In a dynamic day for the markets, several major companies made headlines with significant earnings reports, strategic moves, and stock upgrades.
Dell Technologies has reported an impressive quarter, primarily driven by its investments in artificial intelligence, resulting in a 12% surge in its stock. The company anticipates a substantial increase in AI server revenue, estimating it could double to approximately $50 billion in the upcoming fiscal year. Additionally, Dell managed to counterbalance high memory costs through price increases and announced a $10 billion boost to its stock buyback program.
Meanwhile, CoreWeave is heavily investing in data center construction, leading to a decline in its shares. However, nearly all of its new capacity planned for 2026 is reportedly allocated, explaining its optimistic full-year capital expenditure guidance of $30 billion to $35 billion—significantly higher than analysts’ expectations of $26.9 billion. Strong pricing for older Nvidia chips may ease concerns over depreciation.
In the fintech sector, Jack Dorsey’s Block has taken the dramatic step of cutting 40% of its workforce, citing that advancements in intelligence tools have altered the landscape for running a company. The parent of Cash App and Afterpay reported flat revenues for 2025, prompting Morgan Stanley to upgrade the stock from hold to buy, as they foresee an expanding market opportunity.
Retail analysis also saw action as Bank of America reinstated a buy rating for Costco, emphasizing the importance of identifying the key beneficiaries of AI in the market. This topic will be further explored in their February Monthly Meeting.
In the cybersecurity domain, Zscaler exceeded expectations but still faced an 11% drop in shares, raising questions about the current market’s willingness to pay a premium for software stocks, especially when earnings multiples are approaching historical highs.
Public sentiment in the retail space shifted as Citi downgraded Dollar Tree from buy to hold, citing a balanced risk/reward profile following a significant rise in shares over the past year. This decision raises eyebrows in light of the economic climate, where discount retailers like Dollar Tree, Dollar General, and Five Below typically thrive.
Honeywell also received a boost, with Wolfe Research upgrading its rating to buy, driven by anticipation of positive developments surrounding its aerospace spinoff. Analysts underscore that the company has successfully navigated substantial structural changes within its portfolio.
On the consumer goods front, Barclays raised J.M. Smucker’s price target in response to increased oversight following the appointment of new directors by activist investor Elliott. This move echoes the revitalization seen with Hershey in past years, leaving analysts hopeful for Smucker’s potential turnaround.
In contrast, CrowdStrike’s price target was trimmed by Jefferies, from $600 to $500, although the firm maintains a buy rating, expecting the company to deliver a favorable report on annual recurring revenue growth in the upcoming quarter.
Lastly, Flutter, the parent company of FanDuel, reported disappointing quarterly results and provided cautious guidance for 2026 amidst troubling customer trends. Executives noted a reduction in engagement from high-loss bettors, although they asserted that prediction markets are not adversely affecting their core business.
As notable shifts and trends unfold across various sectors, investors are advised to stay informed and approach decisions with careful consideration.
