Working with the government continues to be an important part of the business for Palantir Technologies Inc (NASDAQ: PLTR).

On Monday, the big data analytics company won an expansion on its contract with the US Special Operations Command.

But could the “government” segment of Palantir be at risk now that President-elect Donald Trump has tasked Elon Musk and Vivek Ramaswamy with cutting the US federal budget by some $2.0 trillion?

Well, not really, as per Alex Karp – the chief executive of Palantir Technologies Inc.

Why does Karp has confidence in Elon Musk

Alex Karp dubbed Elon Musk the best person to lead the new initiative called the Department of Government Efficiency.

He does not expect the billionaire entrepreneurs to hurt Palantir’s business as it equips the government with productized software that tends to be enormously efficient.  

“I have enormous faith in both of them to figure out what’s working,” CEO Karp said in a recent interview with Fox Business.  

Efficiency and transparency within government operations, he’s convinced, will produce better results at a lower cost – something that’s in line with the broader agenda of the Department of Government Efficiency.

That’s why Palantir’s US government revenue increased by 40% on a year-over-year basis to $320 million in the company’s latest reported quarter.

Palantir handily beats the ‘Rule of 40’

CEO Alex Karp took a positive tone as he discussed what the future holds for Palantir Technologies with Fox Business.

He’s bullish as the “primary basis of the US economy right now is technology”. More importantly, PLTR is well-positioned to capitalise on AI which Statista expects will be a $1.0 trillion market within the next ten years.

According to the “Rule of 40”, a well-performing software-as-a-service (SaaS) company should have a combined year-over-year revenue growth rate and profit margin of at least 40%.

Palantir, in comparison, sits at a global high of 68 at writing, the chief executive added. Nonetheless, PLTR stock has yet to announce a dividend.

Analyst still recommends pulling out of Palantir stock

Despite rapid growth and the management’s confidence, William Blair analyst Louie DiPalma remains bearish on Palantir stock due to valuation concerns.

He sees PLTR as fairly valued at about $40 since its fundamentals are not all that different from Snowflake. Still, Palantir Technologies is worth over $100 billion more than SNOW at writing.

DiPalma expects the Nasdaq-listed firm to fall more than $700 million short of its revenue estimate for 2025.

He does now see the company’s recent team-up with Booz Allen to ramp the US national defence as a meaningful catalyst either.

As such, William Blair recommends that investors now take profit in Palantir shares that have more than quadrupled since the start of this year.

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Reddit Inc (NYSE: RDDT) opened sharply up on a double dose of good news this morning but then pared its entire gain to turn red within an hour.

Morgan Stanley analyst Brian Nowak upgraded the forum social network today to “overweight”. His $200 price target suggests another 25% upside from here.

Additionally, the company launched a new AI feature dubbed Reddit Answers as well on Monday.

Still, its shares are down close to 3.0% at writing perhaps due to aggressive profit-taking in the social media stock that at one point was up 350% versus its year-to-date low in April.

Other than that, there’s no explanation (news, filing, or update) for such a material sell-off in Reddit stock on Monday.

Why is Morgan Stanley bullish on Reddit stock?

Morgan Stanley is convinced that investors haven’t missed the boat on Reddit stock even though it has already quadrupled this year.

Why? Because it’s “rapidly shipping its pipeline of engagement and advertising initiatives” that analyst Brian Nowak expects will “drive industry-leading user, time spent, and ad revenue growth.”

He’s convinced that RDDT will expand its user base while maintaining industry-leading incremental margins next year.

Reddit is on track to end this year with daily active users (DAUs) well over its initial expectations for 2024.

Morgan Stanley recommends owning Reddit stock as its global ad revenue will surpass $3.0 billion by 2027 on the back of rapid growth in machine learning and ad automation.

Here’s what we know about Reddit Answers

Reddit Answers is aimed at helping people find answers more quickly than ever before. It will rely on posts on the platform instead of sourcing responses from the web at large.

The company is testing its new AI feature with a small subset of US users before rolling it out more broadly.

Reddit Answers is “more about building a bridge to the content than it is about being a replacement for it,” Serkan Piantino – the vice president of Reddit said in an interview today.

The new offering will help users find answers to all queries except ones deemed “not safe for work (NSFW), as per a press release on Monday.

Despite rapid growth, Reddit stock does not currently pay a dividend.

Should you buy Reddit shares today?

Reddit stock returning to the price at which it closed on Friday may have created a good buying opportunity for investors.

On Monday, famed investor Jim Cramer reiterated his bullish stance on RDDT as well, saying, “Maybe it was worth $300 all along and it’s just totally mispriced.”

Cramer is positive on Reddit shares as he has immense confidence in the leadership of its chief executive – Steve Huffman.

In October, the New York-listed firm came in handily above Street estimates for its third quarter as well.

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Bank of America analyst Vivek Arya warned of potential market share losses as he downgraded shares of Advanced Micro Devices Inc (NASDAQ: AMD) on Monday.

He now has a “neutral” rating on AMD stock.  

The multinational chipmaker is broadly seen as a notable beneficiary of artificial intelligence.

But Arya is not entirely convinced that it’s well-positioned to capitalise on the AI tailwinds.

AMD shares are currently down about 35% versus their year-to-date high.

AMD stock faces higher competitive risks

Vivek Arya downgraded AMD shares this morning due to “higher competitive risks.”

The Nasdaq-listed firm will likely find it increasingly difficult to gain share in the AI space against the “best-of-breed NVDA’s dominance,” he added.

BofA’s Arya now expects AI chips to generate up to $8 billion in revenue for Advanced Micro Devices in 2025. His previous forecast called for up to $8.9 billion instead.

His estimate implies the California-based company will only maintain its current market share of about 4.0% in the coming year. AMD stock remains unattractive for income investors as well since it doesn’t currently pay a dividend.  

Custom AI chips could weigh on AMD shares

The Bank of America Securities leaned a bit more towards a dovish view on Advanced Micro Devices today also because cloud customers have already started indicating a preference for custom chips.

Amazon, the largest cloud customer, for example, continues to favour Nvidia products and custom chips (Trainium/MRVL) over AMD’s offerings.

AMD has so far been able to win business from other hyperscalers like Meta Platforms, Microsoft, and Oracle, but “their capex requirements for NVDA’s premium Blackwell could also limit share gain opportunity for AMD’s MI products,” Vivek Arya told clients in a research note on Monday.

The analyst expects AMD’s share in AI accelerators to remain capped at about 5.0% over the long term. Custom chips will own between 10% and 15% of that market while Nvidia will continue to dominate with an over 80% share, he added.

AMD is growing slowly as an AI beneficiary

AMD stock has struggled over the past month after reporting in-line earnings for its third financial quarter.

The chipmaker doubled its data centre sales in Q3 but issued current-quarter guidance that only matched the consensus estimate for overall revenue.

Advanced Micro Devices expects its sales figure to print at about $7.5 billion in the fourth quarter which translates to a 22% annualised growth. That’s much lower than what other AI names like Nvidia are projecting for the future.

Nonetheless, “customer and partner interest for MI325X is high. Production shipments are planned to start this quarter,” the company chief executive, Lisa Su, told analysts on the earnings call.

AMD launched the M325X accelerator in October to take on Nvidia’s Blackwell.

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Benchmark Indian equity indices BSE Sensex and Nifty 50 advanced on Tuesday, buoyed by gains in IT, metal, and real estate stocks.

At 10:34 am, the BSE Sensex rose 0.14%, while the Nifty 50 edged up by 0.092%.

The BSE Metal Index outperformed, climbing over 1%, with major gainers like Jindal Steel, NMDC, and APL Apollo driving momentum.

The Nifty IT Index and Nifty Realty Index also recorded steady gains of 22 points and 7 points, respectively.

Greaves Cotton surges to a 52-week high

Greaves Cotton shares surged 13.58% to reach a 52-week high of ₹242.20 after ace investor Vijay Kedia acquired a 0.52% stake in the company.

Kedia’s purchase of 12 lakh shares at an average price of ₹208.9 per share, totalling approximately ₹25 crore, fuelled market excitement.

The strategic move follows Greaves Cotton’s announcement of an IPO for its subsidiary, Greaves Electric Mobility, signalling growth prospects in the electric vehicle segment.

This marks the stock’s strongest single-day gain in three years.

ITI Limited continues rally

ITI Limited shares extended their upward trajectory for a third consecutive session, hitting an all-time high of ₹404 on the NSE.

The stock opened at ₹385, up from its previous close of ₹368.10, before soaring 9.8% to its new peak.

By 10:30 am, ITI shares traded 7.42% higher at ₹395.40, with a market capitalization nearing ₹38,000 crore.

The stock has gained nearly 40% over the past three days, reflecting strong investor confidence amid robust buying interest.

Mishtann Foods falls as SEBI takes action

Shares of Mishtann Foods plummeted nearly 10% to ₹8.95 after the Securities and Exchange Board of India (SEBI) barred the company, its promoter, and four other entities from the securities market for alleged financial irregularities.

SEBI’s investigation revealed that Mishtann Foods engaged in circular trading with fictitious buyers and suppliers, many of which were shell entities controlled by company insiders.

This scandal has raised concerns over corporate governance and could lead to further regulatory scrutiny.

Inflation data eyed amid global cues

Upcoming CPI data releases in India and the US are expected to guide market sentiment.

US CPI figures, due Wednesday, could influence the Federal Reserve’s interest rate decisions.

Markets anticipate an 86% probability of a 25 basis point rate cut at the Fed’s December 18 meeting.

India’s CPI data, due Thursday, is projected to have slowed to 5.53% in November, retreating below the Reserve Bank of India’s 6% upper tolerance limit, according to a Reuters poll of economists.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted a consolidation phase in Indian markets.

“There are no major triggers for a new bull orbit or deep correction. The current weakness in FMCG stocks presents a buying opportunity for long-term investors,” he noted.

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The recent fall of Bashar al-Assad’s regime in Syria marks a seismic political shift, unlocking both challenges and opportunities for Turkey.

Experts and business leaders anticipate significant ripple effects on Turkey’s economy, particularly through reconstruction efforts and workforce dynamics.

Turkish construction and cement sectors to spearhead rebuilding efforts

Shares in Turkish construction and cement companies surged on Monday following the announcement of Assad’s ouster.

Bursa Çimento and Oyak Çimento climbed 5.3% and 9.9%, respectively, while steelmaker Iskenderun Demir Çelik saw a 10% increase.

Analysts attribute these gains to expectations of a pivotal role for Turkish companies in rebuilding war-torn Syrian cities.

“Cement producers like Limak Doğu Anadolu Çimento and Oyak Çimento are poised to benefit, while construction giant Enka Inşaat is likely to lead large-scale projects,” said Yakup Toktamış of Trive Yatırım.

Turkey’s proximity and existing trade ties with Syria position its firms advantageously for contracts tied to the rebuilding of infrastructure devastated during the 13-year civil war.

Brokerage firm Info Yatırım’s Yusuf Doğan added, “Cement and steel will be the core catalysts for Syria’s reconstruction, creating long-term opportunities for Turkish companies.

However, the timeline for project implementation may temper investor expectations.”

Economic challenges in Turkey loom as Syrian workers begin returning home

This trend is raising concerns among Turkish companies that depend on Syrian labor, which has become a cornerstone of several industries, including textiles, agriculture, and manufacturing.

At the same time, as stability returns to Syria, some Syrian refugees have started heading back.

Last year alone, over 108,000 Syrians received work permits in Turkey.

The departure of this workforce could strain industries reliant on low-cost labor, driving up costs and reducing profitability.

“Given weak domestic demand, companies may struggle to pass on these costs to consumers,” warned industry analysts.

Despite these challenges, some business leaders remain optimistic.

Mehmet Kaya, president of Diyarbakır’s Chamber of Commerce, stated, “Syrians form a small percentage of the labor force in Turkey. Many of them have established businesses or moved into white-collar roles, suggesting not all will leave.”

In Gaziantep, a hub for Syrian businesses and industries, Syrian workers make up just 3% of the labor force, according to Fikret Kileci of the Anatolian Exporters’ Association.

Adnan Ünverdi, president of Gaziantep’s Chamber of Commerce, echoed this view, noting that Syrian-owned businesses primarily employ Syrians.

“If they return, operations might see short-term disruptions, but companies can easily fill gaps with unemployed Turkish workers,” Ünverdi said.

Bilateral trade revival anticipated

Bilateral trade between Turkey and Syria, which peaked at $2.3 billion in 2010 before plunging to $565 million in 2012 due to the conflict, is expected to rebound.

“Trade between Türkiye and Syria will gain momentum,” said Cemal Demirtaş from Ata Yatırım.

The reconstruction process could significantly boost Turkey’s exports to Syria, particularly in cement and steel.

However, the scale and pace of this revival will hinge on political and economic developments in Syria.

While demand for Turkish goods may rise, global economic uncertainties and geopolitical risks could temper gains.

Geopolitical dynamics: a boon for Erdoğan’s agenda

Bashar al-Assad’s fall is seen as a strategic win for Turkish President Recep Tayyip Erdoğan, whose government has backed Syrian opposition groups throughout the conflict.

With Assad gone, Turkey’s influence in Syria could expand, allowing Ankara to curb Kurdish separatists in northeastern Syria and secure its southern border.

Economist Timothy Ash described this development as a “genius move by Erdoğan,” emphasizing the strategic and economic benefits Turkey stands to gain.

Investment outlook: cautious optimism

The fall of Assad has driven optimism in Turkish financial markets, with construction and cement indices seeing strong gains.

However, analysts urge caution, highlighting the long timelines for infrastructure projects and potential volatility in Syria’s political landscape.

Serhat Başkurt of ALB Yatırım highlighted the importance of firms like Enka Inşaat and Bursa Çimento. “Enka’s expertise in international projects positions it as a leader in Syria’s reconstruction, while Bursa Çimento’s capacity gives it an edge in cement supply,” he said.

While investors remain bullish, the broader implications for Turkey’s economy—ranging from labor market adjustments to trade dynamics—underscore the complexity of navigating the post-Assad era.

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