Core Viewpoint - The article discusses the growing concern among investors that advancements in AI technology may disrupt traditional business software models, leading to a selloff in shares of software companies [1]. Group 1: Market Reaction - Investors are increasingly selling shares of companies that provide enterprise software, fearing that AI capabilities from firms like Anthropic could negatively impact these businesses [1]. - The selloff of business software stocks has been ongoing, indicating a significant shift in market sentiment towards the software industry [1]. Group 2: Industry Trends - For over 15 years, business software has been a dominant force across various industry sectors, showcasing relentless advancement [1]. - The emergence of AI technologies is perceived as a potential threat to the established business software landscape, prompting concerns about the sustainability of current business models [1].

Core Viewpoint - NetApp Inc. is currently considered one of the most undervalued quality stocks, despite mixed analyst ratings and market conditions [1][5]. Group 1: Analyst Ratings - Morgan Stanley downgraded NetApp from Equal Weight to Underweight, reducing the price target from $117 to $89, citing the slowest hardware budget growth in 15 years [1][2]. - Conversely, Goldman Sachs initiated coverage of NetApp with a Buy rating and a price target of $128, highlighting specific high-growth areas within media and data storage categories [3]. Group 2: Market Conditions - A CIO survey indicated a significant slowdown in IT hardware budget growth, leading to a more defensive stance on IT hardware investments [2]. - The broader external storage market is projected to grow modestly at 4% year-over-year in 2025, but NetApp is expected to maintain its leadership in the all-flash storage market [3]. Group 3: Company Overview - NetApp provides a range of enterprise software, systems, and services aimed at transforming data infrastructures across various regions, including the US, Canada, and Europe [5]. - The company operates in two segments: Hybrid Cloud and Public Cloud [5].

After a strong rally, Broadcom (AVGO) stock has come under pressure, dropping 20% from its 52-week high of $414.61. Broadcom is a key supplier of semiconductors, enterprise software, and security solutions, and the company continues to benefit from solid demand tailwinds. In particular, the company's artificial intelligence (AI) focused semiconductor products are seeing significant momentum, while adoption of VMware Cloud Foundation (VCF) has been strengthening its infrastructure software business. The m ...

Core Viewpoint - Palantir is expected to report strong fourth quarter earnings, with significant growth in both earnings per share and revenue, driven by robust sales to US businesses and government sectors [1][2][3]. Group 1: Earnings Expectations - Earnings per share are projected to increase to $0.23 from $0.14 year-over-year [1]. - Revenue is anticipated to surge over 60% to $1.3 billion [1]. Group 2: Revenue Breakdown - Revenue from commercial US sales is expected to rise nearly 124% year-over-year to $479 million [2]. - Sales to the US government are projected to account for approximately 40% of total revenue, with an expected contribution of $522 million, reflecting a nearly 52% increase from the previous year [3]. Group 3: Market Sentiment and Analyst Ratings - Despite strong earnings expectations, Palantir's stock has faced pressure due to concerns over valuation and broader market trends, with shares down over 10% in the past month [4]. - Analyst Louie DiPalma upgraded Palantir to Outperform, citing that the recent sell-off has made the valuation more reasonable compared to peers in the AI sector [5]. - The company's government contracts, despite controversy, are expected to contribute positively to the December quarter [6].

Industry Overview - Software stocks are experiencing a significant sell-off, with the iShares Expanded Tech-Software Sector ETF (IGV) dropping approximately 5% in morning trading, marking its largest one-day decline since last April [2] - The ETF is now down about 21% from its recent high, indicating that the software industry has entered bear-market territory [2] Company Performance - ServiceNow reported fourth-quarter earnings that exceeded Wall Street expectations, yet its shares fell more than 11% on the day of the announcement [2] - Analysts from Morgan Stanley commented that while ServiceNow's performance was good, it was not sufficient to change the negative narrative surrounding incumbent application vendors [3] Market Sentiment - Investor concerns regarding the potential impact of artificial intelligence on traditional software business models are overshadowing positive earnings reports [3] - The sell-off has also affected major tech companies, with Microsoft experiencing a 10% decline after reporting a slowdown in cloud growth and providing softer-than-expected guidance for operating margins [4]

Polen Capital Management Llc released its "Polen Focus Growth Strategy" Q4 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, the Polen Focus Growth strategy delivered a -1.37% gross return, underperforming the Russell 1000 Growth Index (+1.12%) and the S&P 500 (+2.66%), as concentrated mega‑cap leadership and AI valuation concerns drove market volatility. The fund faced headwinds from market rotation and valuation pressures but remained disciplined in its investment approach, fo ...

Roper Technologies (NasdaqGS:ROP) Q4 2025 Earnings call January 27, 2026 08:00 AM ET Company ParticipantsBrad Reback - Managing DirectorBrent Thill - JefferiesDean Dray - Managing DirectorJason Conley - EVP and CFOJoseph Giordano - Managing DirectorJoshua Tilton - DirectorNeil Hunn - President and CEOTerry Tillman - Managing DirectorZack Moxcey - VP and Head of Investor RelationsConference Call ParticipantsClarke Jeffries - VP and Senior Research AnalystDylan Baker - AnalystGeorge Kurosawa - Equity Research ...

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $2.06 billion, up 10% year-over-year, with acquisitions contributing 5% and organic growth of 4% [9] - EBITDA reached $818 million, also up 10% over the prior year, with a core EBITDA margin expansion of 60 basis points [9][14] - For the full year 2025, total revenue was $7.9 billion, reflecting a 12% increase, with acquisitions contributing nearly 7% growth [13] - Free cash flow for 2025 was nearly $2.5 billion, up 8%, representing 31% of revenue [15] Business Line Data and Key Metrics Changes - Application software revenue grew 10% in Q4, with organic growth of 4% and EBITDA margins expanding to 42.2% [10] - Network software revenue increased by 14% in Q4, with organic growth of 5%, although margins decreased to 52.8% due to recent acquisitions [11] - Tech segment revenue grew 6% in Q4, with organic growth of 5% and margins holding flat at 34.8% [12] - For the full year, application software revenue grew by 16% in total, with organic revenue growth of 5% [18] Market Data and Key Metrics Changes - The government contracting market remains challenging, impacting Deltek's performance, particularly in perpetual license revenue [11][19] - The freight market experienced a recession throughout 2025, affecting DAT's performance, although the company is evolving into a more automated marketplace [23] Company Strategy and Development Direction - The company is focused on long-term sustainable growth, with a commitment to investing in AI product development and enhancing operational execution [5][6] - Capital allocation strategy includes deploying $3.3 billion towards high-quality vertical software acquisitions and opportunistic share repurchases [8][30] - The company anticipates remaining active in M&A while maintaining discipline on pricing and business quality [16][30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding improvements in the Deltek segment, contingent on government appropriations and market conditions [11][19] - The outlook for 2026 includes expectations for organic growth in the higher end of the mid-singles range, with a conservative approach to guidance [22][28] - AI is viewed as a significant growth driver, with plans to commercialize AI-related products across various business segments [54] Other Important Information - The company has a robust M&A pipeline and substantial financial flexibility, with over $6 billion in capacity for capital deployment in 2026 [16][30] - The company is not assuming a meaningful revenue uplift from AI development in its guidance but views it as an incremental upside [28] Q&A Session Summary Question: What is included in the 2026 guidance for Deltek and how is the company protecting against potential government shutdowns? - Management is not assuming improvement in the Deltek segment for 2026, citing lower organic growth due to perpetual license revenue issues [36] Question: What needs to happen for ProCare to meet expectations? - Management indicated that the primary issue is the slow implementation of software and payments, which is being addressed [38] Question: What segments of government appropriations would significantly impact Deltek? - Management highlighted that appropriations heavy on Defense and DHS funding would positively impact Deltek's customers [43] Question: What is the expected capital deployment for 2026? - Management stated that while there is a $6 billion capacity for capital deployment, the focus will be on high-quality acquisitions rather than a set budget [46] Question: When will the company quantify AI's impact on revenue? - Management expressed that while they aim to report AI-related revenue, they will not "AI wash" their revenue streams and expect AI to be a meaningful growth driver [54]

Core Viewpoint - Strategy, formerly known as MicroStrategy, has transitioned from a data analytics software company to the world's largest corporate holder of Bitcoin, accumulating significant assets in the cryptocurrency market over the past five and a half years [1][2]. Group 1: Bitcoin Investment Strategy - The company began accumulating Bitcoin in August 2020, shifting its focus from its stagnant software business to capitalize on the expected rise in Bitcoin's value [2]. - Bitcoin's price has increased approximately 670% since the company's first disclosed purchase, while Strategy's stock has surged around 1,100% [3]. - As of now, the company has invested $53.9 billion to acquire 709,715 Bitcoins, which are valued at $63.2 billion, exceeding its current enterprise value of $61.3 billion, indicating that its stock may be undervalued [3]. Group 2: Future Plans and Financial Strategy - In late 2024, Strategy announced a "21/21" plan to raise $42 billion, comprising $21 billion in equity and $21 billion in fixed income securities, aimed at funding future Bitcoin purchases [4]. - The company intends to maintain its enterprise software business, which has seen annual revenue declines for the past three years, to generate recurring revenues and cash for Bitcoin acquisitions without investing in new R&D or marketing [5]. - By retaining its software business, Strategy can issue convertible notes and raise capital at lower rates compared to Bitcoin trusts or ETFs, making it a more attractive investment option for institutional investors [6]. Group 3: Risks and Rewards - Strategy's significant investment in Bitcoin has yielded positive results over the past five and a half years, but the company's all-in approach could either lead to substantial gains or potential setbacks [7].

Market Overview - The stock market experienced volatility over the past month, influenced by geopolitical events and tariff discussions [1] - The S&P 500 and Nasdaq saw gains of 0.8% and 0.7% respectively from December 15 to the recent close [1] Top Performing Stocks - **Qnity Electronics**: Increased by 30.1%, driven by strong demand in the semiconductor sector and positive earnings from Taiwan Semiconductor Manufacturing [1] - **Boeing**: Rose by 22.6%, supported by new orders from Ethiopian Airlines and outselling Airbus for the first time since 2018 [1] - **Texas Roadhouse**: Gained 14.1%, with expectations of improved consumer spending due to tax refunds, despite previous margin pressures from cattle inflation [1] Underperforming Stocks - **Salesforce**: Declined by 15.5%, facing challenges from AI-driven disruptions that threaten its business model, although the CEO remains optimistic about AI's role [1] - **CrowdStrike**: Fell by 11.7% after reports of a ban on its software in China due to national security concerns, but the company’s acquisition of SGNL for $740 million is seen as a positive move [1] - **Apple**: Decreased by 11%, attributed to rising memory costs and a shift away from large tech stocks, though a new AI partnership with Alphabet is viewed positively [1]