Episode summary
Tech Stocks Crash Again... Apple & Palantir Expose Bigger Problem
The David Lin Report
· · 20 min · Hosts: David Lin · Guests: Alex Karp
Summary
Apple and Palantir both beat earnings expectations, but their shares sold off anyway, reinforcing the episode’s broader argument that the market is increasingly punishing even strong results when valuations are rich and outlooks are mixed. The host frames this as part of a wider tech selloff, where beats from major companies have not prevented sharp declines.
For Apple, the episode emphasizes a solid top line—fourth-quarter revenue rose about 12% to $114.5 billion, iPhone revenue rose 17% to $57.6 billion, and annual revenue growth accelerated to about 15% in fiscal 2026. Still, the stock was pressured by weaker-than-expected Greater China revenue, lower gross-margin guidance for next quarter, and questions about how Apple will handle AI spending under its new CEO, John Turnis. The host argues Apple’s relatively low capex profile leaves more free cash flow for buybacks and dividends, but also raises doubts about whether its AI strategy can keep up.
Palantir’s case was different: revenue grew 96% year over year to $2.3 billion, adjusted EPS beat estimates, and the company raised full-year guidance. Yet the stock fell because the market appears to be pricing in a very high bar. The host highlights strong margins, $10.56 billion in net cash, and Alex Karp’s “sovereign AI” pitch, but concludes that valuation and growth expectations remain the key risk.
Key takeaways
- Apple’s fiscal 2026 revenue rose about 15%, but the stock still fell because Greater China revenue missed estimates and gross margin guidance softened.
- The host says Apple’s $9 billion of annual capex is far below Alphabet’s $51.4 billion of quarterly capex, underscoring its lighter infrastructure model.
- Palantir’s revenue jumped 96% year over year to $2.3 billion, but its valuation left little room for error after the earnings beat.
- Alex Karp argued Palantir’s “sovereign AI” model lets enterprises keep the value they create inside their own organizations.
- The episode concludes that AI demand does not look broken, but investors are being forced to distinguish between business quality and stock price expectations.
Notable quotes
“Even when companies beat earnings forecasts, their shares can fall”
“the company is forecasting a lower gross margin next quarter, even as sales continue to grow”
“Apple spent about $9 billion on companywide capital expenditures during the entire 2026 fiscal year, down from 12.7 billion in 2025”
“By the way, that's not the revolution that we launched. That is a part of the revolution”
“ultimately is the AI bubble bursting? Well, I think we could conclude looking at these two companies related earnings that they don't show demand for AI disappearing yet”
How the episode opens
We're going to take a deep dive on the financials of two tech heavyweights today. Apple and Palanteer both reported earnings after the closing bell on Monday, November 2nd. Both beat Wall Street expectations, but both stocks sold off afterward.
Apple fell 2.8% in after hours trading while Palanteer dropped about 3%. The selling continued on Tuesday, November 3rd as Apple fell as much as 3.8% 8% during the session and Palunteer dropped as much as 7.3%. We're seeing a pattern across the technology stocks.
Even when companies beat earnings forecasts, their shares can fall. I'll link to the video I released last Friday about the selloff that happened last week. We covered Alphabet's roughly $500 billion on one day loss in market value, Intel's 28% drop, its worst closing day since 1974, and the declines in Amazon, Nvidia, AMD, and Micron.
Link down below. But back to Apple and Palunteer. Starting with Apple, fourth quarter revenue rose about 12% to $114.5 billion, beating Wall Street's forecast of about 113.5 billion.
Earnings per share also came in above expectations and iPhone revenue rose 17% to 57.6 billion. So why did the stock sell off despite those strong numbers? Let's look at China.
Profit margins and the transition to Apple's new CEO for clues. Greater China revenue was 17.5 billion compared with an analyst estimate of $18.75 billion. That's a miss of about $1.2 2 billion or roughly 6.5% below the analyst forecast.
One important distinction, China revenue was still up about 21% from a year earlier. So, this was a miss against expectations, not a year-over-year collapse in China sales. Next are profit margins.
Apple reported a gross margin of 47.9%, but around 1 percentage point of that came from tariff refunds. For the holiday quarter, Apple is expecting gross margin of about 45 to 46%, so slightly lower than Q3.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tech stock selloff
- apple earnings china sales
- ai spending
- palantir valuation and profitability
- ai bubble bursting
Companies and tickers mentioned
- AAPL
- PLTR
- GOOG
- GOOGL
- Apple
- Palantir
Watch the episode
Watch “Tech Stocks Crash Again... Apple & Palantir Expose Bigger Problem” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The David Lin Report, this episode and its artwork belong to The David Lin Report. Octagon is not affiliated with the show; this page is an independent summary.
