Nasdaq futures rise as AI-linked forecasts support chip and software stocks

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Nasdaq futures rise on AI optimism

Highlights

Nasdaq 100 E-minis rise 0.45% and outpace broader indexes as Palantir and On Semiconductor deliver upbeat AI-linked revenue forecasts.
Palantir surges 17.2% and On Semiconductor gains 7.5% in premarket after both companies raise revenue guidance on robust AI-related demand.
85.2% of S&P 500 firms reporting have beaten Q2 estimates, far above the long-term average of 67.5%, underpinning investor optimism this earnings season.

AI outlooks lift premarket sentiment

As reported by Reuters, Nasdaq 100 E-minis are up 129.25 points, or 0.45%, at 05:16 a.m. ET, outperforming gains in broader U.S. index futures as investors respond to stronger forecasts from Palantir Technologies and On Semiconductor.

Palantir rises 17.2% in premarket trading after raising its annual revenue forecast again, pointing to solid government and commercial demand for its AI-powered data analytics software. On Semiconductor adds 7.5% after forecasting quarterly revenue above expectations, supported by demand for power management chips used in AI data centers.

Other AI-linked stocks also trade higher, with Micron up 2.3%, Nvidia rising 0.7% and Marvell gaining 4.4%. Investors have been closely tracking earnings from AI-related companies this season for evidence that heavy spending is translating into returns, after strong results from Microsoft and Amazon last week help underpin Wall Street gains.

The benchmark S&P 500 is about 21 points away from its first record high since June, while the Dow closes at a record high on Monday for the first time since July. Dow E-minis are up 34 points, or 0.06%, and S&P 500 E-minis rise 5 points, or 0.07%.

Earnings calendar tests broader market strength

This earnings season is running ahead of historical norms. Of the 304 companies in the S&P 500 that have reported second-quarter earnings as of Friday, 85.2% beat estimates, compared with a long-term average of 67.5%.

Snap jumps 8.1% after topping second-quarter revenue estimates, helped by stronger advertising spending during the FIFA World Cup and more active campaigns from large North American advertisers. Later on Tuesday, investors are due to hear from Merck, Pfizer, Caterpillar, Marathon Petroleum and McDonald's, offering a broader read on consumer demand, industrial activity and energy markets.

McDonald's results arrive as a cyclosporiasis outbreak potentially linked to lettuce grows into the largest on record in the country, with Michigan hit hardest. SpaceX, led by Elon Musk, is also set to release its first earnings report since its public debut after markets close, with its shares up 1% in premarket trading.

In our earlier coverage of Big Tech’s unrealized gains from stakes in private AI companies, we explained that mark-to-market investment profits tied to holdings in names like OpenAI, Anthropic and SpaceX can materially inflate reported quarterly earnings. We noted that stripping out these non-operating gains can make underlying S&P 500 earnings growth look meaningfully lower, even as headline results and “beats” appear unusually strong due to the mega-cap tech weighting.

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