TOP STORY
🚀 Palantir Soars 70% Over Past 2 Months as Analysts Raise Targets

☀️ Happy Sunday everyone!

🏆 It was another volatile week in the markets, with the S&P 500 hitting a new all-time high of 7,800 on Tuesday, its first since August, only to fall over 1% just a few days later…

😰 The reason? On Thursday, AI stocks fell sharply after The Financial Times reported that OpenAI hit ~$50 billion in annualized revenue at the end of September, well below the ~$70 billion previously reported.

😅 Now, it turns out the $70B figure included ‘revenue from partners’, but that nuance wasn’t enough to stop a firestorm of negative media coverage for the AI trade…

🔻 The Nasdaq fell nearly 2% on the news (its biggest one-day loss since mid-August), with Nvidia ($NVDA) falling 3%, Broadcom ($AVGO) down 4%, and Micron ($MU) down 5%.

🕊️ But lucky for us investors, on Friday Trump gave the markets two reasons to rally, promising the U.S. military would not attack Iran before the midterm elections, and announcing a surprise deal with Putin for Russia to supply millions of tons of diesel to global markets (sending diesel futures down 4.5% on the day), leading to all three major US indexes closing out a winning week:

• The S&P 500 rose +1.15%

• The Nasdaq 100 rose +2.34%

• The TSX rose +0.9%

📈 In the bond market, the 10-year Treasury yield briefly spiked to 5.36%, a 24-year high, passing the 5.34% record we covered last week, before a government bond auction calmed things down, with yields ending the week at 5.24%.

💵 The US dollar also just finished its 4th straight week of gains, its longest streak since May 2025, as investors bet the Fed will keep raising rates to fight inflation.

✨ But while rising bond yields and interest rates tend to be bad for the stock market, there are some analysts who see it as a blessing in disguise, saying:

📊 Looking forward to the upcoming week, earnings season kicks off Tuesday with the big banks, and expectations are sky-high, with analysts projecting 29.5% earnings growth across the S&P 500 (the 3rd quarter above 25%).

🚀 All 11 sectors are expected to grow revenue and earnings year over year, something that hasn't happened since 2021.

🐝 But bonds and macro aside, let’s get into our big stories of the week:

• 🔮 Palantir ($PLTR) hitting a new all-time high (and Michael Burry’s billion-dollar bet against it)

• 🌌 SpaceX ($SPCX) spending $8 billion to take on the telecom giants, driving their worst single-day drop in 24 years.

• 💊 Plus, Moderna’s ($MRNA) 600% comeback, and the math behind Meta’s Muse and its profitability

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TOP STORY
🚀 Palantir Soars 70% Over Past 2 Months as Analysts Raise Targets

🤯 We’ve been covering famous investor Michael Burry’s massive $1B bet against Palantir short since late 2025. But this week, that bet took a big hit…

🚀 On Friday, Palantir ($PLTR) jumped 5% to close at a record $209 per share, its first all-time high since November of last year, with shares now up 25% year-to-date, almost double the performance of the S&P 500…

🎢 But this year has been anything but smooth… with Palantir crashing ~34% in the first half of the year before surging 60% last quarter and 70% in the past two months.

👀 So what’s driven the recent rally?

📈 Why the Jump?

🎯 Palantir’s rise this week came from a wave of analyst upgrades. The biggest came Thursday, when Goldman Sachs analyst Gabriela Borges (who had kept a Neutral rating on Palantir for more than 3 years through its entire 1,000%+ run) upgraded the stock to Buy with a $230 price target, sending shares up about 3% on the day.

🌐 Her case was that Palantir's potential market is about to get much bigger, thanks to "sovereign AI" (where governments buy AI systems they control rather than renting them from tech giants), custom-built applications, and tailored products for specific industries.

🥇 Borges also argued that Palantir has a head start over Microsoft ($MSFT), Salesforce ($CRM) and Snowflake ($SNOW) in using AI agents to scale up the engineers it embeds at customer sites, saying the company is "setting up for another phase of outperformance" in 2027.

📈 And she wasn't alone: Barclays initiated coverage with an Overweight rating and a $265 target, roughly 32% above the average analyst target.

🤩 So needless to say, it’s been a great week for Palantir investors. But is this just analyst hype, or is it backed up by performance?

💰 The Business Backs It Up

🔥 Overall, the numbers are incredible…

⚡ Palantir's revenue growth has accelerated for 3 straight quarters (from 63% to 70% to 85% to 93% year-over-year), with last quarter's $1.94 billion in revenue led by US commercial growth (up 149%) followed by US government (up 90%, to $809 million), an important signal of diversification away from the US government.

🤑 Even better, profits are growing faster than sales, with net income hitting $1.06 billion, more than triple a year ago, all while the company raised its full-year revenue forecast to $8.15 billion.

🧲 And the customer wins keep stacking up. Just in the past month:

• 📟 Nvidia started using Palantir's software in its own supply chain (which tracks ~1.3 million parts per server rack)

• 🤖 AI cloud company Nebius ($NBIS) named Palantir its preferred sovereign AI partner

• 👨‍💼 Former AIG CEO Peter Zaffino signed on as global head of financial services

🏛️ Palantir's own CTO says there's still plenty of room to grow, particularly with government, because even with the explosive growth, Palantir's trailing 12-month revenue from the Pentagon is still less than 0.25% of the Pentagon's total budget.

💬 All of this has Palantir's CEO Alex Karp feeling vindicated, saying on the company's last earnings call:

🐻 The Case Against the Stock

🙅 Well… not everyone believes in Karp. Burry has only gotten more aggressive as the positive Palantir news has rolled in, telling his Substack readers on September 28th that "the bubble in AI may burst sooner than later"… and that he's pulling his crash timeline forward from his previous base case of 2028, writing: "I am moving timelines up."

🏰 On Palantir, he’s even more pessimistic, calling it a ‘sand castle’ with a bet that doesn’t pay off unless the stock falls below the low-$100s by September 2027 (basically half the current price).

🧮 And while Burry is the loudest against Palantir, his core argument is one even the bullish analysts share: valuation.

🤑 Palantir now trades at ~110x forward earnings (aka how much investors pay today for each $1 of next year's expected profits), with its price-to-sales ratio at an eye-watering 80x. For comparison, Nvidia trades at roughly 25x forward earnings and Microsoft at about 10x sales. As one analyst put it:

🤝 Analysts across the board see valuation as the biggest risk. Jefferies said back in February that the "valuation doesn't make sense"… when the price was half of what it is now.

🎲 The only thing holding up a valuation like this is flawless execution… and Palantir's own history shows how thin that margin is. The company has beaten the top of its own revenue forecast by 6-9% in each of the last 5 quarters, yet two of those "beats" still sent the stock down 7% and 8% the next day.

📊 This is reflected in the analyst price targets, with analysts rating Palantir a "Moderate Buy," with an average price target of $208.29… roughly 0.4% below where the stock trades today.

👀 In other words, Wall Street likes the company but thinks the flawless execution and growth are already priced in, so be sure to keep that in mind if you're holding or considering buying the stock.

🛰️ But enough about Palantir - let’s shift gears to another popular stock: SpaceX, and its $8B attack on the Telecom industry.

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TELECOM SHAKEUP
🛰️ SpaceX $8B Investment Drives a Brutal Crash Across Telecom Giants

😱 This week, three of America's biggest telecom companies had their worst day in decades after SpaceX ($SPCX) announced it would acquire a nationwide portfolio of 800 MHz "low-band" spectrum (the radio frequencies that let phone signals travel long distances and penetrate walls) from private equity firm Grain Management, in an all-cash $8 billion deal.

📉 The market instantly took it as a major threat to the traditional telecom business, with T-Mobile ($TMUS), AT&T ($T) and Verizon ($VZ) falling between 9% and 13% on Friday… marking the worst single-day drops in 24 years for AT&T and Verizon, and in 13 years for T-Mobile.

💸 Combined, the three companies shed roughly $36 billion in market value in a single day, while SpaceX shares rose about 1%.

🤔 So what’s going on?

📡 Why The Deal Matters

🗼 With this investment, SpaceX’s Starlink Mobile could become a major U.S. carrier and the first network operator in the world running on both satellites and ground-based spectrum.

📱 And since most existing phones already support the 800 MHz band, customers wouldn't need new devices.

🚀 Musk posted on X calling the deal:

🗓️ No pricing or launch date has been given, though management says the next-generation satellites begin flying in 2027, with 5G-quality service possible in the first half of 2028.

💸 $8 Billion Is the Cheap Part

🧮 So what would ‘complete phone coverage’ cost? Well, in an analysis published before the deal, Bernstein estimated that building a standalone nationwide ground network could cost $50-$130 billion including spectrum (roughly $15-$80 billion for the equipment and cell sites alone), with a base case of about $70 billion for 57,000 cell sites built over 8 years.

🧭 That base case assumed SpaceX would get the Grain spectrum (the spectrum it just bought), which Bernstein called the only obviously available low-band spectrum on the market.

⏳ The spectrum deal still needs FCC approval, and even if approved, analysts say it only solves part of the puzzle. Evercore ISI analyst Kutgun Maral called the deal "more of a coverage fix than a capacity solution," since low-band airwaves help a signal get inside your house, but they don't on their own let millions of people stream video at once.

🃏 And TD Cowen's Gregory Williams doesn't think SpaceX will build at scale yet, saying the company still wants to rent space on an existing carrier's network first (known as an MVNO), and wrote that "SPCX could be bluffing," using the spectrum as leverage in those talks. After all, a build-out like this would take years.

🥊 So… is this really a risk for the telecom companies?

🗼 Telecom Spokesperson Says SpaceX Bought "Empty Airwaves"

😬 Telecom companies today hold a lot of leverage. They own the cell towers, the retail footprint, and hundreds of millions of customer relationships. SpaceX first has to prove its satellite-to-phone service can even match ground networks on quality and capacity, then it has to compete with the carriers on everything else.

🙄 And the telecom say they aren’t worried, with one Verizon spokesman saying SpaceX bought “empty airwaves”, and that spectrum on its own doesn’t come with the towers and equipment needed to cover the whole country:

👀 But whether SpaceX is about to disrupt the telecom industry, is using this as a bargaining chip, or just bought a bunch of empty airwaves, this week was an important reminder that even "safe" industries aren't always safe from disruption!

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Posts of the Week

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IN OTHER NEWS
⭐️ Moderna Soars, Meta Muse Math, and Small Caps Can’t Catch a Break

💉 Moderna's Comeback Keeps Going

• 📈 On Friday, Moderna ($MRNA) soared 14% to roughly $225, its highest level since January 2022, after the New York Times reported the NIH (the U.S. government's health research agency) will launch a public-private push on personalized cancer vaccines starting in December

• 🧬 Moderna is seen as the leader in mRNA cancer treatment (the same technology behind its COVID shot, but aimed at training your immune system to hunt tumors), and it's already developing a melanoma vaccine with Merck ($MRK)

• 🏆 The stock is now up 629% year-to-date, the best performer in the entire S&P 500 by far, and it recently joined the Nasdaq 100… a wild turnaround for a company most had left for dead (something we covered in detail here)

🤖 Can Meta's "Muse" Actually Make Money?

• 🥇 Meta's ($META) Muse has held the #1 spot on Apple's App Store since its September 8th launch (with Meta's stock up 18% since), and reportedly already makes up about 40% of all AI-agent traffic on the internet… but a Barron's analysis this week asked a simple question: how does Meta actually make money on it?

• 🎟️ Free Muse users get up to 100 million AI tokens a week (tokens are the small chunks of text an AI reads and writes), worth about $1,100 a year per user at market prices… versus the $63.54 per user Meta earns across all its apps. In other words, one free Muse user can consume roughly 17x more AI than the average user brings in

• 🛍️ Barron says ads would be the obvious fix, but Muse's privacy promises limit the data Meta can use to target them… so for now it's counting on shopping fees and subscriptions, which Barron's estimates would need to reach something like Visa's entire $45 billion in annual fee revenue just to cover the costs

📉 Small Caps Can't Catch a Break

• 🔻 While the big indexes hit records, the Russell 2000 (an index of 2,000 smaller US companies) has now fallen 5 weeks in a row, down 5.7% over the stretch… its longest losing streak since May 2022

• 🤖 It's the flip side of the story we covered last week: money keeps crowding into the AI giants, and the rest of the market keeps getting left behind