Palantir Shares Surge 22% After Beating Q4 Earnings and Revenue Expectations

Local Market Commentary

The Top 40 index declined 0.42% to 77,473.4, while the All Share index fell 0.54% to 85,490.1. U.S. President Donald Trump announced the suspension of aid to South Africa, citing unverified claims of land confiscation and discrimination. President Cyril Ramaphosa refuted these allegations, confirming that no land had been seized and committing to engage with Trump for clarity. Meanwhile, billionaire Elon Musk, a Trump supporter, added pressure on Ramaphosa by questioning South Africa’s ownership laws in an X post following Trump’s remarks on land expropriation.

European Market Commentary

European shares suffered their biggest one-day drop in over a month, with automakers leading losses amid fears that Trump’s latest tariffs could escalate into a broader trade war. The export-heavy STOXX 600 index fell 0.9%, while Germany’s DAX led regional declines. In contrast, Ireland’s manufacturing sector returned to growth in January, with the AIB Ireland Manufacturing PMI rising to 51.3 from 49.1 in December. France’s CAC 40 dropped 1.2% as Prime Minister Francois Bayrou bypassed parliamentary approval for the 2025 budget bill using a special constitutional measure.

U.S. Market Commentary

U.S. markets closed lower but recovered from steeper losses after Trump postponed tariffs on Mexico for one month following an agreement to deploy 10,000 National Guard members to curb illegal drug flows. Initial market declines were triggered by Trump’s tariff orders on three countries, driving investors toward safe-haven assets. Defensive sectors like healthcare and consumer staples outperformed, while technology and consumer discretionary stocks lagged. The Russell 2000 rebounded from a three-week low, and Treasury yields edged lower as investors moved into bonds and gold. Meanwhile, U.S. manufacturing expanded for the first time in over two years in January, according to the Institute for Supply Management.

Asia Market Commentary

Asia-Pacific markets rose this morning after Trump temporarily paused tariffs on Mexico, while Canada confirmed a similar delay on proposed U.S. tariffs on its exports. However, Mitsubishi Motors shares plunged as much as 15.25% after the company slashed its FY2025 net profit forecast to 35 billion yen ($230 million), a sharp 76% drop from the previous 144 billion yen projection in May 2024.

Currency Market Commentary

The South African rand and government bonds weakened following Trump’s announcement to suspend aid to the country. Meanwhile, the dollar index edged lower as Trump postponed new tariffs on Mexico, giving both nations time for further negotiations. Elsewhere, the British pound slipped against the dollar but gained against the euro, as markets assessed the impact of U.S. tariffs on Canada, Mexico, and China while speculating that the UK could avoid similar measures.

Commodity Market Commentary

Gold prices remained near record highs, supported by safe-haven demand amid U.S. tariff concerns and inflation fears, with investors closely watching upcoming jobs data. Global bullion banks are moving gold into the U.S. from hubs like Dubai and Hong Kong to take advantage of the premium on U.S. gold futures over spot prices. Oil prices declined as Trump delayed steep tariffs on Mexico and Canada, the two largest foreign oil suppliers to the U.S. OPEC+ considered Trump’s request to boost output but opted to maintain its gradual production increase plan starting in April. Investors now await U.S. oil inventory data, which is expected to show rising crude stockpiles alongside declines in gasoline and distillate inventories.

Harmony Gold Mining Company Limited (HAR) +2.93%
Harmony Gold delivered a robust performance in H1FY25, driven by higher underground recovered grades and operational efficiency. Gold production ranged between 790,000–805,000 ounces, with South African underground grades exceeding 5.80g/t, largely due to Mponeng’s strong output. All-in sustaining costs (AISC) remained well-controlled at R960,000–R985,000/kg. The company is on track to meet the upper end of its full-year guidance of 1.4–1.5 million ounces while maintaining AISC within the R1,020,000–R1,100,000/kg range. Harmony’s balance sheet strengthened with increased net cash, supporting approved capital projects. All underground operations, except Target 1, generated positive free cash flow, complemented by strong contributions from surface-source operations and the Hidden Valley Mine. CEO Beyers Nel reaffirmed Harmony’s focus on sustainable, profitable ounces and cash flow generation. Nel will speak at the Investing in African Mining Indaba on 4 February 2025, with interim financial results set for release on 4 March 2025 at 10:00 SAST.

Vodacom Group Limited (VOD) +5.68%

Vodacom posted a resilient performance, with group revenue rising 1.6% to R39.5 billion, despite a stronger rand. Normalised group service revenue grew 11.6%, surpassing medium-term targets. In South Africa, service revenue rose 3.2%, led by a strong prepaid segment. Egypt delivered an impressive 44.3% service revenue growth in local currency, supported by increased financial services revenue. International service revenue grew 1.4% (7.0% normalised) despite challenges in Mozambique. Group financial services revenue expanded 5.7% (17.2% normalised) to R3.6 billion, reflecting growing digital financial adoption. Vodacom’s mobile money platforms, including Safaricom, processed US$437.7 billion in the past year, reinforcing its leadership in digital financial services.

Pepkor Holdings Limited (PPH) +3.37%
Pepkor gained market share over three-, six-, and twelve-month periods, driven by improved product availability and strong retail execution. PEP and Ackermans, accounting for 66% of group sales, recorded double-digit sales growth, maintaining momentum beyond early FY24 trends. Speciality faced footwear competition, but Refinery Junior saw strong demand, and Pepkor Lifestyle expanded, with Home sales up 15.1% and Tech rising 2.0%. PEP Africa maintained trading momentum despite currency devaluation, while Avenida in Brazil faced sales pressure from store maturity challenges and a weaker currency. Group cash sales increased 6.2%, and credit sales surged 30.9%, boosting the credit mix to 16% from 13%, driven by retail credit interoperability. The store network expanded by 76 net new stores, reaching 5,975 locations, with plans for 250–300 new openings in FY25. Fintech saw rapid growth, with revenue up 35.0% to R3.8 billion. Financial services revenue jumped 65.7% to R1.6 billion, fueled by credit expansion, handset rentals, and insurance. The A+ credit base grew to three million accounts, with 299,000 new activations. FoneYam’s rental base surged to 1.2 million, while Flash revenue grew 19.3% to R2.2 billion, with tap-to-pay rollouts driving a 24.4% increase in throughput. In early January 2025, group sales jumped 17.8%, boosted by back-to-school demand and strong retail performance. With Q1’s strong results and positive momentum, Pepkor is well-positioned for a solid FY25.

Palantir Technologies (PLTR) +1.52%

Palantir shares soared by as much as 22% in extended trading on Monday after the company posted fourth-quarter earnings and revenue that exceeded Wall Street's expectations. The company reported adjusted earnings per share of 14 cents, beating the anticipated 11 cents, and revenue of $828 million, surpassing the expected $776 million. Palantir also provided strong guidance, forecasting first-quarter revenue between $858 million and $862 million—higher than the LSEG estimate of $799 million—and full-year sales of $3.74 billion to $3.76 billion, topping the $3.52 billion consensus. Quarterly revenue grew 36% from $608.4 million a year earlier, while annual sales rose 29%. CEO Alex Karp highlighted unprecedented momentum in both commercial and government segments. U.S. commercial revenue jumped 64% year-over-year to $214 million, while U.S. government revenue increased 45% to $343 million. The company anticipates U.S. commercial sales to rise at least 54% to approximately $1.08 billion in 2025.

Tyson Foods Inc. (TSN) +2.21%

Tyson Foods raised its annual sales forecast on Monday after strong demand for beef and chicken helped it surpass first-quarter earnings estimates, pushing shares up 3%. The company, known for its chicken nuggets and Ball Park hot dogs, has improved its poultry operations after past struggles with demand forecasting and plant closures. A gradual recovery in restaurant traffic and continued strong at-home consumption have supported sales. CEO Donnie King noted that Tyson considered tariff risks when raising its annual adjusted operating income forecast to $1.9 billion–$2.3 billion, up from the previous $1.8 billion–$2.2 billion range. The company, benefiting from relatively low U.S. grain costs, now expects fiscal 2025 sales to be flat to up 1%, compared to the earlier flat to down 1% projection. For the first quarter ended Dec. 28, Tyson reported adjusted earnings of $1.14 per share, well above estimates of 88 cents. Sales in its beef unit, the company’s largest business, increased 6.2% as farmers raised cattle to heavier weights following herd reductions due to drought.

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