Software catches a bid as investors rotate ahead of Palantir earnings
Investing.com -- The software sector is catching a major tailwind today, fueled by a noticeable rotation out of semiconductor stocks and into high-growth enterprise tech. Microsoft’s (NASDAQ: MSFT) strong pre-market rally—driven by a massive $90 billion Q4 print and 43% Azure growth—has ignited a broader bid across the iShares Expanded Tech-Software Sector ETF.
Adding fuel to Microsoft’s rally, Goldman Sachs officially added the tech giant to its prestigious U.S. Conviction List in its August update today. In a note to clients, Goldman analyst Gabriela Borges highlighted Microsoft’s prime positioning as the AI narrative shifts from building infrastructure to "the early stages of ’how to make AI work in enterprises’".
This momentum shift is lifting key players across the board. ServiceNow (NYSE: NOW) surged 4%, while cybersecurity leaders Palo Alto Networks (NASDAQ: PANW) and CrowdStrike (NASDAQ: CRWD) advanced 3% and 2%, respectively. But perhaps the most closely watched beneficiary of today’s rotation is Palantir Technologies (NYSE: PLTR), which gained 2.5% ahead of its highly anticipated Q2 2026 earnings report, scheduled for release after the closing bell tonight.
High Stakes for Palantir Tonight
Investors are eyeing Palantir closely as it navigates this software resurgence. The company is set to report after market close today, August 3, 2026.
The critical questions for tonight’s call will center around:
Can Palantir justify its premium multiples amid broader scrutiny of AI spending?
CEO Alex Karp has heavily positioned Palantir alongside hardware giants as a key beneficiary of the AI buildout. Investors will demand concrete metrics showing enterprise adoption of its Artificial Intelligence Platform (AIP).
Palantir delivered a blockbuster Q1, boasting 85% overall year-over-year revenue growth (reaching $1.63 billion) and 133% growth in its U.S. commercial segment. They also raised their full-year 2026 revenue guidance to over $7.65 billion. Tonight’s print needs to prove that demand is translating into durable revenue and rising profits.