The Compound and Friends
00:13:00 · Josh Brown, Michael Batnick
[00:13:00] S0: It has not given much back, and I think that was an adult reaction. [00:13:04] S1: So two things weighing on it. Again, weighing whatever down 2%, but services revenue growth is slowing down. Now again, it's a it's a humongous number, but nevertheless, the market generally does not like this, and it definitely definitely doesn't like the next chart. Gross margin coming down and their estimates coming down. They spoke a lot a lot on the call about demand for memory and how they're managing that because the prices are going up and they're staying up. [00:13:34] S0: Okay. Here's the good news. By the time they're reporting Q4 and then Q1 in the first half of next year, they're already lapping these obscenely high costs for memory. And while that's not necessarily still a good thing, the comps are not quite as severe in terms of their cost. The problem that, to your point, at what point does this hold them back from being able to sell as many units as they ordinarily would have absent the shock? They announced the new MacBook with a touchscreen. [00:14:16] S1: That's like [00:14:17] S0: a $900 increase over the prior... Who the fuck is buying that? I don't know that people want to buy that. [00:14:24] S1: So they had a record quarter for iPhones. They've been able to absorb, but consumers have been able to absorb these higher prices. But how much more can they push it? [00:14:34] S0: Right. And I think that's the thing that's holding Apple. Look, we have been on the right side of Apple. Did a [00:14:41] S1: show No, have not. You have been.
00:14:41 · Michael Batnick, Josh Brown
[00:14:41] S1: show No, have not. You have been. [00:14:43] S0: All right. On this show, we did a whole episode where the title is Why Apple's Going to $400 and the stock was $3.10 $3.12 while we were talking. And I went back and watched the segment. And all the things we said were the things. It was like the transition to new management, more of a product focus, back to hardware innovation, being in a better position to weather the higher cost of components than a lot of people think they are, and just this idea of it serving as a data center hedge within the XLK. Pretty much everything else in the XLK is live or die on today's data center euphoria or panic. It really stands outside of that. [00:15:33] S1: If you're a large growth manager and you don't want to be involved in Google anymore or Meta, but you need to replace it with a market cap equivalent. [00:15:42] S0: Else? Buy. [00:15:43] S1: Where else are you going? [00:15:44] S0: You got... Video is [00:15:45] S1: not being tested. [00:15:47] S0: No. No. I wish you would. [00:15:51] S1: Let's do Palantir. I was I was surprised that Palantir's got did it again. He's... He executed. Unbelievable. This... What's that? He executed. [00:16:01] S0: One Yeah. I did I did I did not
00:16:01 · Josh Brown, Michael Batnick
[00:16:01] S0: One Yeah. I did I did I did not [00:16:03] S1: listen to the call, but we do have some charts. Their rule of 40 keeps accelerating. ChartKit broke it down. The combined... That we're looking at revenue growth as well as operating margin, and it's nothing short of remarkable. And the question the... Well, maybe the question has been answered, but the questions maybe a year or so ago was, well, it's just like a government contractor. I'm... Not anymore. Next chart. Look at the... Look at q three twenty twenty five on the left hand side to today. So obviously, yes, US government has grown dramatically. But US commercial, so nongovernment, has now surpassed And look at the next chart. Look at look at this growth. I mean, holy shit. Like, hold... This is really a holy shitter.
00:16:48 · Josh Brown, Michael Batnick
[00:16:48] S0: Wait. Go back to the first chart. So for the people listening, not watching... No. I'm sorry. Yeah. For the people listening, not watching, a year ago, the commercial revenues at Palantir, which is like Fortune 500 customers type customers, was $397,000,000 And now it's $984,000,000 So it's almost a full triple in their commercial business. And the commercial business is now larger than the government contracting business, which is nine fifty three. And again, this is in one quarter. Yeah. Over the course of one year, but I'm saying inside of this Q3 period. That's right. For anyone who was writing this off as it's basically a tech defense contractor, well, maybe that was the story. It's not the story today. What was that last chart that you had up? So this is commercial revenues on the left and the revenue growth expressed in percentage terms on the right. It's 148% commercial revenue growth year over year. How many companies are doing anything like this? None? One? Mean, these are pretty impressive. Now people will say, Oh, it can't sustain. Okay, fine. But they're doing it right now. I I get it. Yeah, eventually the Atlantic Ocean will run dry and it'll be a dust bowl. But between now and then, they're doing it. They're doing the thing. So what are your thoughts on the stock price reaction, Palantir? [00:18:28] S1: I was surprised at the initial reaction and not surprised that it took a lot of it back. So it got down. It was nine... Down 9% after hours last night, Meta finished the day down one and a half percent. So
00:18:28 · Michael Batnick, Josh Brown
[00:18:28] S1: I was surprised at the initial reaction and not surprised that it took a lot of it back. So it got down. It was nine... Down 9% after hours last night, Meta finished the day down one and a half percent. So [00:18:40] S0: Do you think that either this or Apple could follow Amazon and take back the entire... Could follow what Amazon did and take back the entire loss once the adults get a chance to process what's really going on? [00:18:53] S1: Amazon followed the same script. It was basically flat the next day. It fell 9% in the after hours, rallied all day, and it opened down 9%, rallied all day and was only down 1%. [00:19:04] S0: So They opened Amazon at 02:31, which is where people were commenting on me personally because I said I liked it the day before. Within two days, it's 02:50. [00:19:16] S1: Yeah. So can Palantir do the same thing? Yeah, for sure. [00:19:24] S0: Would you be surprised to see Palantir trading at 190 tomorrow? Wouldn't be [00:19:30] S1: at all. [00:19:31] S0: You would be? [00:19:31] S1: That... That's aggressive. [00:19:34] S0: From one seventy five? [00:19:35] S1: Yeah. So that's a huge move. I mean, [00:19:38] S0: I guess, because it's thousand It was it was $20.08 two weeks ago. [00:19:42] S1: Alright. So if Uber place plants tomorrow, if Uber opens below $60 I'll buy the stock. [00:19:48] S0: Uber has fallen six out of the last seven earnings reports. It is one of the worst rides in the market just to be long this stock. It almost doesn't matter what their results are. Even when the stock has a great report and it's They've
00:19:48 · Josh Brown, Michael Batnick
[00:19:48] S0: Uber has fallen six out of the last seven earnings reports. It is one of the worst rides in the market just to be long this stock. It almost doesn't matter what their results are. Even when the stock has a great report and it's They've [00:20:08] S1: been good reports. [00:20:09] S0: Right. I'm saying the reaction is good. Oh, they sell. It'll go up 7%. They end up over the next five days, they sell the whole thing off because in the end, they are narratively challenged. [00:20:23] S1: Yeah, it's tough. [00:20:25] S0: They are putting out a ton of press releases about partnerships with autonomous taxi companies, but people do not see them on the streets. And Waymo is full speed ahead. And it almost does not matter what Uber says, even if you get a good one day pop, which from these levels is, I would say, almost likely, what do you have? A day to sell it? Two days to sell it? Because now they report earnings the next day and the next day. So then you're back in the news vacuum where people are like, oh, Uber's fucked. I also think Dara's communication strategy needs to change. It's like, Oh, we report earnings, and I sit with Andrew Ross Sorkin, and I'm, like, so calm and serene. And then, like, that... It's not working, dude. You gotta get on Joe Rogan and talk about robots, you son of a bitch. Let's go. You gotta talk about autonomous taxis as much as Elon does. Nobody nobody cares that you're talking to Andrew Ross Sorkin. You do that every every quarter. The stock always goes down.