New York, Feb 3, 2026, 13:48 ET — Regular session underway
- Palantir topped the AI-related winners following a sharp rise in revenue and a strong outlook
- Legal and enterprise software stocks dipped amid renewed concerns over AI-fueled price competition
- Traders await AMD’s earnings report due after the bell
Palantir shares climbed 6.6% Tuesday, defying the broader selloff among AI-driven software stocks. Thomson Reuters plunged 17.4%, while Salesforce and ServiceNow each dropped roughly 8%. Adobe slipped 7.4%, and Microsoft fell 2.8%.
The split is key because the AI trade has shifted beyond a simple “spend now, win later” narrative. Investors are dividing companies into two camps: ones that demonstrate clear AI-driven returns, and others whose products face threats from being copied, automated, or pressured by those very tools.
The reassessment is now targeting sectors once seen as AI winners—particularly software and data services focused on knowledge work. In a market still betting on growth, any sign of margin pressure spreads quickly.
Denver-based Palantir reported a 70% surge in fourth-quarter revenue to $1.407 billion, according to a filing with the U.S. Securities and Exchange Commission. The company projected 2026 revenue between $7.182 billion and $7.198 billion. Palantir’s “Rule of 40” score—which combines revenue growth and adjusted operating margin—hit 127%. CEO Alex C. Karp highlighted that U.S. revenue climbed 93% year-over-year last quarter, with U.S. commercial revenue soaring 137%. (SEC)
But the rally hasn’t wiped out the risk premium attached to the stock. Palantir shares remain down nearly 17% year-to-date. The stock trades at a forward P/E of around 131, according to Reuters. CEO Karp continues to defend the company’s surveillance tech amid ongoing scrutiny of contractors connected to U.S. Immigration and Customs Enforcement. Meanwhile, Capgemini is stepping back from ICE-related work, Reuters added. (Reuters)
Tuesday’s broader sell-off followed the release of a legal plug-in for Anthropic’s Claude chatbot, sparking fresh worries that AI might disrupt business models in legal analytics and similar knowledge-based sectors. “Software companies were seen as AI’s clear winners,” noted Lars Skovgaard, senior investment strategist at Danske Bank. But Giuseppe Sersale, a fund manager at Anthilia, warned, “AI can perform the programming and knowledge-based services that underpin these business models.” (Reuters)
In Europe, legal and data providers felt the impact first, with RELX and Wolters Kluwer flagged as especially exposed. The selloff spilled into U.S. cloud and enterprise software sectors next, where investors remain split on whether AI enhancements will protect pricing or trigger new rounds of discounting.
Anthropic is pushing its “Claude for Legal” as a tool to draft contracts, conduct legal research, and review documents, though it cautions users to have qualified attorneys check the results. The launch is proving a tough test for publicly traded companies that charge top dollar for legal content and workflow solutions. (Claude)
Macro uncertainty adds to the backdrop. The Bureau of Labor Statistics announced the January jobs report won’t drop Friday due to the partial government shutdown. “The release will be rescheduled upon the resumption of government funding,” Emily Liddel said. (Investing)
Advanced Micro Devices will release earnings and hold a conference call at 5 p.m. ET, right after the closing bell. Options pricing suggests roughly an 8% swing in either direction by week’s end. AMD shares slipped about 2.9% in early afternoon trading. (Advanced Micro Devices, Inc.)
Traders are closely monitoring if AMD’s forecast will soothe concerns about AI spending—or spark more debate over which players will gain and which will face disruption in the next phase of the AI stock rally.
