February 26th Market Overview

Happy Thursday

Nvidia gapped us up overnight on a monster quarter and the whole thing faded by lunch. Sell the news, plain and simple.There was some rotation though, software names rallied while chip stocks got dumped. That's a new wrinkle worth paying attention to.

Let’s dig in...

Today's Big Picture

1. Nvidia Beat Everything and It Didn't Matter 

Nvidia $NVDA posted $68.1 billion in revenue, $43 billion in net income, and guided next quarter to $78 billion. All above estimates. The stock still fell. Wall Street now treats record quarters from this company as background noise. I think the real concern has shifted from "are these numbers good" to "is all this AI spending sustainable."

2. Software Rotation Is On Salesforce 
$CRM beat expectations and Benioff called the selloff "not our first SaaS-pocalypse." Meanwhile chip names like Broadcom $AVGO and Lam Research $LRCX got hit hard. The software ETF $IGV is still in bear market territory, but today's rotation out of hardware tells me the AI-panic selloff in software went too far.

3. Paramount Is Trying to Box Out Netflix Paramount Skydance 

$PSKY posted strong earnings and revised its bid for Warner Bros. Discovery $WBD to thirty-one dollars a share. Prediction markets have the deal at roughly even odds. Netflix $NFLX rose too, and Benchmark thinks some investors actually want Netflix to lose this one. I expect this to get messy before it gets resolved.

Market Overview

Index Performance

Stock Spotlight

Celsius Holdings $CELH ( ▲ 6.98% )  
crushed it. Revenue more than doubled year-over-year to $721.6 million, well above the $639 million estimate. North America drove almost all of it.

Zoom Communications $ZM ( ▼ 12.65% )  
missed on earnings and offered weak guidance. The pandemic darling still can't find a second act.

Penn Entertainment $PENN ( ▲ 16.83% )  
delivered stronger-than-expected revenue of $1.81 billion. The stock had its best day in months.

J.M. Smucker $SJM ( ▲ 8.72% )  
beat estimates and added two board members from Elliott Investment Management. Activist pressure is working.

American Bitcoin $ABTC ( ▲ 2.38% )  
swung to a $59 million net loss last quarter. Co-founder Eric Trump says they're hunting for acquisitions. Bitcoin is down roughly half from its October peak above $126,000.

Big Name Updates

Apple $AAPL ( ▼ 0.54% )  
is in talks with major Indian banks and card networks to launch Apple Pay in India by mid-2026. That's a 750 million-plus smartphone market where Apple's share is now around ten points.

Amazon $AMZN ( ▼ 1.29% )  
may expand its $38 billion cloud deal with OpenAI according to The Information. The talks include using Amazon's custom Trainium chips.

Alphabet $GOOGL ( ▼ 1.79% )  
is pulling its Intrinsic robotics unit back inside the company after five years as a separate bet. The plan is to pair physical robots with Gemini and DeepMind.

Eli Lilly $LLY ( ▼ 0.99% )  
published head-to-head trial results showing its oral GLP-1 pill orforglipron beat oral semaglutide. Patients lost 19.7 lbs versus 11 lbs over 52 weeks.

Other Notable Company News

Accenture $ACN ( ▲ 8.15% )  
signed a multi-year deal with Mistral AI to offer European clients a local alternative to American models. Stock had its best day since April 2025, though shares are still down sharply this year.

Baidu $BIDU ( ▼ 5.78% )  
posted declining revenue for a third straight quarter.

Stellantis $STLA ( ▲ 4.28% )  
recorded its first-ever annual loss. They misjudged EV demand and took massive write-downs.

Starbucks $SBUX ( ▲ 0.13% )  
says cold drinks now make up two-thirds of all U.S. orders, up from about a third in 2013. The hot coffee era is fading.

Nutanix $NTNX ( ▲ 3.82% )  
partnered with AMD $AMD in a $250 million venture to build AI infrastructure.

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Sector Watch

Bond Market

Mortgage rates slipped below six for the first time since 2022. That psychological level matters with spring buying season right around the corner.

Treasury yields drifted lower on the day. Jobless claims came in at 212,000, under the 215,000 estimate. Continuing claims fell by 31,000 — labor market is still holding.

• January producer-price index drops tomorrow at 8:30 AM. Last major inflation read before the next Fed meeting.

Policy Watch

Fed

Atlanta Fed President Bostic used his farewell message before retirement to warn about White House interference with central bank independence. Vice Chair Bowman testified before the Senate Banking Committee today.

Government Shutdown

The partial Homeland Security closure continues. Worth watching if it starts hitting federal contracts next week.

Fiscal & Trade

The Supreme Court struck down Trump's emergency tariffs last Friday. He replaced them with a new tariff under Section 122 on Tuesday and threatened to raise it further.

• At least 1,800 companies have filed lawsuits seeking refunds — FedEx $FDX, Costco $COST, and Goodyear $GT among them. One federal litigator compared it to asbestos-level litigation.

• The Pentagon asked Boeing $BA and Lockheed Martin $LMT to assess their reliance on Anthropic's Claude AI. Could be a first step toward labeling Anthropic a supply chain risk.

International

• U.S. envoys Witkoff and Kushner are meeting Iranian officials in Geneva on the nuclear program.

• Rare earth shortages of yttrium and scandium are worsening for U.S. aerospace and chipmakers. Both mostly sourced from China.

What to Watch

Dell and CoreWeave Earnings 
Both report after the close today. Dell is a direct read on corporate server spending. Evercore named it a key beneficiary of Nvidia's sovereign business.

Inflation Data 
January PPI drops Friday at 8:30 AM. With the 10-year sitting at four, any surprise moves bonds.

Berkshire Hathaway Letter 
Greg Abel publishes his first annual shareholder letter Saturday alongside quarterly results. I want to see if he shifts capital allocation now that Buffett has stepped back.

The Software Trade
IGV bounced today while chip stocks sold off. Citadel data shows software engineer postings are up about eleven points year-over-year, cutting against the AI job displacement narrative. If this rotation has legs, beaten-down software could be the trade of the quarter.

Thanks for reading - you are now the more informed 🙂

- John

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