■ Microsoft (MSFT)
Guidance Pressures Shares: Microsoft shares fell 7% despite beating Q2 revenue ($81.27B) and adjusted EPS ($4.14) expectations.
Cloud Concerns: Investor sentiment was dampened by a slowdown in cloud growth and disappointing operating margin guidance for Q3, fueling concerns over the speed of AI monetization relative to massive infrastructure spending.
■ Amazon (AMZN)
Oppenheimer's Top Pick: Amazon was named a "Mega-cap Top Pick" with a price target hike to $315.
AWS Acceleration: Analysts project AWS revenue growth of 24% in 2026, driven by deeper integration with AI startup Anthropic.
Efficiency Drivers: The expansion of robotics and automation is expected to boost e-commerce margins significantly. Replacing 5% of logistics staff with robots could lead to $7 billion in cost savings by 2027.
Data Controversy: The company is under investigation following reports of illegal content found within AI training datasets. While Amazon claims the data was removed before training, the NCMEC pointed out insufficient source reporting, raising questions about internal oversight.
■ Meta Platforms (META)
Strong Surprise: Meta shares surged as Q1 revenue guidance ($53.5B–$56.5B) crushed consensus ($51.41B).
Q4 Results: Reported Q4 adjusted EPS of $8.88 on revenue of $59.89B, both exceeding expectations. However, Reality Labs' operating loss was wider than anticipated.
■ ASML (ASML)
EUV Dominance: ASML remains the sole producer of EUV lithography equipment essential for advanced chipmaking, commanding a 90% market share.
Bullish Views: BofA noted ASML’s impending monopoly in next-gen EUV fields, while Morningstar emphasized that ASML equipment contributes to 99% of global semiconductor production.
■ Lockheed Martin (LMT)
Upbeat Outlook: Forecasted 2026 revenue of $77.5B–$80B and EPS of $29.35–$30.25, both surpassing market estimates.
Geopolitical Demand: Ongoing conflicts in the Middle East and Ukraine have surged weapon demand. Lockheed recently signed a 7-year contract to triple Patriot PAC-3 production to 2,000 units annually.
F-35 Record: Delivered a record 191 F-35 fighter jets in 2025. However, uncertainty remains regarding capital returns due to a recent executive order linking dividends and buybacks to delivery schedules.
[Earnings & Featured Stocks]
■ IBM (IBM): Surged on a Q4 beat (EPS $4.52, Revenue $19.69B) and a generative AI backlog surpassing $12.5 billion.
■ Royal Caribbean (RCL): Jumped 7% on strong Q1 EPS guidance ($3.18–$3.28).
■ Southwest Airlines (LUV): Rose on a strong 2026 EPS forecast of at least $4.00, well above the $3.19 consensus.
■ Mastercard (MA): Beat estimates with an adjusted EPS of $4.76, supported by resilient consumer spending and a 7% jump in Gross Dollar Volume (GDV).
■ Caterpillar (CAT): Q4 revenue rose 18% to $19.1B, but margins faced pressure, with GAAP EPS decreasing YoY.
■ ServiceNow (NOW): Plunged over 5% despite a Q4 beat, as concerns over AI’s impact on software profitability weighed on shares.
■ Honeywell (HON): Rose 1.3% in the pre-market after a mixed Q4; adjusted EPS ($2.59) beat but revenue missed.
■ Lululemon (LULU): Brand trust took a hit following transparency issues with "Get Low" tights, leading to internal crisis meetings and pressure from activist investors for board changes.
■ Rare Earth Sector Plunge
Shares plummeted across the sector following reports that the U.S. government may withdraw its price guarantee plans for domestic rare earth projects.
Notable Declines: USA Rare Earth (-10.5%), MP Materials (-5.8%), Albemarle (-2.3%).
[Analyst Upgrades & Updates]
■ Johnson & Johnson (JNJ): Morgan Stanley upgraded to Overweight ($262 PT), citing a strong new product cycle and a growth outlook (~12% EPS growth through 2030) that outpaces peers.
■ GE Aerospace (GE): Citi named it a Top Pick with a $380 PT, suggesting a potential path to a $1 trillion market cap within 5–10 years driven by double-digit growth and margin expansion.
■ Boeing (BA): RBC Capital and JPMorgan raised targets (to $275 and $270, respectively), viewing recent earnings as a "bridge" to normalized free cash flow exceeding $10 billion.
■ UPS (UPS): HSBC upgraded to Buy ($125 PT), expecting significant margin improvement later in 2026 as Amazon volume impacts and tariff disruptions ease.
■ UnitedHealth Group (UNH): RBC and Oppenheimer lowered targets (to $361 and $385) citing uncertainty following weak Medicare Advantage rate proposals.
■ Allbirds (BIRD): Announced a shift to an online-only strategy in the U.S., closing all full-price brick-and-mortar stores to improve profitability.
