| Together with CreditSights | | The Week Ahead Of Us 🔍 | Welcome back! | Hope you got some time to take a break from the market. We got a decent software rebound before a bit of sell-off scare in the late afternoon - right now futures are up slightly as we look to see if the AI pummeling trade will cool off this week. | Regardless, the shift towards agentic deployment is clearly just getting started. The big news on my radar this weekend has been OpenAI hiring OpenClaw's founder. This is obviously a massive coup for OpenAI, with the Founder joining to "drive the next generation of personal agents". Also, US and Iran nuclear and energy talks are set to resume tomorrow. | Let's get into it. We put out our Part I piece on the software industry last week, WSR IC members can access it here. | Here's a look at earnings this week. | Tuesday: Palo Alto Networks, Constellation Energy, Toll Brothers, Sunoco Wednesday: DoorDash, Coca Cola, Equinox, Wyndham Hotels & Resorts, Jack In The Box, Carvana, Booking Holdings, Garmin, Wingstop, Analog Devices, Moody's, Occidental Petroleum Thursday: Walmart, Live Nation, Deere & Company, Klarna, Texas Roadhouse, Celsius, Wayfair, YETI, Six Flags, Etsy, Cheese Cake Factory, Opendoor, Savers
| Here's a look at economic data this week (estimates are in quotations). | Tuesday: Empire State manufacturing survey (10.0), Home builder confidence index (38) Wednesday: Housing starts Nov. (1.30M), Housing starts Dec. (1.30M), Building permits Nov., Building permits Dec. (1.40M), Durable-goods orders (-2.3%), Durable-goods minus transportation, Industrial production (0.3%), Capacity utilization (76.5%), Minutes of Fed's January FOMC meeting Thursday: Initial jobless claims (220,000), U.S. trade deficit (-$56.0B), Philadelphia Fed manufacturing survey, Advanced U.S. trade balance in goods, Advanced retail inventories, Advanced wholesale inventories, Leading economic index (-0.1%) Friday: GDP (2.5%), Personal income (0.3%), Personal spending (0.4%), PCE index (0.3%), PCE y/y (2.8%), Core PCE index (0.3%), Core PCE y/y (2.9%), S&P flash U.S. services PMI, S&P flash U.S. manufacturing PMI, New home sales Nov. (730,000), New home sales Dec. (735,000), Consumer sentiment (57.1)
| | Datacenters: How We're Tracking the Overbuild | AI demand is rising, but utility commitments are scaling even faster. CreditSights' Datacenter Overbuild report gives you a clear view of how firm grid connections already exceed many 2030 demand forecasts and what that means for utilities, power exposure, and credit risk. | | Get independent research that helps you understand: | • How utilities' datacenter power commitments line up with 2030 and 2035 demand forecasts
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• How oversupply risk could shape credit views as 2026 unfolds | Access the full report and track the overbuild with confidence. | | | Earnings Corner 💸 | $ABNB ( ▲ 4.65% ) Beat on revenue at $2.78B but missed EPS at $0.56 vs. $0.66 as higher investment spending and roughly $90M in non-tax charges weighed on profits. Demand remained solid with nights and experiences +10% and gross booking value +16%, reflecting healthy travel demand. Guidance came in above expectations, signaling accelerating growth into 2026 and helping shares rise. $EXPE ( ▼ 6.41% ) Top and bottom line beat, with revenue up 11% to $3.55B, driven by 24% growth in B2B bookings and continued lodging momentum, which supported margin expansion. Shares fell as guidance came in flat, flagging macro uncertainty and softer trends in parts of Asia kept shares under pressure. $DKNG ( ▼ 13.51% ) Beat on revenue but missed on EPS at $0.36 vs. $0.41 as heavier promotional spend and investment in sportsbook and prediction markets competition weighed on margins. 2026 revenue guidance came in extremely light at $6.7B vs. est. of $7.3B. Shares sold off as growth expectations reset. $MORN ( ▲ 3.91% ) Beat on revenue and delivered a EPS meaningful beat at $2.71 vs. $2.34. Strength was driven by solid subscription growth across Morningstar Credit, Direct, and PitchBook, with adjusted margins expanding as cost discipline offset slower growth elsewhere. However, operating profit declined to restructuring charges and heavier AI and product investment, as well as AI-related headwinds, pushed shares down slightly. $PINS ( ▼ 16.83% ) Missed on revenue and EPS as tariff pressure led large retail advertisers to pull back on spend. MAUs hit a record 619M up 12%, driven by strong Gen Z and international growth, but those users monetize at lower rates, pressuring ARPU, which fell as ad pricing dropped 19%. Guidance of $951M–$971M came in well below the $980M expected, signaling retail weakness and near term disruption from its AI led restructuring, pushing shares down sharply. $RIVN ( ▲ 26.64% ) Beat on revenue and post a smaller than expected loss on EPS as high margin software revenue from its Volkswagen JV helped drive its first annual gross profit. Management guided 62K–67K deliveries for 2026, up nearly 50%, as it prepares to launch the lower priced R2. Losses will remain heavy during production, but improving unit economics and growing software revenue signaled a potential turn around, sending shares sharply higher.
| On The Move 📈 📉 | Coinbase $COIN ( ▲ 16.47% ) recovered after solid earnings. Other crypto-related names such as $MSTR ( ▲ 8.85% ) $XXI ( ▲ 10.35% ) and $MARA ( ▲ 9.24% ) caught a bid Nebius $NBIS ( ▲ 9.23% ) rose after strong Q4 results and aggressive growth guidance tied to AI cloud infrastructure demand, with many large partnerships already secured. Constellation Brands $STZ ( ▼ 8.04% ) is down following the announcement of a new CEO. Unity Software $U ( ▼ 4.94% ) continued to fall despite beating Q4 revenue estimates ($503M vs. $493M expected), as weaker Q1 guidance and AI risk weighed on shares. Logistics stocks hit by AI fears: Trucking and freight stocks slid sharply last Thursday as investors worried that advancing AI could pressure margins in software-reliant logistics systems. There was a recovery on Friday, but Landstar $LSTR ( ▲ 3.64% ) and C.H. Robinson $CHRW ( ▲ 4.91% ) both fell, dragging down the Dow Transports ~4%.
| IPO Roundup 📍 | Clear Street Group postponed its IPO due to market conditions. The broker was set to offer 23.8 million shares for $40 t0 $44 each, and intends to reconsider an IPO at a later time. Mavis Tire is considering a US IPO, with the BayPine-controlled company potentially listing later this year. Moloco, an AI-driven ad-tech firm last valued at over $2B, has tapped Goldman Sachs and JPMorgan Chase to lead its planned IPO.
| For deeper, stock market research upgrade to the WSR Investing Club | | | Today's Headlines 📖🍿 | Private Credit's software exposure: We recently talked about how BDCs have high software exposure, roughly~20%, but private credit's software bet is even bigger than previously thought, with poor labeling having led to an inaccurate number being reported. Bloomberg News found that at least 250 investments, worth over $9B, were failed to be correctly labeled as software loans by at least one BDC, underscoring bigger concerns about total software exposure. Warner Bros reopens the bidding door: Warner Bros. Discovery is weighing renewed talks with Paramount after receiving a sweetened $30/share offer that includes a $0.25 quarterly ticking fee, coverage of Netflix's $2.8B breakup fee, and debt backstops. Warner's board remains bound by its previous $27.75/share deal with Netflix but could reignite a bidding war if it deems Paramount's proposal superior. Microsoft's AI CEO, Mustafa Suleyman, warns that AI will soon reach human-level performance on "most, if not all" white-collar professional tasks, and that most of those tasks will be fully automated by AI within 18 months. Suleyman says the trend is already observable in software engineering, where AI assists with the "vast majority" of employees code production. Anthropic CEO says AI-related revenue could be farther away than many expect, and that missed revenue forecasts could be devastating for big-spending companies. Inflation cools to start 2026: US CPI rose 0.2% in January vs 0.3% estimated, the smallest monthly gain since July 2025, while core CPI rose 0.3% as expected and cooled to 2.5% YoY. This softer-than-feared news lifted markets and increased bets that the Fed could cut rates up to three times this year. Anduril is in talks to raise at over $60B+ valuation, speaking with both traditional Silicon Valley investors as well as institutional backers for as much as $8B in new funding. The Ivies are trimming their PE allocation following recent lackluster returns, with long lockup investments returning an annualized 7.4% the last three years, well below the S&P500. AMG expands Garda partnership: Affiliated Managers Group increased its stake in Garda Capital Partners, a $12B AUM fixed-income relative value manager. Terms were undisclosed, with Garda remaining majority-owned by its management team. Vista explores AlertMedia sale: Vista Equity Partners has chosen JPMorgan Chase & Co. to consider a $1B+ sale of emergency communications software provider AlertMedia. Goldman is leading a $3.5B financing to support the $8.4B buyout of Clearwater Analytics by Permira and Warburg Pincus. The debt is offered at S+450. Moelis hires Kyle Reidy to lead its private credit secondaries business as demand surges amidst a slowdown in dealmaking. Reidy was most recently the head of structured credit origination at Barclays. Ted Pick and Jane Fraser got pay raises to $45mm and $42mm, respectively, following excellent years for both Morgan Stanley and Citi. Sugar prices have hit a five-year low as the rise of weight-loss drugs has accelerated a drop in demand for sweet treats. Notably, "The top 20% of consumers account for around 65% of sales of products like cookies and ice cream. If those 'super users' end up on GLP-1 drugs, you get a non-linear reduction in sales." Goldman GC Kathyn Ruemmler will resign later this year after renewed scrutiny over her past ties to Jeffrey Epstein. Olympic medals are more valuable this year than ever before, and Norway is currently in the lead with 28, including 12 golds.
| | M&A Transactions💭 | Schroders (LON: SDR), an asset manager based in London, has reached a definitive agreement to be acquired by Nuveen for GBP 9.9B. | Telefonica Chile, a telecommunication company, was acquired by Millicom International Cellular (NAS: TIGO) for $200.0M. EV/EBITDA was 7.26x and EV/Revenue was 0.22x. | Stash, developer of a personal finance application, has reached a definitive agreement to be acquired for $425.0M by Grab Holdings (NAS: GRAB). | Pan Ocean (KRX: 028670) reached a definitive agreement to acquire The Korean Wet Tanker Business of SK Shipping for $668.0M. | Molfino Hnos, producer of cheese and dairy products, has reached a definitive agreement to be acquired for $684.0M by Gloria Foods. EV/Revenue was 0.71x. | Inkia Energy, operator of an energy production company, has reached a definitive agreement to be acquired for $1.7B by CPP Investments. The transaction values the company at $3.4B. | GF Casting Solutions, manufacturer of casting components, was acquired for $336.0M by Nemak (MEX: NEMAKA). Lazard advised on the sale. | The Renewable Energy Platform in Spain of Bestinver was acquired by IST Investment Foundation for EUR 330.0M. | Avramar, operator of an aquafarming company, was acquired for EUR 210.0M by Cooke Aquaculture. | Avadel Pharmaceuticals, a specialty pharmaceutical company, was acquired for $2.37B by Alkermes (NAS: ALKS). EV/EBITDA was 222.11x and EV/Revenue was 9.05x. | TRI Pointe Homes (NYS: TPH), an American construction company, has reached a definitive agreement to be acquired for $4.5B by Sumitomo Forestry (TKS: 1911). EV/EBITDA was 9.93x and EV/Revenue was 1.2x. Moelis & Company advised on the sale. | Synchronoss Technologies, a provider of white-label cloud, messaging, digital and network management solutions, was acquired for $258.4M by Lumine Group. EV/EBITDA was 9.77x and EV/Revenue was 1.51x. TD Cowen advised on the sale. | Sushi Sushi, operator of a chain of sushi restaurants, has reached a definitive agreement to be acquired for $160.0M by Genki Global Dining Concepts (TKS: 9828). | Olympic Steel (NAS: ZEUS), provides metal processing, was acquired for $1.075B by Ryerson (NYS: RYI). EV/EBITDA was 15.57x and EV/Revenue was 0.57x. Houlihan Lokey and KeyBanc Capital Markets advised on the sale. | Neysa Networks, developer of an AI cloud and platform-as-a-service startup, has entered into a definitive agreement to be acquired for $1.2B by TVS Capital, Teachers' Venture Growth, Blackstone, Nexus Venture Partners, and 360 ONE. | Zim Integrated Shipping Services (NYS: ZIM), an asset-light container liner shipping company, has reached a definitive agreement to be acquired for $9.876B by Hapag-Loyd (ETR: HLAG). EV/EBITDA was 3.48x and EV/Revenue was 1.3x. Evercore Group advised on the sale. | Private Placement Transactions💭 | WorldLand, developer of an AI-based GPU infrastructure platform, raised $100.0M of venture funding from Bolts Capital. | Talkiatry, provider of mental health care services, raised $210.0M of Series D venture funding through a combination of debt and equity led by Perceptive Advisors. | Simile, developer of an AI-driven human behavior simulation platform, raised $100.0M of venture funding led by Index Ventures. | Linkerbot, developer of dexterous robot hands, raised nearly CNY 1.5B of Series B venture funding led by Beijing Shengshi Hongming Investment Fund Management and Daode Investment. | Anthropic, developer of a large language model platform, raised $30.0B of Series G venture funding in a deal led by Coatue Management, Dragoneer Investment Group, and Founders Fund at a pre-money valuation of $350.0M. | Weineng Battery, manufacturer of vehicle battery products, raised $1.0B of Series C3 venture funding from Hefei Construction Investment Holdings and Hefei Economic and Technology Development Zone Venture Capital Guidance Fund. | Megazone Cloud, provider of integrated cloud consulting and implementation services, raised KRW 500.0B of Series D venture funding from Bain Capital. | Leading the Future, operator of a political advocacy organization, raised $125.0M of venture funding from Greg Brockman, Marc Andreessen, and Ben Horowitz. | GREW Solar, operator of a renewable energy engineering, procurement, and construction company, raised INR 13.5B of venture funding led by Bay Capital. | | Odds of the Day 🍒 | Polymarket traders are pricing in a 26% chance of 2 rate cuts in 2026. | | | Noteworthy Chart 🧭 | The market for Hyperscaler Credit Default Swaps is rapidly growing: | | | Meme Cleanser 😆 | | Until next time! | | Housekeeping Items: | Our Weekly Poll: | How are we doing?Tell us how we're doing and any feedback you have | | Finance Jobs: Looking for a job in Finance? 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