CNBC Fast Money
2026-11-03 · Hosted by Melissa Lee · CNBC
Executive Summary
Apple's first earnings report under new CEO John Ternus initially traded flat before guidance details pushed shares down roughly 3-4% after hours. The company beat on revenue and EPS, with record Mac sales (up 24% year over year) and iPhone revenue beating estimates, but gross margin guidance for the December quarter came in at 45-46%, below the 46.3% street estimate, due to higher memory costs and expenses tied to ramping Siri AI. Services growth of 8-9% year-over-year guidance would mark its slowest expansion since 2022.
Key Stories & Changes
1. Apple Guidance Disappoints Despite Revenue Beat
AAPL: Apple — -3% to -4% after hours — Revenue and EPS beat, but light gross margin guidance drove the selloff
EPS: $2.10 vs. $1.99 street consensus; gross margin 47.9% vs. 47.5% estimate
December-quarter revenue guidance: 7-10% year-over-year growth vs. 6.1% street estimate — a beat, and would be Apple's best revenue quarter ever (prior December quarter was $144 billion)
December-quarter gross margin guidance: 45-46%, versus a 46.3% street estimate — the key driver of the aftermarket selloff
Services revenue guidance: 8-9% year-over-year growth; September quarter Services growth was under 10%, the slowest rate of expansion since 2022
Mac revenue: up 24% year over year versus a street estimate of 15%; Mac had a 22% price increase and Gene Munster expects 15-20% Mac growth next year versus a 6% street estimate
iPad revenue: down 10% versus a flat street estimate, also impacted by a 20% price increase
CEO John Ternus told CNBC the memory situation is "absolutely unprecedented," and Apple has already raised prices on Mac, iPad, and iPhone to offset costs
Two separate analyst questions about personalized AI agents on the earnings call were both deflected by Ternus with ambiguous comments about "platform and privacy and security"
2. Palantir Shares Fall Despite Accelerating Government Growth
Shares fell about 3% after hours, though still up roughly 45% over the past three months
CEO Alex Carp cited rising adoption of open-weight AI models benefiting Palantir's commercial sales, which jumped 148% year over year in Q3
The jump in Palantir's revenue coincided with Anthropic reporting a deceleration in its own third-quarter revenue growth
City analysts flagged commercial remaining deal value (future contracted revenue) as "a little light"
CFO David Glazer downplayed prospects of a buyback, dividend, or stock split
3. Oil's Sharp Drop and Technical Damage in Tech
Oil fell roughly 8%, its worst day since late July; Brent briefly dropped below its 50-day moving average for the first time since August 1
Semiconductors (SMH) closed decisively below their 200-day moving average, something panelists said has only happened a few times historically (September 2024, Liberation Day)
The Nasdaq led losses, down more than 1%, even as the Dow closed near session lows after gaining 213 points intraday
Panelists debated whether the oil drop was a "head fake" given its timing just ahead of the midterm elections, noting the muted follow-through in the VIX despite the scale of the oil move
4. Data Center Moratorium Risk Smaller Than Headlines Suggest
William Blair's Tim Mulroney said only about 7-9% of planned AI data center capacity (by gigawatt) is in states where a gubernatorial candidate supports a moratorium, versus a sense from political rhetoric that the risk is far larger
Of 36 gubernatorial elections this cycle, 22 states have at least one candidate supporting a pause, but the actual at-risk capacity is concentrated in just eight states
For companies like comfort systems and other data-center "MEP contractors," work underway today was permitted two to three years ago, so near-term revenue impact from new moratoriums would be minimal; effects would mainly surface in 2029-2030
Local permitting and "guardrails" (rate-payer protections, environmental rules) are more common than full moratoriums at the municipal level
5. Midterm Market Scenarios and a Potential Fourth-Quarter Rally
Evercore ISI's Julian Emanuel said active managers have been "de-risking," pointing to elevated VIX (21) despite minimal index movement, and energy/infotech being the only outperforming sectors this year while consumer discretionary remains the most heavily shorted
Emanuel's base case still calls for a fourth-quarter rally, supported by cheap Nasdaq-to-S&P relative valuations, but flagged a disputed-election scenario and potential Iran escalation as risks that could send markets down 5-10%
He warned that if AI CapEx pulls back, the knock-on effect to GDP growth (given AI's outsized contribution) could slow the broader economy more than markets are comfortable with
Trends Identified
1. Apple's Valuation Debate Intensifies Around Margin Pressure
Apple bulls point to its superior free cash flow (cash generated after operating and capital expenses) and defensive positioning versus cash-burning AI hyperscalers, while bears argue the stock's premium multiple leaves no room for the gross-margin erosion now showing up in guidance. The panel's inability to agree — even after seeing the same numbers — reflects a broader market tension between valuation discipline and safe-haven demand for non-AI-spending mega-caps.
2. Memory Cost Inflation Is Becoming a Sector-Wide Margin Risk
Apple's guidance explicitly cited elevated memory costs as a margin headwind, consistent with warnings flagged elsewhere in the panel about memory suppliers signaling tight capacity for an extended period. This dynamic threatens to compress hardware margins broadly, not just at Apple, as component costs rise faster than companies can pass them through via price increases.
3. Open-Source AI Models Reshaping Competitive Economics
Palantir's commercial acceleration alongside Anthropic's revenue deceleration illustrates a bifurcation: companies integrating diverse AI models (including cheaper open-weight alternatives) are outperforming "frontier lab" pure plays facing pricing pressure. This connects to the broader CapEx debate, as cheaper open models could reduce the compute spending need that underpins the AI infrastructure trade.
4. Technical and Fundamental Signals Diverge on Tech
Despite a seemingly favorable seasonal setup (November historically strong, midterms as a "clearing event"), semiconductors' break below the 200-day moving average suggests real technical damage that fundamentals alone haven't offset. Panelists flagged this divergence as a reason for caution despite bullish calendar-based arguments.
5. Political Rhetoric Overstates Data-Center Policy Risk
The gap between data-center moratorium headlines (covering 61% of gubernatorial races) and the actual capacity at risk (7-9%) shows how election-cycle political rhetoric can create outsized perceived risk relative to fundamental business impact, particularly given multi-year permitting lead times that insulate near-term revenue. ---
Sentiment Analysis
Overall Market Sentiment: Skeptical, Risk-Aware
The panel displayed persistent skepticism toward both Apple's valuation and the broader AI trade's technical health, tempered by seasonal optimism and a view that political risks are overstated relative to headlines.
Risk Factors Highlighted
Apple gross margin guidance miss: December-quarter guidance of 45-46% versus a 46.3% street estimate signals ongoing memory-cost and Siri AI ramp pressure.
Services deceleration to slowest growth since 2022: Raises questions about whether Apple's high-margin Services engine faces structural headwinds.
Memory price inflation across the hardware sector: Suppliers reportedly signaling tight capacity for an extended multi-year period.
Semiconductor technical breakdown: A close decisively below the 200-day moving average suggests deteriorating momentum beyond just sentiment.
Disputed midterm election outcome: Flagged by Julian Emanuel as a scenario that could send markets down 5-10%.
AI CapEx-driven GDP slowdown risk: A pullback in AI infrastructure spending could have an outsized negative effect on overall economic growth given its current share of GDP.
Open-source AI pricing pressure: Threatens frontier AI labs' revenue growth and margin structure, as evidenced by Anthropic's deceleration.
Marvell-Lumentum deal structure risk: An all-stock $115 billion deal not closing until 2028 introduces multi-year execution and political risk, pressuring both stocks.
This episode was covered in today's [The Market Signal — 2026-11-03](https://marketsignal.beehiiv.com/p/the-market-signal-2026-11-03), a cross-source synthesis of multiple podcast reports.