Is AI money rotating out of chips and into software? Tonight the market puts it to the test.
The S&P 500 hit a fresh record on August 4, but the Nasdaq lagged under pressure from semiconductors. Tonight's US session comes down to one big question in the AI trade.
Advanced Micro Devices (AMD) sold off nearly 9% after the bell last night despite posting record revenue. A day earlier, Palantir (PLTR) soared around 26%. Those two opposite reactions frame the debate: is AI capital rotating out of chip names and into software?
Tonight's session tests whether that rotation holds, with Nvidia (NVDA) as the key barometer.
Tonight's Watchlist
| Stock | Movement | What to Watch |
|---|
| AMD | -8.9% (after-hours, Aug 4) | Double beat (EPS $1.66; revenue $11.54B, data center more than doubled to $6.7B), but gross margin of 54% missed the 56% consensus and the Helios AI outlook read as too soft. |
| PLTR | +26% (Aug 4) | Blowout: revenue +93% YoY, US commercial +149% YoY, full-year guidance raised. The face of "AI software wins". |
| NVDA | Watch (barometer) | Not reporting tonight, but the tell for direction. It trades on AI-chip sentiment in the wake of AMD. |
Tonight's Catalysts
AMD sold off despite a record quarter
Advanced Micro Devices (AMD) reported record revenue of $11.54 billion and earnings of $1.66 per share, both above expectations. Yet the stock still sold off as gross margin slipped to 54% on Helios AI ramp costs, and the market wanted a more aggressive forecast. The bar for AI-chip names is now so high that a beat alone is not enough.
Palantir is the face of the rotation into software
Palantir (PLTR) jumped around 26% on August 4 after revenue grew 93% YoY and US commercial revenue rose 149%. That reaction contrasts sharply with AMD and fuels the debate over whether investors now reward AI monetization at the software layer over chip infrastructure spend.
Nvidia is the direction-setter
Nvidia (NVDA) is not reporting tonight, but it is the most important barometer. If NVDA slides with AMD, the "rotation out of chips" narrative strengthens. If it holds, the pressure may be specific to AMD's execution rather than the chip theme as a whole.
Pre-Market Pulse 📊
Futures are digesting AMD's reaction. Semiconductors carry most of the weight into the open, while the AI-software theme stays a counterweight after Palantir's surge. Specific pre-market figures will be refreshed closer to publish as the US pre-market session opens.
Macro Note 📝
ADP employment data and the ISM Services PMI are due tonight. Both add fuel to expectations for the Fed's rate path, which is helping steer risk appetite across equities.
Conclusion
Tonight is less about a single stock and more about where AI capital is flowing. The opposite reactions from AMD and Palantir put the chip-versus-software duel in the spotlight, and Nvidia's move will give the clearest signal on whether market leadership is shifting.
For anyone tracking the AI theme, this is the moment to separate a structural shift from a short-term correction. Rotations like this often open opportunities in names that get mispriced while sentiment runs hot.
What AI stocks are you watching tonight?
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