Capitalize on Palantir (PLTR) following its massive 156% EPS growth, but watch out for its steep 2026 price-to-earnings multiple of 85 times. Play the indirect artificial intelligence boom through Caterpillar (CAT) as its power and energy division benefits directly from surging data center electricity demands. Exercise caution with SpaceX (SPACE) after its public debut, as high capital expenditures, a lofty 54 times sales valuation, and 911 million newly unlocked insider shares create near-term selling pressure. Buy Eli Lilly (LLY) to capitalize on the lucrative weight-loss drug market, as it continues to decisively outperform Novo Nordisk (NVO). Hold **Arista Networks (ANET) for the long term to capture ongoing artificial intelligence infrastructure spending, but prepare for short-term earnings volatility due to its high valuation.

Palantir (PLTR)

• Palantir reported powerful results with EPS of $41 cents (up 156% year-over-year) and revenue of $1.93 billion (up 93%), driven by a 149% increase in U.S. commercial segment revenue and 90% growth in U.S. government revenue.
• The company raised its adjusted income guidance for the year by 10%.
• The stock rallied 12% after hours following the earnings announcement.
• The main hesitation highlighted is valuation, with estimated PEs for 2026 and 2027 at 85 times and 60 times, respectively.

Takeaways

• Palantir's strong performance indicates that the market is beginning to differentiate between software winners with deep enterprise franchises and more vulnerable software companies.
• Investors should carefully weigh the company's strong fundamental growth against its high forward valuation multiples before making investment decisions.

Caterpillar (CAT)

• Caterpillar reported strong earnings with EPS of $8.17 (up 73%) and revenue growth of $24%.
• The growth is being driven by its power and energy division, which manufactures generators, engines, and gas turbines utilized in data centers, effectively positioning it as an indirect AI play.

Takeaways

• Caterpillar serves as a beneficiary of the broader AI infrastructure build-out due to the high energy and power demands of data centers.

SpaceX (SPACE)

• SpaceX reported mixed results in its first-ever public earnings report, with revenue hitting $7.8 billion (up 92%) and an EPS loss of $0.09 (beating expectations).
• Capital expenditures (CapEx) surged to $18.4 billion for the quarter, driven by higher-than-expected spending in its AI unit, with management calling for even higher CapEx ahead.
• Starlink, described as the company's only profitable business, reached 12 million subscribers, coming in slightly below the expected 12.19 million.
• The stock dropped double digits after hours; annualized revenue of $31.2 billion against a $1.6 trillion market cap puts the market cap-to-revenue multiple at 54 times, making it expensive.
• A total of 911 million shares were unlocked from insiders, creating potential near-term supply pressure.
• Elon Musk has a dedicated following of believers rather than traditional investors, making traditional valuation frameworks difficult to apply.

Takeaways

• High valuation multiples, surging AI-related capital expenditures, and upcoming insider share unlocks present notable risks for investors.

Eli Lilly (LLY) and Novo Nordisk (NVO)

• Eli Lilly demonstrated clear dominance in the diet drug wars, posting EPS of $8.38 (up 33%).
• In contrast, Novo Nordisk reported EPS of $4.75 (down 20%) as it attempts to catch up with its new GLP-1 pill without clear signs of closing the performance gap.

Takeaways

• Eli Lilly remains the clear market leader in the GLP-1 weight-loss drug market based on recent earnings execution.

Arista Networks (ANET)

• Arista Networks reported an EPS of $1.02 (up 40% year-over-year) and revenue of $3 billion (up 12%), beating expectations and prompting a 5% stock increase following a 45% year-to-date gain.
• The company sells cloud networking equipment and is a major beneficiary of AI data-centric construction alongside competitor Cisco.
• The speaker holds the stock for the long term and emphasizes that attempting to trade it quarter-to-quarter is unpredictable due to its high valuation multiple and sensitivity to forward guidance.

Takeaways

• Arista Networks is well-positioned as a long-term beneficiary of AI infrastructure spending, though short-term price volatility should be expected around earnings due to high valuation multiples.

Advanced Micro Devices (AMD)

• AMD reported fine actual results with an EPS of $1.66 (up 246%), but guidance only met expectations rather than beating them.
• The stock's performance on the print was negative as it attempts to compete with NVIDIA in the semiconductor space.

Takeaways

• Competing directly with NVIDIA is a tough challenge, and meeting rather than exceeding expectations can lead to negative short-term stock reactions for high-growth semiconductor peers.

Walt Disney Company (DIS)

• Disney reported an EPS of $2.06 (up 28%), beating expectations due to strength in streaming and parks, while revenue of $25 billion (up 7%) represented a slight miss.
• Despite solid earnings, the stock has traded flat around the $100 level for well over a decade.

Takeaways

• Solid operational metrics in streaming and parks do not automatically translate to long-term share price appreciation, as demonstrated by the stock's decade-long stagnation.