Hey everyone, Hirokichi here. For this week’s stock picks, I’m looking at one Japanese company and one U.S. company that both grabbed the market’s attention with their earnings this week: Mitsubishi Heavy Industries (7011), which reported on August 4, and Palantir Technologies (PLTR), whose stock jumped after its August 3 (U.S. time) earnings release.
Mitsubishi Heavy Industries (7011): A Fourth Straight Record Profit, Led by Defense and Space
Mitsubishi Heavy Industries started out as a shipbuilder and has grown into one of Japan’s leading heavy industry conglomerates, spanning gas turbine power equipment, aircraft parts, defense equipment, and space-related businesses. On August 4, 2026, the company reported results for the first quarter of fiscal year 2027 (April to June 2026).
Net profit came in at 134.6 billion yen, up 97% year-over-year, marking a record high for the April-June quarter for the fourth consecutive year. The main driver was the gas turbine power equipment business, where orders also grew about 30% year-over-year. The company’s other pillar, the Aircraft, Defense & Space segment, also posted higher revenue and profit, supported by a growing backlog of defense orders (according to reporting from Nikkei and Kabutan).
For the prior fiscal year (ended March 2026), full-year results were similarly strong: revenue of 4.9741 trillion yen (up 14.1%) and business profit of 432.2 billion yen (up 21.8%), with the order backlog swelling to 6.7 trillion yen. For the current fiscal year (ending March 2027), the company is guiding for another record in both revenue and profit.
The stock reversed course and rose in the afternoon session on earnings day, closing up more than 8% at around the ¥4,100 level.
Mitsubishi Heavy: The Good and the Cautionary Points
On the positive side, Japan’s push to increase defense spending, combined with heightened geopolitical risk, has kept the order backlog for the defense and space segment at a high level. The gas turbine business is also getting a tailwind from rising electricity demand tied to data centers. The company’s track record of posting record profits quarter after quarter is reassuring as well.
That said, there are things to watch. The stock has risen sharply over the past few years, and some in the market view the valuation as already pricing in a lot of good news. Defense and infrastructure projects also tend to have long lead times between order and revenue recognition, which makes results sensitive to currency swings and raw material costs. Short-term price moves often hinge less on the results themselves and more on whether they beat elevated expectations, so I’d be cautious about chasing the stock right after a rally.
Palantir Technologies (PLTR): Stock Jumps More Than 12% on Earnings
Palantir is a U.S. data analytics and AI software company. It built its early reputation on systems for government and defense agencies, but in recent years it has also seen rapid growth in AI demand from commercial (private-sector) customers.
For its second quarter of 2026, reported on August 3, 2026 (U.S. time), Palantir posted EPS (earnings per share) of $0.41, beating the analyst estimate of $0.35, and revenue of $1.94 billion versus an estimate of $1.81 billion. Revenue grew 92.8% year-over-year, and U.S. commercial revenue in particular surged 149% year-over-year to $764 million.
Profitability was strong too: GAAP operating income came in at $912 million (a 47% margin), and adjusted operating income reached $1.19 billion (a 62% margin). The company raised its full-year 2026 revenue guidance to $8.15-8.16 billion (up 82% year-over-year). On the news, the stock jumped as much as 10-12% in after-hours trading, approaching the $140 level (based on reporting from CNBC, TIKR, and FXLeaders).
Palantir: The Good and the Cautionary Points
The standout positive here is the sheer pace of growth. Sustaining revenue growth above 90% while also improving margins is a rare combination of growth and profitability, even among AI-related names. Palantir’s steady government business, paired with rapidly expanding commercial revenue, is also reducing its reliance on any single customer segment.
The cautionary point is valuation. Market estimates put Palantir’s trailing P/E (price-to-earnings ratio) above 100, a level that leaves little room for error if growth slows or AI-related enthusiasm cools. In fact, the stock had already fallen roughly 30% at one point earlier in 2026 before this earnings report. Several analysts have also flagged risks around dependence on government contracts, rising competition, and shareholder dilution from stock-based compensation. I’d expect the stock to keep swinging around quite a bit.
What to Watch Going Forward
These two companies are in completely different industries and countries, but they share one thing in common this week: their earnings reports moved the market’s view of them significantly. Here’s what I’ll be watching next: (1) whether Mitsubishi Heavy’s two tailwinds — rising defense budgets and data-center-driven power demand — continue; (2) whether Palantir can sustain this pace of commercial revenue growth, since the next earnings report’s “results versus expectations” will likely move the stock again; and (3) for both stocks, since a lot of good news already seems priced in, I’d watch for a pullback once the immediate catalyst fades.
As I’ve mentioned in other posts here, individual stocks tend to be more volatile, so it’s worth thinking about how much of your overall portfolio you want in single names like these.
Let’s keep at it, slow and steady. See you next time!
日本語版はこちら → https://hirokichiiii.com/投資のいろは/weekly-stock-picks-mhi-pltr-2026-08-04/
* This article is for informational purposes only and does not recommend any specific investment. It is not a recommendation to buy or sell any individual stock. Please make investment decisions at your own responsibility.
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