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NEWS
AI & Earnings Jitters Jolt Stocks

Source: Tenor.com

Tech stock weakness kept a lid on the major indexes, stopping bulls in their tracks and allowing bears to pounce and close the market near its lows. Jitters around slowing AI spending and earnings from Home Depot and other economic bellwethers are keeping investors on their toes in the final week of February. 👀 

Today’s issue covers the latest AI developments, Berkshire blasting to new all-time highs, Hims & Hers hurting after earnings, and more from the day. 📰

Here’s the S&P 500 heatmap. 6 of 11 sectors closed green, with healthcare (+0.81%) leading and technology (-1.43%) lagging.

Source: Finviz.com

And here are the closing prices: 

COMPANY NEWS
Microsoft Clarifies Its AI Cash Outlay 💵 

Analysts at TD Cowen posted a note on Friday suggesting that Microsoft had canceled some data center leases, causing the tech sector to spiral. The analysts cited channel checks that indicated Microsoft canceled leases with at least two private data center operators. 😲 

However, the company clarified today that it’s sticking to its plan to allocate more than $80 billion of its cash to capital expenditures. With that said it acknowledged that it “may strategically pace or adjust our infrastructure in some areas.”

The company says its well positioned to meet current and increasing customer demand, saying, “Last year alone, we added more capacity than any prior year in history. While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions. This allows us to invest and allocate resources to growth areas for our future.”

Although Stocktwits sentiment remains ‘bullish,’ just 16% of the 4,500+ community members voting in our poll see Microsoft as their top tech stock for 2025. 😢 

Source: Stocktwits

Meanwhile, Alibaba plans to spend $53 billion on AI infrastructure, such as data centers, over the next three years as its pivot to become an AI leader takes hold. This is a major move for the company and China, but its timeline and investment put it behind the curve of U.S. tech giants, who are spending hundreds of billions annually.

Lastly, Anthropic released its ‘most intelligent’ AI model yet, Claude 3.7 Sonnet. The so-called hybrid model combines an ability to reason (or stop to think about complex answers) with a traditional model that spits out answers in real-time. 🤖 

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EARNINGS
Berkshire Builds Its Cash Balance 💰️  

Berkshire Hathaway’s operating profit, the earnings from its wholly owned businesses, soared 71% YoY to $14.5 billion during the fourth quarter. Its insurance underwriting business saw a 302% YoY profit jump, helping drive results. 💵 

As for the company’s investment gains, they slowed alongside the broader market. Still, it gained $5.2 billion as it sold more equities than it bought for the ninth straight quarter. In total, the company sold $134 billion in equities during 2024.

The selling spree in its two largest holdings, Apple and Bank of America, has grown its cash balance to $334.2 billion. However, Buffett’s letter said the cash balance “doesn’t reflect a dimming love for buying stocks and businesses.” 😐️ 

Still, he hinted that high valuations could explain the high cash balances, especially as Berkshire’s buyback freeze remains in place. Most analysts view this as the continued prudent action Buffett and his team often take during periods of strong stock market performance.

Shares hit new all-time highs today on the news, with Stocktwits sentiment remaining in ‘extremely bullish’ territory. 🤑 

Source: Stocktwits

While we’re talking about the financial sector, JPMorgan is examining the direct lending segment of the business. It’s setting aside $50 billion to grow its presence in this highly popularized space. 🏦 

STOCKS
Other Noteworthy Pops & Drops 📋️ 

Gran Tierra Energy ($GTE -12%): The company’s earnings and revenue missed analysts estimates, with CEO Gary Guidry saying 2025 is set to be a transformational year for the company as it advances exploration drilling in Ecuador.

Robinhood ($HOOD -6%): The Securities & Exchange Commission (SEC) has closed its investigation into Robinhood Crypto days after dropping its Coinbase case.

Strategy ($MSTR -7%): Disclosed another $2 billion Bitcoin purchase.

Bridge Investment Group ($BRDG +33%): Global alternative asset manager Apollo agreed to acquire the company in an all-stock transaction worth $1.5 billion.

Sun Communities ($SUI +6%): The real estate investment trust (REIT) jumped on news that Blackstone Infrastructure will acquire Safe Harbor Marinas, a marina and superyacht servicing business in the U.S., for $5.65 billion.

EARNINGS
Hims & Hers Gets Hit After Earnings 😬 

The telehealth company’s earnings and revenue topped estimates; however, its gross margins of 77% missed analyst estimates of 78.4%. 📊 

This is the second down day in the stock, as Friday’s U.S. Food and Drug Administration (FDA) announcement that the shortage of semaglutide injection products was resolved. Summit Therapeutics, Viking Therapeutics, and other competitors in the weight-loss drug space also fell sharply.

Excluding its GLP-1 offerings, revenue increased 43% YoY to $1.2 billion for the full year, meeting the company’s 2025 revenue target a year early. Still, despite its product suite’s momentum, margin declines remain at the center of attention. Concerns are that the company will have to discount prices to stay competitive. 🔻 

Still, top-line growth continues to exceed estimates. First-quarter guidance was $520 to $540 million, while analysts expected $497 million.

Shares are now down nearly 45% from last Wednesday’s highs, splitting the Stocktwits community. Despite the debate, overall sentiment remains ‘extremely bullish,’ with nearly 50% of the 2,000 people voting in our poll “buying the dip.” 🛒 

Source: Stocktwits

WHAT’S ON DECK
Tomorrow’s Top Things 📋

Economic data: Fed Logan Speech (4:20 am ET), S&P/Case-Shiller Home Prices (9:00 am ET), CB Consumer Confidence (10:00 am ET), Fed Barr Speech (11:45 am ET), Fed Barkin Speech (1:00 pm ET). 📊

Pre-Market Earnings: Home Depot ($HD), Planet Fitness ($PLNT), American Tower ($AMT), Krispy Kreme ($DNUT), Cipher Mining ($CIFR), Harmony Biosciences ($HRMY). 🛏️

After-Hour Earnings: AMC Entertainment ($AMC), Cava Group $(CAVA), Lucid Group ($LCID), First Solar ($FSLR), Lemonade ($LMND), Coupang ($CPNG), Workday ($WDAY), Intuit ($INTU), Caesars Entertainment ($CZR), Range Resource ($RRC). 🎧

Plus, join Axon Enterprise’s President Josh Isner and Stocktwits CEO Howard Lindzon for an exclusive post-earnings-call interview with community questions!

Links That Don’t Suck 🌐

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📡 ISPs fear wave of state laws after New York’s $15 broadband mandate

🚨 Theranos founder Elizabeth Holmes’ conviction upheld by US appeals court

💊 Pfizer names Patrizia Cavazzoni, former top FDA official, as chief medical officer

🥔 Potato chip prices are soaring due to an unexpected factor: ‘It’s not sustainable’

🏬 Joann to shutter all 800 fabric stores after failing to find a buyer to save its locations

🚴 DoorDash to pay NY delivery workers $17 million for using their tips to cover wages

*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.

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