AMD and Palantir Post Record Quarters, Yet Both Stocks Slide

AMD shares fell 30.47% over the past month to $449.04, even though the chipmaker just reported a record quarter. Palantir dropped 17.38% to $160.38 over the same period, after revenue grew at the fastest pace in its history as a public company. Both businesses are accelerating while both stocks are falling.

The selling began with concerns about enormous AI spending commitments, debt financing and high valuations. Once institutions started cutting exposure, leverage and options hedging may have amplified the decline without any deterioration in fundamentals. Nobody can yet say how much of the drop came from forced deleveraging. The filings, for their part, show two businesses speeding up.

Why does valuation favor AMD?

Palantir trades at 228 times earnings, 50.08 times book value and 176.12 times free cash flow, with an earnings yield of 0.44%. AMD is not cheap either, at 109.97 times free cash flow and 11.69 times book. But AMD's earnings are catching up with its share price.

• Non-GAAP EPS of $2.09 rose 74%, faster than revenue growth of 45%.
• The EPS figure beat estimates by 7.92%.
• Palantir's multiple only works if the company performs perfectly for years.

On price relative to profits, AMD offers far more cushion.

Which company is growing faster?

Palantir posted third-quarter revenue of $2.313 billion, up 95.9%. Executives called it "the highest growth rates we've ever delivered as a public company." U.S. commercial revenue jumped 148% to $984 million and exceeded U.S. government revenue for the first time. Net dollar retention reached 165%, and full-year guidance rose for the third straight update to a range of $8.530 billion to $8.534 billion, or 91% growth.

AMD is accelerating too:

• Data Center revenue rose 97% to $8.546 billion.
• Fourth-quarter guidance calls for about $17 billion in revenue.
• CEO Lisa Su expects revenue to grow more than 80% in 2027.

Palantir is already delivering that kind of growth, with gross margins of 82.4%. The growth round goes to Palantir.

Whose balance sheet is stronger?

AMD's record quarter had weak spots. Operating cash flow fell 44.33% to $1.2 billion, and free cash flow dropped 70.86% to $554 million. Inventory rose 35% sequentially to $11.46 billion. Total debt reached $7.08 billion after an August notes offering, and a $1,097 million customer warrant charge pulled GAAP EPS down to $1.46.

Palantir carries a debt-to-equity ratio of 0.031, holds net cash, and keeps $10.4 billion in cash and Treasuries. It generated $1.216 billion of adjusted free cash flow in the quarter, and its one-month decline was smaller than AMD's. Two risks remain worth tracking: stock-based compensation rose to $318.9 million from $172.3 million, and total contract value grew just 6%.

Which stock fits a retirement portfolio?

Palantir wins two of the three rounds, but valuation is the round that matters most for a retirement investor, and AMD wins it. Neither company pays a dividend, so all of the return must come from share price gains. The price paid is therefore the main protection against loss.

Palantir shows how a valuation correction can hit even excellent results: the stock is down 9.77% this year while revenue grew at a 95.9% clip. AMD is up 109.68% year to date because its earnings are growing into its valuation.

Su put the demand picture simply: "We do have more demand than we have supply." Customers including Anthropic, Meta, Microsoft, OpenAI and Oracle are bringing Helios racks online. AMD's cash flow dip comes from building inventory to fill those orders, a working-capital cost of growing fast rather than a break in the business itself.

On these metrics, AMD's profile lines up more closely with retirement-focused priorities. Palantir suits younger growth investors with decades to wait out a correction and the stomach for a stock priced at 228 times earnings. For investors trying to avoid a multiple collapse, AMD's faster-rising earnings and lower valuation remain the more relevant factors to watch.