📊 Google’s Spending Shock

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Happy Monday!

Software is facing an apocalypse. And this past week, Anthropic accelerated those fears.

• Last Monday, the company released an AI automation tool capable of handling tasks like contract review and legal briefings, triggering sharp selloffs across legal and workflow software names like Experian, Thomson Reuters, and LegalZoom.

• The impact quickly spread, pulling down broader software stocks as investors reassessed where AI could sit in the stack.

Then on Thursday, Anthropic upgraded Claude Opus 4.6, its most advanced model.

• The new release significantly improves autonomous work, including coding, analysis, financial research, and document creation.

• That added pressure to financial data and research providers like FactSet and S&P Global.

The selloff has been lucrative for bears, with short sellers booking roughly $24B in profits so far this year.

Key Data Bites Over The Last Week:

• Morningstar updated its list of the 10 most undervalued stocks.

• Walmart reached a $1T market cap for first time.

• U.S. will cut tariffs on India from 25% to 18% in new trade deal.

• Trump will launch $12B critical mineral stockpile.

• Waymo is looking to raise $16B near $110B valuation.

• SpaceX has combined with xAI at $1.25T valuation.

• Oracle plans to raise up to $50B for its Cloud business.

• 4 companies plan to spend $650B this year in AI CapEx.

• Adobe boosted ad spending to $1.4B to push back on AI fear.

• U.S. companies announced most January job cuts in 17 years.

• Texas Instruments to acquire Silicon Laboratories for $7.5B.

• PepsiCo plans up to 15% price cuts on major snacks.

• Novo Nordisk expects 2026 sales and op. profit to decline up to 13%.

In today’s newsletter:

• 🚀 Palantir Has Been Unstoppable

• 🐭 Disney’s Lost Decade

• 📈 AMD Crosses $10B

• 🚨 Google’s Spending Shock

• 👟 Amazon Overtakes Walmart

Let’s jump right in.

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Palantir’s flywheel is spinning.

After years of heavy investment, the financials are flipping fast.

• In Q4, Palantir delivered $0.25 EPS versus $0.23 expected on $1.41B in revenue, beating estimates.

• Revenue surged 70%, while net income skyrocketed 670%.

The biggest shift is in profitability.

• Operating profit has swung from deep losses between 2020 and 2023 to over $1.4B in the most recent quarter, as scale finally met demand.

• U.S. government revenue grew 66%, driven by large defense contracts, including a $10B U.S. Army deal.

• U.S. commercial revenue more than doubled, with remaining deal value up 145% to $4.38B.

Looking ahead, Palantir now expects $7.19B in 2026 revenue at the midpoint, well above the $6.22B consensus estimate.

Disney has been dead money for a decade.

• A $10,000 investment ten years ago would be worth just $12,013 today, even after dividends and stock splits.

• A shrinking linear TV business, years of unprofitable streaming investments, leadership churn, and pandemic fallout have all weighed on performance.

In the most recent quarter, Disney modestly beat expectations, posting $1.63 in adjusted earnings on $25.98B in revenue.

• Theme parks were the bright spot, with the Experiences division surpassing $10B in quarterly revenue for the first time.

Shares initially dipped after Disney failed to name a new CEO during its earnings release.

• The next day, the company announced Josh D’Amaro, a 28-year Disney veteran, will succeed Bob Iger as CEO in March 2026.

Lisa Su delivered another big win for AMD.

The company crossed $10B in quarterly revenue for the first time ever.

Despite that milestone, shares fell nearly 20% the following day.

The reason came down to expectations.

• AMD reported Q4 revenue of $10.27B, beating the $9.67B estimate, and guided the current quarter to $9.8B, above the $9.38B consensus.

While the guidance beat estimates, it fell short of the far higher expectations priced into the stock after shares had more than doubled.

• Some investors focused on a sequential revenue slowdown, even though growth remains strong, as massive industrywide CapEx spending had led to hopes of uninterrupted, exponential growth.

• The beat was also narrower than expected after AMD included Chinese revenue that some analysts had not modeled.

Even after the selloff, shares are still up nearly 90% over the past year.

Meta’s AI spending raised eyebrows. Alphabet’s raised the ceiling.

After Meta guided 2026 CapEx to roughly $125B, well above the $110B consensus, Alphabet went even further.

• The company expects roughly $180B in capital spending in 2026, nearly double last year and far above the $115B analysts were estimating.

Shares initially sold off, but losses were largely pared by the end of the week.

The reason was execution.

• Alphabet delivered record annual revenue, crossing $400B for the first time.

• Google Cloud revenue surged 48% YoY to $17.7B, while backlog doubled to $240B.

Those results reinforced investor confidence that AI demand is already translating into real revenue.

• Alphabet is showing rapid cloud growth alongside rising backlog, accelerating search growth, and expanding enterprise adoption of Gemini, making the heavy spend easier for the market to digest.

Amazon just crossed a historic milestone.

For the first time, Amazon now generates more annual revenue than Walmart, the company that defined global retail dominance for decades.

• Since 2005, Amazon’s revenue has compounded at roughly 25% per year.

• Walmart’s revenue has grown just over 4% annually over the same period.

That gap explains the crossover.

Amazon is also leaning into the future.

Management plans to spend $200B in CapEx in 2026, well above the $147B Wall Street consensus, targeting AI infrastructure, chips, and robotics.

In Q4, revenue reached $213.4B, beating expectations.

• AWS revenue jumped 24% YoY to $35.6B, its fastest growth in 13 quarters.

• Advertising revenue climbed 23% to $21.3B.

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Notable Companies Reporting Earnings Week of February 8, 2026:

Buys

• Cleo Fields (D)

  • Company: Alphabet Inc. ($GOOGL)

    • Amount Purchased: $101K - $265K

  • Company: Netflix ($NFLX)

    • Amount Purchased: $50K - $100K

  • Company: Meta Platforms ($META)

    • Amount Purchased: $50K - $100K

  • Company: Iren ($IREN)

    • Amount Purchased: $50K - $100K

Sells

• Sheldon Whitehouse (D)

  • Company: McDonald’s ($MCD)

    • Amount Sold: $15K - $50K

Buys

• Veradermics Inc ($MANE)

  • Insider: Patrick Enright (Director)

    • # of Shares Purchased: 1,075,000

    • $ Amount: $18,275,000

    • SEC Forms: [1]

Sells

• Netflix ($NFLX)

  • Insider: Reed Hastings (Director)

    • # of Shares Sold: 390,970

    • $ Amount: $32,695,591

    • SEC Forms: [1]

• Nasdaq Inc ($NDAQ)

  • Insider: Adena Friedman (Chair & CEO)

    • # of Shares Sold: 300,000

    • $ Amount: $29,073,000

    • SEC Forms: [1]