Amazon (AMZN) reported its Q4 earnings on February 5. The earnings spooked investors and sent the stock tumbling, which was already caught by the wider tech sell-off, trading 9% lower at the time of writing, Friday morning, Feb. 6, according to Yahoo Finance. What alarmed the investors was something Amazon President and CEO Andy Jassy said in the earnings release. “With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics, and low earth orbit satellites, we expe ...

Intel's conference call just kicking off at the top of the hour. Christina Parts Neville is here on set [music] with the very latest. So the guide was weak because they just don't have enough supply.They warned that there were supply constraint last quarter. Uh the peak of that supply constraint would be in Q1 this actual current quarter. I was able to speak with the CFO very recently just in the last hour or so just about the earnings.And so he attributed that weakness in the guide because of that. You're ...

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Core Insights - Arista Networks, Inc. (NYSE:ANET) is recognized as a strong buy growth stock by hedge funds, with upcoming financial results for Q4 2025 expected to show revenue between $2.3 billion and $2.4 billion, alongside a non-GAAP gross margin of 62-63% and an operating margin of 47-48% [1] - Analysts have provided positive ratings updates, with Melius Research maintaining a Buy rating and a price target of $200, while Piper Sandler upgraded the stock to Overweight and raised its price target from $145 to $159 [2] - The company is positioning 2026 as a "Year of Refresh," focusing on hyperscaler and AI exposure, enterprise investment, and maintaining a conservative setup at a reasonable valuation, which enhances model visibility [3] Company Overview - Arista Networks, Inc. specializes in developing, marketing, and selling cloud networking solutions, including EOS network applications and Gigabit Ethernet switching and routing platforms, with various product categories such as Core, Cognitive Adjacencies, and Network Software and Services [4]

Core Insights - U.S. industrial policy is driving a significant wave of domestic capital expenditures (capex), particularly in the semiconductor and AI infrastructure sectors [1] - The increase in capex is contributing to a noticeable boost in U.S. economic activity and GDP, influenced by tariffs, subsidies, and national-security priorities [1] Group 1 - The current capex wave is one of the largest seen in decades, primarily fueled by advancements in semiconductors and AI [1] - Tariffs and subsidies are playing a crucial role in encouraging factory construction and equipment spending across the U.S. [1] - National-security priorities are also influencing investment decisions, further enhancing the domestic industrial landscape [1]

Summary of the UBS Multi-Industry Outlook for 2026 Industry Overview - The report focuses on the **US Electrical Equipment & Multi-Industry** sector, projecting a strong performance in 2026, similar to the previous year where the XLI index rose by **18%** compared to the S&P's **16%** [3][71]. Core Insights - **Earnings Growth**: Multi-Industry companies are expected to grow earnings by **12%** on average in 2026, with limited risk of valuation de-rating, which should lead to higher equity values [3][15]. - **AI Infrastructure Spending**: Anticipated to increase by **60%** over the next two years, with a **33%** growth specifically in 2026. This spending is a key driver of equity values and order backlogs for many Multi-Industry companies [8][20]. - **Macro Economic Factors**: Lower interest rates combined with increased AI infrastructure spending may lead to further multiple expansion in 2026, although there are risks of inflation and overheating in 2027 and beyond [5][40]. Stock Recommendations - **Upgrades**: DOV and EMR have been upgraded to "Buy" due to optimism regarding non-AI capex spending. DOV is expected to see organic growth after two years of challenges [6][10]. - **Downgrade**: ETN has been downgraded to "Neutral" due to limited margin expansion opportunities and a lack of positive revisions in the near term [6][13]. Financial Health Indicators - **Consumer and Corporate Balance Sheets**: U.S. household net worth is at a record **$176 trillion**, with liabilities at **11.9%** of net worth, below the long-term average of **14.5%**. This indicates strong financial health and limits stress on equity values [40][43]. - **Corporate Balance Sheets**: Net equity for U.S. corporates reached **$68 trillion** as of Q3 2025, the highest ever, suggesting strong capital deployment opportunities [46][47]. Capital Expenditure Insights - **Hyperscaler Capex**: Continued growth in data center capacity investment is expected, with a **35%** increase in planning stages noted in Q3 compared to Q1, implying an additional **$1.7 trillion** of capex [20][21]. - **Non-Hyperscaler Capex Recovery**: There is potential for recovery in non-AI capex, particularly in industrial and manufacturing sectors, which could benefit from favorable tax policies [26][33]. Market Sentiment and Future Outlook - **Gradual Recovery**: Companies are beginning to see signs of gradual recovery in industrial business, with positive sentiments from distribution channels and improved order volumes [32]. - **Consensus Earnings Forecast**: The consensus for earnings growth remains modest, with median EPS growth rates of **11-12%** for EE/MI companies over the next two years, reflecting a cautious outlook [71][72]. Additional Considerations - **Residential HVAC Market**: Limited growth potential is anticipated in residential HVAC shipments over the next three years due to excess shipments during 2020-2024 [59][63]. - **LTL Shipments**: Monitoring of less-than-truckload (LTL) volumes is crucial as they serve as early indicators of industrial activity, which remains weak due to high exposure to housing markets [53][54]. This comprehensive outlook indicates a positive trajectory for the Multi-Industry sector in 2026, driven by robust AI infrastructure spending and strong balance sheets, despite some caution regarding broader economic conditions and specific market segments.

Two of the world's top AI scientists now in this heated public debate over the state of the technology disagreeing on whether it can ever be as smart as humans or if we need a new type of AI entirely. Our dear DOS is digging into that in today's tech check. Morning D. >> Hey good morning Carl.So at its core this debate is really about whether the current AI buildout actually pays off. Yanlakan is one of the most influential and one of the most controversial minds in AI, a pioneer of modern neural networks, ...

IPO Market Trends - The IPO market may see significant changes in 2026, potentially prompting major AI players to go public [1] - Private AI companies like OpenAI and Anthropic may need to consider IPOs due to increasing capital expenditure demands [2] - By 2030, data centers supporting AI processing are projected to require over $5 trillion in capex [2] Financial Considerations - Public equity provides lenders with real-time valuation certainty, enabling companies to take on more debt at lower costs [4] - Suppliers and partners require long-term financing durability, often through 10 to 15-year contracts, favoring public companies [4] - If OpenAI, valued at $1 trillion, floated 10% of its shares, it would exceed the total amount raised by all 340 IPOs in the US this year [5] Private vs Public Markets - There's been a decrease in the availability of public shares over the past 20 years [5] - Washington has been exploring ways to allow retail and high-net-worth investors access to private companies before they go public [6] - Democratizing private markets aims to give individual investors access to company growth phases [6]

Economic Outlook - The economy is considered very healthy, with potential for a significant boom next year, contingent on lower interest rates to facilitate investment spending, particularly in infrastructure for factory construction [6][7] - Non-financial corporate productivity growth has risen by 35% in the last four quarters [6] - Tariffs have not had the anticipated negative effects, and lower rates are needed to strengthen interest-sensitive sectors, as inflation is a lagging indicator [7][8] - The market reflects confidence in current policies, indicated by tight credit spreads and strong performance in both bond and equity markets [17] Fiscal Policy & Investment - Full expensing for factories is permanent, which will spur a supply-side boom evident in GDP data, with further acceleration expected next year [5] - Capex grew nearly 15% in real terms in the first half of the year, the largest increase since 2011-2012, excluding the pandemic period, which typically precedes hiring cycles and manufacturing job growth [10] - The bill providing 100% expensing for factories, with a normal shelf life of nearly 40 years, allows full expensing in year one, effective until 2028 [11] Labor Market & Wages - Real wages fell, impacting consumer sentiment [13] - Blue-collar workers have seen a 16% annualized increase through November of this year, marking one of the largest increases in the last 60 years at the start of a new administration [15] - Rising participation in the job market and new highs in the stock market contradict claims of economic misery [18] Tax & Revenue - Revenue share of GDP is over 17%, with spending being the primary concern [20] - Maintaining low taxes on labor and capital is crucial for fostering growth, creating goods, services, industries, and jobs [24] - If the economy grows at 3%, approximately $4 trillion more in revenue could be generated compared to CBO predictions, benefiting the long-term budget outlook [24] Deficit & Debt - Deficit numbers have improved under the current administration [28] - The tax cuts and jobs act effectively paid for itself, considering CBO scoring and revenue outcomes [28]

Market Trends & Investment Themes - The market is experiencing ebbs and flows, with a resurgence in the AI sector [1] - The engagement of the US consumer and the performance of the holiday season are key factors to watch in early January [2] - AI is expected to remain a significant tailwind, contingent on capex investments from companies beyond the technology sector, including industrials and financials [4] - Healthcare sector price cuts may provide a tailwind [4] Small Cap vs Large Cap - Small caps are favored entering the year, particularly if economic growth strengthens, rates decrease, and liquidity is infused around tax time in April and May, potentially leading to strong performance in the first half of 2026 [5] - The recent rally in small caps has been primarily in lower-quality companies with low or no earnings [5] Interest Rates & Monetary Policy - At least one more interest rate cut is anticipated in the first quarter [6] - The Fed's actions in the second half of the year remain uncertain [6] - The potential for inflation to decrease may lead the Fed to adopt an easier monetary policy in the second half of the year [7] Global Markets - The US market continues to show significant strength [8] - Optimism surrounds the Japanese market, making developed markets excluding the US (Developed XUS) attractive [8] - Emerging markets (EM) are becoming more appealing, despite concerns about the Chinese consumer and real estate [8][9] - Korea is seen as offering opportunities in the next phase of the AI trade [9] - When considering EM exposure, diversification beyond China is recommended [10]