Palantir lifts full year outlook after strong second quarter beats expectations

Market Commentary

South African Market Summary

South African equities strengthened on Monday, with the JSE All Share gaining 1.06% to 112,675.43 and the Top 40 advancing 1.27% to 104,570.72. The market rise came despite weaker manufacturing sentiment, as subdued export demand and renewed US-Iran concerns weighed on confidence. The six-month business expectations index fell sharply to 49.3 from 56.6. Domestic vehicle sales remained comparatively resilient, increasing 11.9% year on year in July, although growth moderated from 15.3% in June. Separately, National Treasury and the South African Reserve Bank published draft guidelines clarifying when cross-border cryptocurrency transfers become regulated and reportable. The proposals represent another step towards integrating digital assets into South Africa’s formal financial regulatory framework.

European Market Summary

European equities began August higher as falling oil prices and renewed hopes for diplomacy in the US-Iran conflict supported risk appetite. The STOXX 600 gained 0.5% to 652.09, remaining close to Friday’s record, while London’s FTSE 100 slipped 0.1%. AstraZeneca fell 9% following reports of possible merger discussions with Bristol Myers Squibb, dragging the healthcare sector 1.7% lower. Eurozone factory output expanded at its fastest pace in nearly four-and-a-half years during July, although backlog clearance rather than stronger demand drove much of the improvement. Inflation increased to 2.9%, while European Central Bank analysis showed household consumption weakened sharply after the conflict began, highlighting the region’s sensitivity to renewed energy-price and confidence shocks.

US Market Summary

US equities opened August firmly higher as easing US-Iran tensions pushed oil prices and Treasury yields lower, supporting risk appetite. The Dow Jones Industrial Average rose 1.3% to a record 53,178.41, while the S&P 500 gained 1.5% and the Nasdaq advanced 2.1%. Communication services led the market, rising 4.3% as Meta and Alphabet strengthened, while energy declined 1.2%. Amazon gained 4.6%, lifting its market value above US$3 trillion, and SpaceX advanced 5.6% ahead of its first quarterly results as a listed company. Earnings remain supportive, with 85.2% of reporting S&P 500 companies exceeding forecasts. Attention now turns to labour-market data and the Federal Reserve’s September policy decision later this week.

Asian Market Summary

Asian equities posted cautious gains as investors followed a broader global rally, while oil remained near multiweek lows amid continued uncertainty surrounding the US-Iran conflict. South Korean inflation slowed more than expected in July, with consumer prices rising 2.8% year on year after a 3.2% increase in June. The index declined 0.2% month on month as petroleum prices fell 5.5%, although markets continued to consider the possibility of another interest-rate increase. In Australia, household spending rose 0.8% in June, exceeding expectations, as consumers increased purchases of electric vehicles amid elevated fuel costs. Job advertisements also recovered in July, indicating that labour demand remained resilient despite higher borrowing costs and tighter financial conditions.

Commodity Market Summary

Gold was little changed on Tuesday as investors weighed conflicting signals over possible US-Iran negotiations and awaited US labour-market data for guidance on the Federal Reserve’s policy outlook. Oil prices recovered modestly after Monday’s sharp decline, although uncertainty surrounding Middle Eastern supply remained elevated. Iran denied that talks with Washington were under way, contradicting US claims that diplomacy could halt further attacks and resolve disputes over the Strait of Hormuz. Shipping risks also persisted, with tanker diversions around southern Africa, slower traffic through Hormuz and a reported projectile strike near Oman. Barclays estimated crude and refined-product exports through the strait averaged 4.2 million barrels per day in the week to 31 July, highlighting the route’s continued importance.

Currency Market Summary

Currency markets remained sensitive to policy signals and geopolitical developments. The South African rand retained its gains despite a domestic manufacturing survey indicating weaker sentiment in July. Sterling ended a three-session advance against the dollar and weakened versus the yen as investors reassessed the US interest-rate outlook, although the UK government’s cautious fiscal approach continued to limit political risk concerns. The yen preserved most of its recent gains after coordinated intervention by Japan and the United States prompted traders to reduce bearish positions. Meanwhile, the dollar remained under pressure following the intervention and a decline in oil prices. Markets also monitored conflicting statements over possible US-Iran negotiations aimed at ending the five-month conflict.

Domestic Company News

Datatec Limited (DTC) +2.69%
Datatec has expanded its US cybersecurity operations through Logicalis USA’s acquisition of Loial, a New Mexico-based technology solutions provider specialising in cybersecurity and managed services. The transaction, effective from 31 July 2026, gives Logicalis a permanent presence in New Mexico and strengthens its coverage across the southwestern United States. Loial’s capabilities include modernising security operations, improving visibility across complex information-technology environments and supporting cyber resilience. Its customer base spans energy, utilities, government and healthcare, while its established relationship with Splunk broadens Logicalis USA’s technical expertise. Management said the acquisition adds experienced personnel and long-standing customer relationships while supporting the division’s longer-term growth strategy. Financial terms were not disclosed, and shareholder approval was not required.

Telkom SA SOC Limited (TKG) +2.86%
Telkom delivered a stronger first quarter as its data-led strategy supported revenue growth and improved operating leverage. Group data revenue increased 8.8% to R6.92 billion, representing 62.4% of total revenue, with mobile data up 11.4% and fibre-related data advancing 4.0%. Mobile service revenue rose 6.4%, driven by 9.1% growth in prepaid services. Openserve revenue increased 5.6%, while BCX’s IT services revenue remained broadly stable despite constrained sector conditions. Cybersecurity revenue expanded 36.6% and cloud services grew 11.8%. The Group EBITDA margin improved to 27.7%, supported by double-digit EBITDA growth. Mobile subscribers increased 6.1% to 25.3 million, while data subscribers rose 15.5% and fibre connectivity improved to 53.9%.

Stor-Age Property REIT Limited (SSS) -0.30%
Stor-Age has agreed to acquire 10 established self-storage properties from Xtraspace for R387 million, expanding its presence across Gauteng, KwaZulu-Natal and the Western Cape. The income-producing portfolio comprises 51,878m² of gross lettable area, with a further R38 million allocated for estimated capital improvements. Stor-Age will also manage six additional Xtraspace properties under an initial two-year agreement, increasing recurring fee income and extending its third-party management platform. The purchase will be funded through existing senior debt facilities, with the group expecting its loan-to-value ratio to remain within its target range. Management anticipates the transaction will be earnings-accretive per share. Completion is expected during the second half of the 2027 financial year, subject to regulatory approval.

Metair Investments Limited (MTA) -0.40%
Metair expects improved interim earnings despite subdued local vehicle production and persistent pressure from imported automotive brands. Headline earnings per share are forecast at 70–75 cents, representing growth of 7%–15%, while earnings per share should recover to 65–75 cents from a 93-cent loss. Group revenue and EBIT are expected to increase marginally, supported by cost savings and a full six-month contribution from Hesto. OEM revenue should rise 3%–6%, while aftermarket revenue is projected to grow 5%–7% as AutoZone’s turnaround progresses. The R3.3 billion South African debt package has been refinanced over five years, improving liquidity and reducing refinancing risk. However, weaker exports, aftermarket pressure and lower Hesto volumes remain operational constraints.

Global Company News

Palantir Technologies Inc. (PLTR) +2.10%
Palantir raised its annual revenue guidance after second-quarter results exceeded expectations, reflecting continued demand from US government and commercial customers. Revenue surged 93% to US$1.94 billion, above the US$1.80 billion consensus, while adjusted earnings of US$0.41 per share surpassed estimates of US$0.35. US government revenue increased 90% to US$809 million, supported by defence and geopolitical spending, while the commercial revenue outlook was lifted to more than US$3.42 billion. Palantir now expects annual revenue of US$8.15–US$8.16 billion, up from its previous range. Third-quarter guidance of US$2.16–US$2.164 billion also exceeded forecasts, although European resistance to reliance on American technology platforms remains a potential constraint.

Snap Inc. (SNAP) +7.46%
Snap exceeded second-quarter revenue expectations as stronger North American advertising activity and FIFA World Cup spending supported growth. Revenue increased 19% to US$1.60 billion, ahead of the US$1.54 billion consensus, while daily active users rose 5% to 493 million. However, users declined by almost 7% in North America and approximately 2% in Europe, highlighting continued pressure in mature markets. Management expects third-quarter revenue of US$1.70–US$1.74 billion and adjusted EBITDA of US$300–US$350 million. Improvements to direct-response advertising and AI-supported bidding, budgeting and targeting tools are gaining traction, although competition from larger platforms remains intense. Snap will provide further details on its US$2,195 Specs augmented-reality glasses on 16 September.

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