Gartner Stock Plunges; Palantir, Axon Surge After Earnings

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Key Takeaways

  • The S&P 500 declined 0.5% on Tuesday, Aug. 5, 2025, as a key gauge of the services sector showed a slump in July and trade talks remained in focus.
  • Gartner shares tumbled after the IT research firm missed quarterly estimates and cut its outlook, citing soft demand as businesses rein in spending.
  • Shares of Taser maker Axon Enterprise and analytics software provider Palantir Technologies surged after both companies delivered strong quarterly results driven by demand for AI tools.

Major U.S. equities indexes slipped on Tuesday after data revealed an unexpected downtick in the country’s services sector in July, while traders monitored the latest developments on tariffs.

The S&P 500 fell 0.5% on Tuesday, failing to extend its positive momentum from the trading week’s opening session. The Dow slid 0.1%, while the Nasdaq Composite was down 0.7%. 

Shares of the technology-focused research and advisory firm Gartner (IT) logged the S&P 500’s weakest performance on Tuesday, plummeting nearly 28%. Although second-quarter revenue and adjusted earnings per share topped estimates, Gartner reduced its full-year sales guidance, and its updated revenue outlook fell short of consensus expectations. The company cited soft demand within its insights segment—Gartner’s largest research unit accounting for more than half of sales—as businesses moderate spending in response to the uncertain economic environment.

Vertex Pharmaceuticals (VRTX) shares dropped 21%. Despite beating top- and bottom-line estimates with its second-quarter results, boosted by sales growth from its treatment for cystic fibrosis, the biopharmaceutical company announced it would halt development on an experimental next-generation pain treatment that failed to reach its primary endpoint in a recent Phase 2 trial.

TransDigm Group (TDG), a supplier of engineered aircraft components, missed sales and profit estimates for its fiscal third quarter. A disappointing performance from TransDigm’s commercial original equipment manufacturing segment, which the company attributed to inventory destocking and sluggish build rates, weighed on the results. TransDigm shares tumbled 12%.

Axon Enterprise (AXON) shares jumped more than 16%, rising the most of any S&P 500 stock, after the maker of the Taser and other law enforcement gear surpassed sales and profit estimates for the second quarter and lifted its full-year outlook. Strong growth in annual recurring revenue suggested that Axon is gaining momentum in its software business, and the firm has seen strong demand for its generative artificial intelligence products, including a tool that drafts an initial police report based on camera footage.

AI software giant Palantir Technologies (PLTR) also increased its 2025 outlook after topping second-quarter sales and profit estimates, highlighting strong demand for its Artificial Intelligence Platform as a key contributor to a record $1 billion in quarterly revenue. Following the strong results, analysts at Bank of America, Morgan Stanley, and Deutsche Bank raised their price targets on Palantir stock. Shares of the data analytics company surged 7.8%.

Shares Leidos Holdings (LDOS) jumped 7.5% in the wake of the aerospace and defense contractor’s quarterly earnings release. Adjusted EPS came in well ahead of expectations, while revenue edged out forecasts. Leidos noted an uptick in demand across its customer segments, with particular strength in its defense systems unit as geopolitical tensions remain elevated. Advances in the areas of AI and maritime autonomy also helped underpin the strong performance.

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