[music] Welcome to Market Catalysts. I'm Julie Hyman. [music] We are 30 minutes into the US trading day.So, let's get to the three market catalyst we're watching this hour. First up, the AI scare trade weighs on investor sentiment still or again. We're going to have full market coverage [music] ahead as the software selloff simmers on Wall Street.Plus, we'll get a preview of Walmart's earnings results after the retailer's [music] trillion dollar milestone. And we'll talk with the CEO, Dutch Bros, as the sto ...

Market Overview - Investor sentiment is currently weighed down by concerns over AI's potential impact on various industries, leading to continued selling pressure in the markets, particularly in technology and software sectors [3][4][9] - The Dow is down 180 points, and the S&P 500 has decreased by 0.75% year-to-date, while the NASDAQ is down 4% [3][5] - Despite the negative sentiment, the S&P 500 remains near record levels, indicating that the market is not far off from its highs [4] Company Earnings and Performance - Walmart is set to report its fourth-quarter earnings, with expectations of strong performance following a successful holiday season, projecting same-store sales growth of around 4.5% [90][93] - Concerns exist regarding future guidance, particularly in light of weak consumer sentiment affecting purchasing patterns, as noted by General Mills [95][98] - Dutch Bros plans to aggressively expand, aiming to open at least 181 stores by 2026 and reach 2,029 shops by 2029, despite shares falling over 30% in the past year due to concerns about demand and costs [33][34] Technology Sector Insights - The software sector is experiencing significant selling pressure, with many stocks underperforming, although some companies, particularly those with usage-based models, may thrive in an AI-driven environment [26][31] - Companies like Micron are facing pressure despite ongoing demand for memory chips, indicating a disconnect between market sentiment and actual business fundamentals [6][7] - The private credit market is showing signs of distress, with over 15% of US leveraged technology loans marked at distressed levels, raising concerns about the overall health of the credit market [9][12] Analyst Ratings and Market Predictions - Morgan Stanley has named Citigroup as a top pick among large US lenders, raising its price target to $152, indicating confidence in the bank's performance [72] - Deutsche Bank has lowered its price target for DraftKings to $26, citing pressures from increased promotions and slowing growth [73] - True Securities upgraded Shopify to a buy rating, highlighting its recent growth and long-term drivers, raising the price target to $150 [75]

Core Insights - U.S. equity markets in Q4 2025 were influenced by optimism regarding potential monetary easing and caution about economic growth and valuations [1] - The Meridian Hedged Equity Fund gained 0.08% in Q4 2025, underperforming the S&P 500 Index's 2.66% and the CBOE S&P 500 BuyWrite Index's 6.53% [1] - The firm is monitoring factors affecting market returns, including monetary policy and AI investment sustainability amid high valuations [1] Company Analysis: DraftKings Inc. - DraftKings Inc. is a leading digital sports entertainment and gaming company, with a market capitalization of $10.832 billion [2] - The stock closed at $21.76 on February 13, 2026, with a one-month return of -33.29% and a 12-month decline of 59.32% [2] - The company faced challenges in Q4 2025 as earnings fell short of expectations and management reduced forward guidance due to unfavorable betting outcomes and competitive pressures [3] - Despite near-term pressures, the company is expanding into adjacent prediction markets through acquisitions and increasing its share repurchase authorization to enhance shareholder value [3] - The firm believes DraftKings' earnings potential remains intact due to strong user engagement and ongoing product innovation [3]

Core Insights - The article discusses the current state of the stock market, highlighting notable companies that have experienced significant movements during a volatile earnings season [2]. Group 1: Company Performances - Robinhood Markets (HOOD) faced a Q4 revenue miss and four price-target cuts, with the lowest target set at $113 by J.P. Morgan Securities, leading to five consecutive weekly losses [3]. - Cisco Systems (CSCO) reported a top-line beat but was negatively impacted by rising memory chip prices and AI hardware demand, resulting in four straight losses and testing its 126-day moving average [6]. - Carvana (CVNA) is heading for a 14.5% weekly loss without reporting earnings, following accusations of hiding $1 billion in expenses, despite a previous three-year gain of 3,000% [8]. - DraftKings (DKNG) experienced a classic top-line beat overshadowed by a poor fiscal year revenue forecast, leading to six consecutive weekly losses, with a consensus 12-month price target of $43.61 representing a 96% premium from its current price [10][11]. - NuScale Power (SMR) received a downgrade from TD Cowen to "hold" from "buy," bringing it close to its lows of $11.09, despite a strategic partnership with Oak Ridge National Laboratory [12].

Core Insights - DraftKings reported record performance in Q4, achieving its first-ever annual profit in 2025, but shares fell 13% due to lukewarm guidance for the full year [1] - The stock is down approximately 40% year-to-date and is currently trading at 22x forward earnings, which Jefferies considers a "buying opportunity" for long-term investors [2] Financial Performance - User growth remained flat at 4.8 million in Q4, and the 2026 revenue guidance fell short by $0.4 million compared to consensus [5] - DraftKings achieved a net income of $136 million in Q4, indicating the underlying strength of its core business [7] Market Position and Future Outlook - The demand for sports wagering in the U.S. is not decelerating, and DraftKings is well-positioned to remain a leader in this fast-growing market [7] - The CEO highlighted prediction markets as a "massive, incremental opportunity" that could help acquire millions of customers, potentially driving stock prices up over time [6] Analyst Ratings and Price Targets - Jefferies maintained a "Buy" rating on DraftKings with a price target of $46, suggesting potential for the stock to more than double by the end of 2026 [8] - The consensus rating on DKNG shares remains at "Strong Buy," with a mean target of about $43, indicating a potential rally of over 100% by year-end [10]

Core Viewpoint - The rapid growth of prediction markets in the US is facing significant legal challenges, with lawmakers and regulators arguing that these platforms are essentially gambling operations disguised as financial exchanges [1][6]. Industry Overview - Prediction markets allow users to trade on various outcomes, including sports and elections, by betting against one another rather than against a house, with platforms collecting transaction fees [3]. - Kalshi reported over $1 billion traded on Super Bowl Sunday and nearly $10 billion in January, primarily related to sports [2]. Regulatory Landscape - Prediction markets are classified as "event derivatives" and are regulated under federal commodities law by the CFTC, allowing them to operate in all 50 states for users aged 18 and older [4]. - In contrast, licensed sportsbooks are restricted to states where sports betting is legalized and must comply with various consumer protection regulations [5]. Legal Challenges - At least 20 federal lawsuits have been filed, with states arguing that prediction markets evade state gambling laws and taxes [1][6]. - New York's gaming commission ordered Kalshi to cease operations related to sports contracts, leading to legal challenges from the company [8]. Political and Legislative Actions - Several states are advancing legislation to regulate or ban prediction markets, with proposals to restrict participation to individuals over 21 [16][26]. - The CFTC has faced pressure from lawmakers to not override state laws regarding sports betting [25]. Industry Response - Companies like Kalshi and Polymarket assert that they are regulated futures exchanges and not gambling operators, emphasizing the need for consistent national oversight [7][14]. - Both companies have implemented measures to monitor for insider trading and market manipulation, claiming adherence to standards similar to those of traditional exchanges [19][20]. Broader Implications - The debate over prediction markets raises questions about the commoditization of human events and the potential for insider trading, as highlighted by concerns from state representatives [17][32]. - Advocacy groups are calling for regulations that prioritize player health and safety, likening the risks of prediction markets to traditional gambling [29][30].

Core Viewpoint - DraftKings Inc. (NASDAQ:DKNG) is considered a promising low-cost stock despite recent adjustments in price targets by analysts, indicating a favorable investment opportunity in the current market environment [1][4]. Group 1: Analyst Adjustments - Canaccord Genuity analyst Michael Graham lowered the price target for DraftKings from $54 to $50 while maintaining a Buy rating, following a sell-off in digital gambling stocks due to concerns over declining handle trends in December and January [1][2]. - Rothschild & Co Redburn also reduced its price target for DraftKings from $37 to $35 with a Neutral rating, citing a likely revenue miss for operators based on Q4 state data [4]. Group 2: Market Trends and Performance - Despite the concerns regarding handle trends, recent data suggests that Q4 2025 results are expected to remain broadly in line with expectations, supported by stronger hold and a rebound in iGaming growth [2]. - The current market environment is seen as favorable for DraftKings, with lowered expectations and reset valuations providing an attractive entry point for investors, despite anticipated short-term volatility [3]. Group 3: Company Overview - DraftKings operates as a digital sports entertainment and gaming company, offering online sports betting, daily fantasy sports, media, digital lottery courier, and other products in the US and internationally [6].

Market Overview - The trading day is concluding with major equity averages finishing slightly in the green, indicating a quiet end to a volatile week [2][3] - Bitcoin has seen a notable increase of 4.5%, nearing $69,000, which has positively impacted related stocks like Coinbase [4][5] Company Performance - Applied Materials has emerged as a top gainer, with its stock rising approximately 8% after delivering an upbeat sales forecast driven by demand for artificial intelligence and memory semiconductors [8][9] - Coinbase, despite posting a 20% decline in fourth-quarter revenue to $1.8 billion and a net loss of $667 million, saw its stock rise by about 16% on triple average trading volume, likely influenced by Bitcoin's rally [10][11] - Rivian Automotive's shares surged nearly 27% following better-than-expected fourth-quarter results and its first annual gross profit, marking a significant milestone for the company [11][12] Sector Performance - The S&P 500 showed a positive trend with 367 names advancing against 136 declining, with utilities, real estate, and materials sectors outperforming [6][7] - Conversely, communications services and technology sectors lagged, with Nvidia shares falling by 2.2% amid concerns over revenue growth not keeping pace with capital expenditures [13][15] Regulatory and Market Dynamics - Applied Materials announced plans to settle a U.S. Commerce Department investigation by paying $252.5 million, which may alleviate some legal pressures on the stock [9] - DraftKings shares dropped by 13.5% after the company’s sales and profit forecasts fell short of Wall Street estimates, highlighting competitive pressures in the sports betting market [16] - Pinterest's shares fell nearly 17% due to projected sales for the current quarter missing Wall Street expectations, influenced by trade policies affecting the home furnishings category [17][18]

All right. We're about 2 minutes away from the end of the trading day. Katie Greifeld here with Bailey Lipschultz Romaine Bostick.He's still on that assignment. And here to help take us through the closing bell. It's a global, global simulcast.We welcome now Carol Massar and Tim Stenovec. We bring together all of our different audiences Carol. Two things.Happy Friday the 13th. The second thing is, it looks like it's going to be in a pretty quiet end to what was a very volatile week. Yeah, it's like a long w ...

Market Overview - Overseas stock markets closed lower on Friday, with the Euro Stoxx 50 down by -0.43%, China's Shanghai Composite down -1.26%, and Japan's Nikkei Stock 225 down -1.21% [1] - The S&P 500 Index closed up +0.05%, the Dow Jones Industrial Average up +0.10%, and the Nasdaq 100 Index up +0.18% [7] Earnings Reports - More than two-thirds of S&P 500 companies have reported Q4 earnings, with 76% beating expectations. S&P earnings growth is expected to rise by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth [2] - Rivian Automotive reported Q4 revenue of $1.29 billion, exceeding the consensus of $1.26 billion, and forecasted full-year vehicle deliveries of 62,000 to 67,000 [13] - Applied Materials reported Q1 adjusted EPS of $2.38, better than the consensus of $2.21, and forecasted Q2 adjusted EPS of $2.44 to $2.84 [14] - Airbnb reported Q4 gross booking value of $20.4 billion, surpassing the consensus of $19.46 billion, and forecasted Q1 revenue of $2.59 billion to $2.63 billion [16] Sector Performance - Software stocks rallied, with Crowdstrike Holdings up more than +4% and ServiceNow up more than +3%, contributing to the overall market support [10] - Metal companies retreated due to reports of the Trump administration working to narrow tariffs on steel and aluminum products, with Century Aluminum down more than -7% [12] - Cryptocurrency-exposed stocks rose, led by Coinbase Global, which closed up more than +16% after Bitcoin rallied more than +4% [11] Economic Indicators - US January CPI rose +2.4% year-over-year, weaker than the expected +2.5%, marking the smallest increase in 7 months [3] - Falling bond yields were bullish for stocks, with the 10-year T-note yield falling to a 2.25-month low of 4.05% [6]