Rackspace (NasdaqGS:RXT) Q4 2025 Earnings call February 26, 2026 08:30 AM ET Company ParticipantsGajen Kandiah - CEOMark Marino - CFOSagar Hebbar - Head of Investor RelationsOperatorGood day and thank you for standing by. Welcome to the Rackspace Fourth Quarter 2025 Earnings Conference call. At this time, all participants are on a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sagar Hebbar, Head of Investor R ...

Core Insights - The article discusses the trend of startups adopting a "Palantir-like" model, emphasizing the deployment of Forward Deployment Engineers (FDEs) to create customized workflows for clients, akin to special forces rather than traditional software companies [1][2][10]. Group 1: The Appeal of the Palantir Model - The allure of the Palantir model lies in its ability to integrate disparate systems and deliver customized platforms quickly, which is particularly appealing to startups aiming for significant contracts [2][10]. - The surge in FDE job postings, with reported increases of 800% to 1000% this year, indicates a growing trend among AI startups to ensure effective deployment through on-site engineering support [10][12]. Group 2: Unique Attributes of Palantir - Palantir's success is attributed to its unique combination of a robust product platform, embedded elite engineers, and proven performance in critical government and defense environments, which most companies struggle to replicate [9][21]. - The company's approach is not merely about automating existing processes but involves pushing clients to adopt new workflows, which is a rare courage among vendors [18]. Group 3: Challenges of Imitating the Model - Many startups attempting to emulate Palantir may end up as high-cost service firms without the competitive advantages that come from a true platform [2][10]. - The article warns that not every problem warrants a "Palantir-level" solution, especially in less critical environments where the ROI does not justify extensive customization [15][16]. Group 4: Key Considerations for Adoption - Companies should assess the criticality of the problems they are solving, the concentration of their customer base, and the regulatory environment before adopting a Palantir-like model [23]. - The article suggests that startups should view FDE deployment as scaffolding rather than the foundation of their business, ensuring that they do not become trapped in a service model [25][30]. Group 5: Practical Steps for Implementation - Startups are encouraged to focus on building strong foundational components rather than fully customized workflows, allowing for scalability and reusability [26]. - Engaging FDEs as integral parts of product development rather than just delivery can create a feedback loop that enhances product quality and customer satisfaction [27].

Core Insights - More than 50% of current enterprise software could potentially be replaced by AI, raising investor concerns over software stocks [1][2][4] - Major software stocks, including those in the SaaS sector, have experienced significant declines, with the iShares Expanded Tech-Software Sector ETF down over 20% this year [3] AI Impact on Software - The CEO of Mistral AI indicated that a shift from SaaS to AI is underway, with enterprises able to develop software rapidly using AI [4][6] - There is a "replatforming" trend where businesses are looking to replace outdated IT systems with AI solutions, which are seen as more efficient and cost-effective [7][8] Market Dynamics - Mistral AI is experiencing increased interest from over 100 enterprise customers looking to replatform their IT systems [7] - Workflow software is expected to face significant disruption from AI, while systems of record that support data management will remain essential [9] Expansion Plans - Mistral AI plans to open its first office in India, targeting both public and private sector customers [10] - The company aims to partner with existing firms in India to leverage local infrastructure, aligning with the Indian government's push for domestic data storage [11]

Summary of Key Points from the Conference Call Industry Overview - The software industry is experiencing a reset in valuations due to concerns over AI disruption, which has become a central topic in investment discussions [1][2] - The analysis focuses on four companies: MongoDB, Rubrik, Nutanix, and Procore, using an AI Impact Framework to assess risks and opportunities related to AI [1] Core Insights and Arguments AI Impact Framework - The framework evaluates companies across six dimensions: orchestration risk, monetization exposure, system-of-record ownership, data and integration moat, AI execution, and budget alignment [11] - Companies with strong data management and operational roles are expected to benefit from AI rather than be undermined by it [1][10] Company-Specific Analysis 1. **MongoDB** - Down 18% YTD, but viewed as a long-term AI beneficiary due to its insulated position from seat disruption fears [15][16] - Expected to see significant growth in AI workloads by FY27, with a stable core business supporting larger deployments [16][21] - MongoDB's architecture is well-suited for AI applications, enhancing its relevance in the AI stack [21][22] 2. **Rubrik** - Down 33% YTD, but has shown strong ARR growth and profitability [23] - Positioned as a primary consolidator in backup and recovery, with a focus on data security in the AI era [27][29] - The monetization model based on data under management aligns well with the growth of AI-driven activity [29][32] 3. **Procore** - Down 30% YTD, facing concerns over workflow exposure to AI disruption [31] - Operates as a primary data aggregation layer for construction workflows, maintaining structural relevance [31][37] - The pricing model based on construction volume limits exposure to seat compression risks [38][39] 4. **Nutanix** - Down 22% YTD, facing challenges related to demand elasticity and AI disruption fears [41] - Positioned at the infrastructure layer, which is insulated from AI-driven automation risks [44] - The company is focusing on hybrid multi-cloud opportunities, which remain relevant despite near-term uncertainties [50] Additional Important Insights - The recent selloff in software stocks is attributed more to shifts in investor sentiment rather than fundamental deterioration [2][4] - AI innovation is accelerating, with new developments indicating that AI will reinforce long-term growth for many companies [1] - The analysis suggests that the market is applying a broad risk premium, creating potential opportunities in software businesses with intact fundamentals [4][10] Valuation and Risks - MongoDB's price target is set at $475, with key risks including competition from relational database incumbents and potential slowing in cloud migration [48][49] - Rubrik's price target is lowered to $80, with risks including competition and elevated product development costs [50][52] - Procore's price target is set at $75, with risks related to competition and execution challenges in international markets [53][54] - Nutanix maintains a price target of $60, with risks tied to public cloud adoption and competition in the hybrid multi-cloud space [55][56] This summary encapsulates the key points discussed in the conference call, highlighting the industry context, company-specific insights, and valuation considerations.

Core Insights - The article discusses the author's journey from a political career to value investing, emphasizing the importance of risk management and long-term wealth growth [1] Group 1: Career Transition - The author initially pursued a career in politics but shifted to finance after facing challenges in 2019, recognizing the need for financial stability [1] - The transition to value investing was motivated by a desire to make money work effectively and to protect against future setbacks [1] Group 2: Professional Experience - From 2020 to 2022, the author worked in a sales role at a law firm, where they became the top-grossing salesman and managed a team, contributing to sales strategy [1] - The experience gained during this period was instrumental in assessing company prospects based on sales strategies [1] Group 3: Investment Advisory Role - Between 2022 and 2023, the author served as an investment advisory representative with Fidelity, focusing on 401K planning [1] - The author excelled in this role, passing Series exams ahead of schedule, but felt constrained by Fidelity's reliance on modern portfolio theory, leading to a decision to leave after a year [1] Group 4: Current Endeavors - In November 2023, the author began writing for Seeking Alpha, sharing investment opportunities discovered through personal experience [1] - The articles serve as a platform for the author to document and share the investment journey with readers [1]

Market Overview - Major indices closed higher, with the Dow up over 500 points, representing a 1% increase [1] - The NASDAQ composite increased by more than half a percent, while the S&P 500 and Russell 2000 also saw gains of nearly 1% [2][3] Sector Performance - Industrials experienced significant growth, driven by a strong ISM manufacturing report, marking the best activity since 2022 [3] - Consumer staples and financials also closed up over 1%, while energy and utilities sectors saw declines of nearly 2% and 1.5%, respectively [4] Notable Stock Movements - Apple and Walmart both rose by 4%, with Micron increasing by 5% [4] - SanDisk showed remarkable performance, up 180% year-to-date, while Intel rebounded with a 5% increase [5][6] AI Market Dynamics - AI is no longer the sole driver of market rallies, with Nvidia and Oracle experiencing declines while broader markets surged [7] - There is a shift towards diversification outside of the AI theme, with a focus on value investments [10][12] Earnings Insights - Palantir reported Q4 EPS of 25 cents, exceeding expectations of 23 cents, with revenue up 70% to $1.41 billion [26] - The company anticipates adjusted operating income for Q1 between $870 million and $874 million, also beating consensus [27] Growth Projections - Palantir's guidance for 2026 indicates a growth rate of 61%, suggesting a reacceleration in demand [35] - The US commercial revenue for Palantir increased by 137% year-over-year, indicating strong market demand [37] Competitive Landscape - Palantir is positioned uniquely in the market, with its offerings being integral to AI infrastructure, distinguishing it from traditional software companies [52][56] - The company is seen as a leader in the AI space, with significant potential for growth as AI technologies continue to evolve [54][56]

Core Insights - Cognizant Technology Solutions (CTSH) is set to report its fourth-quarter 2025 results on February 4, 2026, with earnings expected at $1.32 per share, reflecting a 9.09% increase year-over-year [1][8] - The company anticipates fourth-quarter revenues between $5.27 billion and $5.33 billion, indicating a growth of 3.8-4.8% year-over-year [1][8] Revenue Estimates - The Zacks Consensus Estimate for fourth-quarter revenues is $5.31 billion, representing a year-over-year increase of 4.42% [2] Earnings Performance - Cognizant has consistently surpassed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 5.78% [3] Growth Factors - The upcoming performance is expected to benefit from an expanding clientele and a strong pipeline, including 16 large deals signed year-to-date, each valued at $100 million or more [4] - The demand for GenAI solutions in sectors like financial services, healthcare, and manufacturing is anticipated to drive growth, particularly in fraud detection and predictive maintenance [5] Strategic Partnerships - Cognizant's partnerships with major companies such as Microsoft and Rubrik are expected to enhance its service offerings and drive growth [7][9] - The multi-year strategic partnership with Microsoft aims to develop AI solutions and collaborate on large-scale deals across key sectors [7] Clientele Expansion - The company's robust network of partners, including notable firms like IBM, Amazon, and NVIDIA, is likely to contribute to growth in the fourth quarter [6] Conclusion - Cognizant's expanding clientele and AI-driven solutions are projected to support its growth prospects and top-line performance in the upcoming quarter [11]

Meta is the cheapest Magnificent Seven stock at the moment, and it's expected to grow faster than Microsoft, Apple, and Alphabet.In this video, I will discuss Meta (META 0.09%), why it is so cheap, updates on CoreWeave, Micron, Rubrik, and OpenAI. Watch the short video to learn more, consider subscribing, and click the special offer link below.*Stock prices used were from the trading day of Jan. 16, 2026. The video was published on Jan. 16, 2026. ...

Core Viewpoint - The article emphasizes the importance of conducting thorough personal research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Group 1 - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3]. - There is a clear disclaimer regarding the lack of any stock or derivative positions in the companies mentioned, indicating a neutral stance [2]. - The article expresses the author's personal opinions and does not reflect the views of any affiliated organization [4].

Core Insights - Cathie Wood's ARK Investment Management has invested over $30 million in Robinhood shares during a period of stock price decline, viewing it as a buying opportunity [1][4] - Despite a recent 11% drop in value over the past month and a 14% decline in the past week, Robinhood's year-to-date performance shows a remarkable 217% gain [2] - The recent sluggishness in Robinhood's stock is attributed to decreased trading volumes and assets under custody, indicating reduced user activity [2] Company Performance - Robinhood reported record Q3 sales of $1.27 billion, a 100% increase year-over-year, with a net income of $556 million, marking its best quarter ever [6] - The earnings snapshot for the last four quarters shows consistent growth, with Q3 2025 EPS at $0.61 and revenue at $1.27 billion, both exceeding expectations [7] Investment Strategy - Wood's investment in Robinhood aligns with her broader strategy focused on digital infrastructure, software, and automation, which are seen as key areas for future growth [4] - The recent purchases of Robinhood shares reflect Wood's long-term conviction in the company's potential as a major disruptor in the finance industry, despite short-term market fluctuations [3][4]