weak Revenue

Snap (SNAP) reported a 43% EPS decline, though that beat views. The Snapchat parent also guided up on Q1 EBITDA. But shares crashed as Snap fell short on Q4 revenue. Pinterest (PINS) earnings nearly doubled, just topping consensus. Revenue rose 12% but missed views. Revenue guidance also was weak. PINS stock tumbled from a two-year high.

Cybersecurity Results Mixed

Cybersecurity firms topped EPS views, often easily, but some diverged on other metrics.

Fortinet (FTNT) reported Q4 earnings, revenue and billings that topped analyst estimates amid lowered expectations, with EPS up 16%, revenue up 10% and billings up 8.5%. The cybersecurity giant guided in line for 2024 EPS.

Qualys (QLYS) reported Q4 EPS growth of 38%, topping views, while a 10% revenue gain just met. Guidance was weak for 2024. Also, Microsoft (MSFT) will end its marketing pact with the security vulnerability management services firm on May 1.

Tenable (TENB) reported Q4 EPS of 25 cents, up 108%, easily beating views. Revenue rose 16% to $213.3 million, modestly above consensus.

Rapid7 (RPD) reported Q4 earnings and revenue that rose 106% and 11%, respectively, topping estimates. But an 11% billings gain fell short.

CyberArk Software (CYBR) said EPS jumped 406%, crushing views, while revenue rose 32% to $223.1 million, above forecasts. CyberArk guided up on 2024 revenue.

Fortinet and Tenable rose above buy points during…