LT Weekly: Feb 06, 2026
What a week. It was pretty much all dominated by AI in one form or fashion. Panic selling on the “AI is eating software” theme hit a new level this week (the IGV software ETF is now down ~30% since late Oct) and also spilled over into other related sectors as well. AI capx going up dramatically at companies like Alphabet and Amazon was another big focus as well.
However, the massive Friday rally helped the S&P 500 to recover its losses earlier in the week and Nasdaq closed down only -1.8% (vs steeper lows earlier). On the macro side, the weaker-than-expected jobs report caught investors’ attention, but at least for S&P 500 companies that have reported, Q4 earnings growth is close to +13% y/y which is well above the +8.3% expected which is a very positive sign.
It is another earnings heavy edition, please see below for what we focused on this week:
- Earning Scorecard – Week 3
- The Claude Cowork Market Meltdown
- The Capx Overhang Returns, Though Google Shows All Signs Of Successful Execution At Least Thus Far
- Ditto For Amazon…The Massive Capx Ramp Sparks Concerns, But The Co Is Realizing Strong Returns
- Disney Sets Sail With New Leadership During A Fiscal H2 Pickup
- Fox Is Executing Well In This Cyclically Slower Year
- WMG Is Hitting The Right Notes On Margins And AI Partnerships
- AI Concerns Overshadow Take-Two’s Strong Beat & Raise Qtr
- Snap Navigates A Self-Inflicted DAU Dip…While Still Aimed At Its Long-Term Goals
- Uber Keeps Driving While Building For An Eventual Driverless Future
- Other Quick Earnings Takes: Reddit & Roblox
**Also, LAST CALL if you would like to participate in LionTree’s 8th Annual TMT Sector Themes Survey. It consists of 25 simple questions about the market, sector developments, and company outlooks and takes less than 10 minutes. We are closing the survey at the end of the weekend and will send results only to those that participate! CLICK HERE for the survey**
Enjoy the weekend and rest up before the next wave of earnings reports next week, with Spotify kicking things off Tuesday morning.
Best,
Leslie
Earning Scorecard – Week 3
Week 3 of earnings has come to a close. In total, 36 stocks in our LionTree Universe reported (though it felt like more!). Stock reactions were skewed negative this week with 26 stocks trading down and only 10 trading up. The best performer in reaction to earnings was Roblox, which was up +10.3% (see Theme #11), while the worst performer was Peloton, which fell -25.7%.
It was a tough week for Big Tech with Amazon down -5.6% in reaction to results (see Theme #4) though Alphabet’s shares closed almost flat after being down as much as -8% intra-day (see Theme #3), Elsewhere in digital media, Snap closed down -13.4% following results (see Theme 9), while Reddit fell -7.4% (see Theme #11)
Media conglomerates were under pressure with Disney and Fox shares down -7.4% and -3.6%, respectively (see Themes #5 and #6) and in music, WMG shares rallied +3.6% (see Theme #7).
In Last-Mile Transportation Uber fell -5.1% in reaction (see Theme #10), Lastly, gaming stock Take-Two (see Theme #8) dropped -5.4% post earnings.