Key Takeaways RELY, FTI, SHIP, AU and TPR screen for strong relative price strength.FTI's EPS is expected to grow 11.8% in 2026. The company beat estimates in 3 of 4 quarters.AU is set to experience 60% EPS growth in 2026.Wall Street stepped into 2026 with a solid footing after three powerful years of gains. Still, February brought fresh swings. Concerns about the long-term payoff from heavy AI spending triggered a rotation out of technology shares, even as many companies delivered strong earnings. The broa ...

Core Insights - The article discusses the investment potential of GOOGL shares, highlighting a beneficial long position held by the analyst [1]. Group 1 - The analyst expresses a personal opinion on GOOGL shares, indicating a positive outlook based on their own analysis [1]. - There is no compensation received for the article, emphasizing the independence of the analyst's views [1]. - The article does not provide specific investment recommendations, focusing instead on the analyst's perspective [2].

Economic Indicators - US November factory orders increased by +2.7% month-over-month, surpassing expectations of +1.6% and marking the largest increase in six months [2] - The US November trade deficit widened to -$56.8 billion, exceeding expectations of -$44.0 billion and representing the largest deficit in four months [2] - Weekly initial unemployment claims fell by -1,000 to 209,000, indicating a slightly weaker labor market than the expected 205,000, while continuing claims decreased by -38,000 to a six-month low of 1.827 million, showing a stronger labor market than the expected 1.850 million [2] Stock Market Performance - The S&P 500 Index fell by -1.02%, the Dow Jones Industrial Average decreased by -0.30%, and the Nasdaq 100 Index dropped by -1.69% [5] - Microsoft shares plummeted more than -12% due to disappointing growth in its cloud business, negatively impacting the broader market, particularly the Magnificent Seven technology stocks [4][12] - Meta Platforms saw an increase of more than +7% after providing a stronger-than-expected revenue outlook, contributing positively to the market [3][17] Earnings Reports - 81% of the 106 S&P 500 companies that have reported earnings thus far have exceeded expectations, with S&P earnings growth projected to rise by +8.6% in Q4 [7] - Meta Platforms reported Q4 revenue of $59.89 billion, surpassing the consensus of $58.42 billion, and forecasted Q1 revenue between $53.5 billion and $56.5 billion, well above the consensus of $51.27 billion [17] - International Business Machines reported Q4 revenue of $19.69 billion, exceeding the consensus of $19.21 billion, leading to a more than +6% increase in its stock [18] Sector Movements - Energy producers rallied as WTI crude oil prices rose more than +4% to a 4.25-month high, benefiting companies like ConocoPhillips and Marathon Petroleum, which saw increases of more than +3% [14] - Cryptocurrency-exposed stocks fell, with Bitcoin down more than -5% at a 1.75-month low, impacting companies like Coinbase and Marathon Digital Holdings [13] - Las Vegas Sands led the S&P 500 losers, down more than -14% after reporting weaker-than-expected Q4 results for its Macau operations [15]

Group 1: Trade Risks and Market Sensitivity - Renewed fears regarding a potential Canada-China deal are raising concerns about additional U.S. tariffs, impacting market positioning and risk across globally exposed sectors [1] - Trade narratives typically emerge when markets are extended, necessitating quick adjustments across equities, FX, and rates, indicating a fragile market environment [3] Group 2: Cryptocurrency Market Dynamics - Bitcoin has declined to approximately 86k after reaching near 96k, maintaining a broader downtrend influenced by the strengthening Japanese yen, which signals tighter global financial conditions [4] - The cryptocurrency market continues to act as a liquidity proxy, with Bitcoin likely to remain range-bound until currency volatility decreases and risk appetite improves [5] Group 3: Earnings Reports and Market Expectations - This earnings week is significant due to reports from major companies such as Tesla, Microsoft, Meta, and Apple, with high expectations for results and forward guidance on AI spending, margins, and consumer demand [6] - The current macroeconomic uncertainty means that strong execution from these companies could stabilize market sentiment, while cautious outlooks may lead to increased volatility [7]

Group 1 - The article discusses the potential for investors to position themselves in undervalued stocks that are mispriced by the market as January approaches [1] - Stone Fox Capital, based in Oklahoma, is led by Mark Holder, a CPA with extensive experience in investing and portfolio management [2] - The investing group "Out Fox The Street" offers stock picks, deep research, model portfolios, daily updates, real-time alerts, and community engagement to help investors identify potential multibaggers while managing risk [2] Group 2 - The article emphasizes the importance of conducting personal research or consulting a financial advisor before making investment decisions [4] - It clarifies that past performance does not guarantee future results and that the views expressed may not reflect those of Seeking Alpha as a whole [5]

OpenAI - OpenAI is attempting to raise $100 billion at a valuation of $830 billion, which is a significant increase from a previous valuation of $500 billion just weeks prior [2][4] - The debate around OpenAI's valuation reflects broader discussions about AI spending and the volatility in the shares of data center infrastructure providers like Oracle and CoreWeave, which have seen mixed performance this year [3] NIKE, Inc. - NIKE, Inc. reported $12.43 billion in revenue and $0.53 in earnings, surpassing analyst estimates of $12.22 billion and $0.38, but faced a 17% drop in Chinese revenue leading to a post-earnings share price decline [9][10] - Analysts have cut their price targets for NIKE, with UBS reducing it to $62 from $71, citing the need for the company to adjust its inventory and concerns about performance in China [10] - Cramer remains optimistic about NIKE's turnaround under CEO Elliott Hill, emphasizing the need to focus on the brand's core identity as a sports brand rather than a lifestyle brand [11][12][13] FedEx Corporation - FedEx Corporation reported $23.5 billion in revenue and $4.82 in earnings per share, exceeding analyst expectations of $22.8 billion and $4.12, leading to a positive outlook from analysts [9][14] - BMO Capital raised FedEx's share price target to $290 from $265 following the earnings report, reflecting confidence in the company's business-to-business strategy [14] - Cramer highlighted the importance of the business-to-business segment for FedEx, indicating that it is a more stable revenue source compared to business-to-consumer [14]

Market Overview - The Dow dropped 228 points, the S&P 500 fell by 1.16%, and the Nasdaq decreased by 1.81%, indicating a defensive market breadth with volume slightly above recent averages, suggesting active selling rather than passive drift [1] AI Sector Performance - The AI trade is showing signs of strain, particularly in megacap tech stocks. Oracle's shares fell by 5.4% following reports that Blue Owl Capital will not support a planned $10 billion data center deal, signaling a shift in market sentiment towards AI investments [2] - Nvidia's stock declined by 3.8% and Broadcom's by 4.5%, contributing to a nearly 4% drop in the chip index. Traders are increasingly questioning the sustainability of balance sheet strain in the sector as AI spending appears to be self-reinforcing, with OpenAI at the center of this dynamic [3] - Amazon's shares slipped by 0.6% amid news of potential talks to invest approximately $10 billion in OpenAI, which may enhance its AI capabilities but also serves as a reminder of rising costs in the sector [4] Trader Sentiment - Traders are currently stepping back from chasing dips, with decliners significantly outpacing advancers, particularly on the Nasdaq. This reflects a reassessment of exposure as year-end approaches, rather than indiscriminate selling [5] - Alphabet's shares fell by 3.2% as reports emerged that Google is collaborating with Meta to compete against Nvidia's software dominance. The market is focusing on execution risks and timelines rather than the long-term potential of this initiative [5]

Market Overview - Stocks initially moved higher at the start of trading on Monday but quickly lost ground, with major averages ending the day modestly lower. The Nasdaq fell by 137.76 points (0.6%) to 23,057.41, the S&P 500 dipped by 10.90 points (0.2%) to 6,816.51, and the Dow decreased by 41.49 points (0.1%) to 48,416.56 [1] Sector Performance - Computer hardware stocks continued their sharp pullback from the previous session, leading to a 2.9% decline in the NYSE Arca Computer Hardware Index [4] - Software stocks also experienced considerable weakness, with the Dow Jones U.S. Software Index losing 1.5%. Other sectors such as telecom, networking, and brokerage stocks showed notable declines, while pharmaceutical and healthcare stocks performed strongly [5] Economic Data Impact - Upcoming economic reports, including the monthly jobs report for November and retail sales data for October, are expected to influence market sentiment. A report on consumer price inflation is also scheduled for release, which could affect interest rate outlooks following the Federal Reserve's recent monetary policy announcement [3][8]

AI Adoption and Productivity - The industry anticipates 2026 as a critical year to demonstrate economic upside and productivity gains from AI investments [1][3] - Currently, approximately 55% of American workers report using AI, but this broad adoption has not yet translated into significant productivity improvements reflected in government, private, and university studies [2] - The industry needs to see meaningful depth of AI adoption to validate underlying economic fundamentals by 2026, potentially reflected in margin improvements for healthcare companies and financial institutions [3] - Earnings releases will be the first place to see the impact of AI, but the industry needs to see them show up in a meaningful way to justify valuations [4] Economic Impact of Investment - Capital expenditure (CapEx) spending has served as a macroeconomic stabilizer, surpassing expectations in 2025, even amidst stagnation in other economic sectors [6] - A significant pullback in CapEx spending could have broad-based economic implications extending beyond the tech sector [7] - Economic growth in 2025 is largely dependent on substantial investment plans from a few major tech companies [5] US-China Technology War - Despite trade uncertainties with China, US businesses have generally continued to perform well [8] - Increased decoupling with China could lead to reduced revenue and R&D, with potentially extensive economic implications [9] - Competition dynamics resulting from decoupling could potentially create a win-win situation for the US [9] Market Valuations and Investment - The market is questioning valuations, yet some companies are rising without fundamental support, such as Tesla potentially reaching a new record high since December 2024 [10] - With the end of a rate cut cycle, cash yields become less attractive, requiring careful monitoring of whether investments are directed towards actual infrastructure or alternative investments [12] - Elevated valuations need to be meaningful, with the proof being in the pudding [13]

Group 1 - Futu Holdings (FUTU) experienced a pullback after attempting a breakout at a buy point of 199.86 in October, but the stock has more than doubled year to date [1] - The buy point of 199.86 remains valid, with another potential entry point at 202.53 [1] - The current base for Futu Holdings is in the early stage, which historically yields better results compared to late-stage patterns [1] Group 2 - Upcoming earnings reports from Futu Holdings, Walmart, and Nvidia are being closely monitored [1][2] - The overall market saw a decline, with the S&P 500 and Nasdaq sliding, while stocks like Amazon and Apple rose on earnings [4] - Futu Holdings is highlighted as a stock to watch, alongside other companies like MP Materials and Palantir [4]