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"AI" Splits into Winners & Losers: Global Week Ahead
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Key Takeaways
What's the Takeaway of the AI Trade Splitting into Winners & Losers?
Euro Banks Have Traded Up Big. Is It Over?
Nonfarm Payrolls Wednesday and CPI Friday Are the Big Econ Reports This Week
What is going on in this Global Week Ahead?
Japan's snap election starts the week off
Two doses of JAN U.S. macro data (jobs & CPI) follow later
There will be more Q4 S&P500 earnings reports too
A slide in (some) tech shares suggest there won't be much down-time for traders in the coming week.
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) “AI” Stocks Split into Winners and Losers. Will Share Prices Collapse?
Cisco Systems (CSCO - Free Report) and Germany's Siemens Energy SMNEY report earnings on Wednesday.
They've benefited from the AI boom in different ways, but now Barclays says that trade is "seeing extreme dispersion.”
In other words, the market is sifting between the winners and losers with more conviction. The sensitivity to which companies are benefiting or suffering from AI disruption is evident in sliding software and data analytics stocks.
They have plunged as traders honed in on the existential threat posed by increasingly powerful AI models.
AI enablers, companies contributing to the global AI data center build-out, meanwhile, have fared better.
But with the specter of a bubble popping and markets near record highs, it would be wise to hold onto your hats.
(2) Will European Banks’ “Time in the Sun” Be Over Soon, Too?
European banks have been among the best performing stocks in the past 12 months with a more than +60% gain, aided by rising profitability, low loan defaults and a showering of shareholders with cash.
Britain's Barclays (BCS - Free Report) , NatWestNWG and Italy's UniCreditUNCRY, report 2025 earnings in coming days, following generally strong numbers already from Deutsche Bank (DB - Free Report) and BNP Paribas (BNPQY - Free Report) .
The French lender and Lloyds (LYG - Free Report) also lifted their key profitability targets.
But analysts warn the good times cannot last, especially if European economies slow. Spain's BBVA (BBVA - Free Report) saw a 7% drop in its shares on Thursday after it set aside 19% more in cash for loan losses in the fourth quarter than a year earlier.
As well as financial prospects, investors are looking for signs that bosses have an appetite to spend more of their excess capital on deals — such as Santander's recently announced $12.2 billion acquisition of U.S. lender Webster FinancialWBS.
(3) On Wednesday, the U.S. Gets a Delayed January Non-Farm Jobs Report
A double dose of major U.S. economic reports should give investors a critical view of the economy, after the releases were delayed a little by the recently ended three-day government shutdown.
The January non-farm payrolls report, now due on Wednesday, is expected to show an increase of 70,000 jobs, according to a Reuters poll. The Federal Reserve pointed to signs of stabilization in the labor market as it held rates steady last month, pausing its easing cycle.
Two days later, the January Consumer Price Index, one of the most closely watched measures for assessing inflation trends, is set to be published.
The data comes as investors gauge the impact of newly nominated Fed chair Kevin Warsh, who could take charge in time for the Fed's June meeting.
Markets currently price that meeting as the likely next time for a rate cut.
(4) On Thursday, the Munich Security Conference Gets Underway
The Munich Security Conference gets underway on Thursday. Now in its seventh decade, the annual gathering saw possibly its most consequential — and contentious — meeting in 2025 when a series of U.S. statements set the stage for a tectonic shift in the international order still underway today.
There is no shortage of hot geopolitical issues — from Iran to Ukraine and Greenland — while questions over the future role of NATO are looming large.
But the meeting looks to stretch beyond its usual scope: The European Central Bank is working on opening up access to euro liquidity to more countries — part of efforts to bolster the single currency's international role, sources told Reuters.
The announcement will likely come from ECB Chief Christine Lagarde, who will open a roundtable on trade dependencies at the conference.
(5) On Sunday, Japan Held Another Major Election
Japan heads to the polls on Sunday and Prime Minister Sanae Takaichi wants the nation of over 120 million people to hand her a stronger mandate to deliver on her promises of more spending.
The closely-watched lower house election is shaping up to be one of the most unpredictable in years, though polls point to Takaichi's Liberal Democratic Party gaining a majority.
A strong showing by the LDP would allow Takaichi to expand stimulus, which could heighten concerns about Japan's finances and push up government bond yields further in a selloff that could ripple out overseas.
Investors have also sold the yen. Its recent slide prompted suspected rate checks from Japan and the U.S. to stem its decline — which, if confirmed, would mark a rare, coordinated move.
Zacks #1 Rank (STRONG BUY) Stocks
Three major “AI” stocks lead our large cap #1 list this week.
But look closer…
Their Zacks Price, Consensus, and EPS Surprise charts are shocking:
(1) Western Digital (WDC - Free Report) : This is a $282 a share stock, with a market cap of $95.8 billion. It is found in the Zacks Computer-Storage Device industry. There is a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Western Digital Corp., headquartered in San Jose, CA, is a leading developer and manufacturer of data storage devices and solutions based on NAND flash and hard disk drive technologies.
It provides broad range of HDD and Flash storage solutions used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.
The acquisition of SanDisk (2016) enabled the company to venture into the flash drive storage technology space. The company also has a huge patent portfolio more than 33,000 active patents globally.
The company markets its products and solutions through its sales personnel, dealers, distributors, retailers, and subsidiaries.
Western Digital reported fiscal 2025 revenues of $9.5 billion. The company derives its revenue from Cloud, Client and Consumer end markets.
Revenues from the Cloud end market comprised 88% of total revenues for fiscal 2025. Revenues from the Client end market and the Consumer end market were 6% of total revenues each, respectively.
Western Digital mainly competes with companies like Intel, Micron, Samsung Electronics Co. Ltd., Seagate Technology and Toshiba Corp.
In February 2025, Western Digital completed the separation of its HDD and Flash businesses into two independent, publicly traded companies, each with a specific focus on its respective market.
With a deep understanding of memory and storage technology, the new SanDisk (SNDK - Free Report) is ready to meet market demands. It is well-equipped to take advantage of AI opportunities while maximizing the value of its products for both consumers and businesses.
(2) TE Connectivity (TEL - Free Report) : This is a $216 a share stock, with a market cap of $63.4B. It is found in the Zacks Electronics-Miscellaneous Components industry. There is a Zacks Value score of C, a Zacks Growth score of A, and a Zacks Momentum score of B.
Image Source: Zacks Investment Research
TE Connectivity is a global technology company that designs and manufactures connectivity and sensor solutions for a wide range of industries, including automotive, aerospace, defense, energy, and medical. With operations in over 130 countries, the company provides innovative products that enable connectivity across diverse sectors.
Based in Galway, Ireland the company focuses on emerging technologies such as 5G, electric vehicles, industrial automation, and smart cities to position itself at the forefront of connectivity advancements.
TE Connectivity reported net sales of $17.3 billion in fiscal 2025. It reports under the following two segments –
Transportation Solutions (54.4% of fiscal 2025 net sales): The segment caters to the needs of automotive, commercial transportation and sensors end markets. It offers sensor solutions and automotive connectivity solutions and products. Its electronic components comprising, connectors, wire and cable, circuit protection devices, heat shrink tubing and molded parts. It also provides application tooling and custom-engineered solutions for the aerospace, defense, and marine markets.
Industrial Solutions (45.6% of fiscal 2025 net sales): The segment caters to growing demand for the company’s products in the end markets – industrial equipment, energy, and aerospace, defense, oil and gas. TE Connectivity supplies electronic components, including connectors, relays, circuit protection devices, antennas and heat shrink tubing for industrial machinery, consumer devices, data communications and household appliance markets. Further, it also offers intelligent building and rail products.
(3) Teradyne (TER - Free Report) : This is a $300 a share stock, with a market cap of $47B. It is found in the Zacks Electronics-Miscellaneous Products industry. There is a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Headquartered in North Reading, MA, Teradyne designs, develops, manufactures and sells automated test equipment and robotics products.
Its automatic test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
Robotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) that are used by global manufacturing, logistics and industrial customers.
Teradyne's semiconductor test products are used both for wafer level and device package testing of semiconductor devices. Its product portfolio comprises the FLEX Test platform, J750 test system, Magnum test platform and ETS platform, each tailored for specific semiconductor testing needs.
Teradyne reports revenues primarily under four segments: Semiconductor Test, System Test, Robotics, and Wireless Test.
The company’s system Test segment is comprised of three business units:
Storage Test
Defense/Aerospace and
Production Board Test
Wireless Test business operates under the LitePoint brand name and provides test solutions utilized in the development and manufacturing of wireless devices and modules.
The Robotics segment comprises two business units: Universal Robots and Mobile Industrial Robots (MiR).
Universal Robots offers a variety of collaborative robot models, including the UR3, UR5, UR10, UR16 and UR20, each with different weight carrying capacity and arm reach
MiR offers four collaborative autonomous mobile robot models, MiR100, MiR250, MiR600 and MiR1350, each with a different payload carrying capacity
Teradyne competes globally with key rivals like Advantest, Cohu, Keysight, Test Research, SPEA, Rohde & Schwarz, Anritsu, KUKA, ABB, FANUC, Yaskawa, Techman, Doosan, AUBO, Omron, Fetch, OTTO Motors, Vecna, Seegrid and Balyo.
In 2025, the company reported revenues of $3.19 billion.
Key Global Macro
Two key macro reports are a delayed JAN U.S. nonfarm payroll report out Wednesday, and the U.S CPI data for JAN, out Friday.
On Monday, ECB President LaGarde gives a speech.
On Tuesday, ADP Employment Change, the 4-week average, gets updated. The prior reading is a weak 7.75K.
U.S. Retail Sales also come out. The DEC data should be up +0.5% m/m, closely tracking the prior NOV +0.6% m/m lift.
On Wednesday, the delayed U.S. Nonfarm Payroll report comes out. Consensus expects JAN adds come in at +70K. The prior DEC print was +50K.
On Thursday, U.S. Initial Jobless Claims come out. The consensus is for +235K, closely following a +231K print.
U.S. existing home sales also come out. I see JAN consensus is for 4.25M, which is a touch below the prior 4.35M DEC print.
On Friday, the U.S. CPI for JAN comes out. The broad CPI should be up +2.5% y/y, while the core CPI should be near the prior +2.6% y/y print.
Conclusion
On Feb. 6th, 2026, Zacks Research Director Sheraz Main put together a report on the “Mag 7.”
Is that group term stale now, in the “AI” era?
“Amazon (AMZN - Free Report) missed EPS estimates in its December-quarter report, but the business is otherwise literally firing on all cylinders.”
“The market’s negative reaction to the Amazon report wasn’t due to the EPS miss, but rather to management’s eye-popping capital spending budget for 2026, which coincided with renewed worries about the broader AI space and growing fears that this new technology could seriously erode the earnings power of legacy technology businesses like software.”
“The market’s reaction to Amazon is broadly in the same category as Alphabet'sGOOGL after its quarterly release, with the severity of Amazon’s ‘punishment’ reflecting investors’ shock at learning of management’s AI plans. Amazon plans to spend $200 billion in capital expenditures in 2026, up from $132 billion in 2025 and $83 billion in 2024. Amazon’s operating cash flows modestly exceeded its $132 billion capex outlays in 2025, but the company’s 2026 capex budget will most likely exceed its operating cash flows.”
“Before we learnt of these lofty spending plans, many in the market expected 2026 to be the capex peak for Amazon (Alphabet and others). But management’s commentary about the mission-critical nature of these outlays likely means that it may be premature to declare peak capex. Amazon shares are now down -8.8% over the past year, lagging the broader market’s +15.8% gain and Alphabet’s impressive +74.1% rise.”
“Amazon is doing great in its core businesses, with its cloud unit enjoying accelerating growth and coming out with the best growth in three years. Revenues in Amazon Web Services (AWS) increased +24% in 2025 Q4, which compares to year-over-year growth rates of +20% in Q3, +19% in Q2, and +17% in Q1. Backlog for the business increased +40% from the same period last year to $244 billion, with management describing a robust demand environment.”
“While Amazon remains the cloud leader, the Alphabet report showed accelerating momentum at the search giant’s Google Cloud business. Revenues for Google Cloud increased +48% from the same period last year in 2025 Q4, which compares to growth rates of +35%, +32%, and +28% in Q3, Q2, and Q1, respectively. The strong cloud gains at Amazon and Alphabet put the spotlight on Microsoft’s lack of momentum in this key business area.”
“At this stage in the Q4 reporting cycle, Nvidia (NVDA - Free Report) is the only Mag 7 member that has yet to report December-quarter results.”
“Nvidia is scheduled to report Q4 results on February 25th, with EPS and revenues for the period expected to be up +70.8% and +66.7% from the same period last year, respectively.”
“Combining the actual results for the 6 Magnificent 7 members that have reported already with estimates for Nvidia, total Q4-25 earnings for the group are expected to be:
Up +24.2% from the same period last year, on +18.9% higher revenues.
This would follow the group’s +28.3% earnings growth, on +18.1% revenue growth, in Q3-25.”
Enjoy your trading, across this February Global Week Ahead.
Warm Regards,
John Blank, PhD. Zacks Chief Equity Strategist and Economist
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"AI" Splits into Winners & Losers: Global Week Ahead
Key Takeaways
What is going on in this Global Week Ahead?
A slide in (some) tech shares suggest there won't be much down-time for traders in the coming week.
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) “AI” Stocks Split into Winners and Losers. Will Share Prices Collapse?
Cisco Systems (CSCO - Free Report) and Germany's Siemens Energy SMNEY report earnings on Wednesday.
They've benefited from the AI boom in different ways, but now Barclays says that trade is "seeing extreme dispersion.”
In other words, the market is sifting between the winners and losers with more conviction. The sensitivity to which companies are benefiting or suffering from AI disruption is evident in sliding software and data analytics stocks.
They have plunged as traders honed in on the existential threat posed by increasingly powerful AI models.
AI enablers, companies contributing to the global AI data center build-out, meanwhile, have fared better.
But with the specter of a bubble popping and markets near record highs, it would be wise to hold onto your hats.
(2) Will European Banks’ “Time in the Sun” Be Over Soon, Too?
European banks have been among the best performing stocks in the past 12 months with a more than +60% gain, aided by rising profitability, low loan defaults and a showering of shareholders with cash.
Britain's Barclays (BCS - Free Report) , NatWest NWG and Italy's UniCredit UNCRY, report 2025 earnings in coming days, following generally strong numbers already from Deutsche Bank (DB - Free Report) and BNP Paribas (BNPQY - Free Report) .
The French lender and Lloyds (LYG - Free Report) also lifted their key profitability targets.
But analysts warn the good times cannot last, especially if European economies slow. Spain's BBVA (BBVA - Free Report) saw a 7% drop in its shares on Thursday after it set aside 19% more in cash for loan losses in the fourth quarter than a year earlier.
As well as financial prospects, investors are looking for signs that bosses have an appetite to spend more of their excess capital on deals — such as Santander's recently announced $12.2 billion acquisition of U.S. lender Webster Financial WBS.
(3) On Wednesday, the U.S. Gets a Delayed January Non-Farm Jobs Report
A double dose of major U.S. economic reports should give investors a critical view of the economy, after the releases were delayed a little by the recently ended three-day government shutdown.
The January non-farm payrolls report, now due on Wednesday, is expected to show an increase of 70,000 jobs, according to a Reuters poll. The Federal Reserve pointed to signs of stabilization in the labor market as it held rates steady last month, pausing its easing cycle.
Two days later, the January Consumer Price Index, one of the most closely watched measures for assessing inflation trends, is set to be published.
The data comes as investors gauge the impact of newly nominated Fed chair Kevin Warsh, who could take charge in time for the Fed's June meeting.
Markets currently price that meeting as the likely next time for a rate cut.
(4) On Thursday, the Munich Security Conference Gets Underway
The Munich Security Conference gets underway on Thursday. Now in its seventh decade, the annual gathering saw possibly its most consequential — and contentious — meeting in 2025 when a series of U.S. statements set the stage for a tectonic shift in the international order still underway today.
There is no shortage of hot geopolitical issues — from Iran to Ukraine and Greenland — while questions over the future role of NATO are looming large.
But the meeting looks to stretch beyond its usual scope: The European Central Bank is working on opening up access to euro liquidity to more countries — part of efforts to bolster the single currency's international role, sources told Reuters.
The announcement will likely come from ECB Chief Christine Lagarde, who will open a roundtable on trade dependencies at the conference.
(5) On Sunday, Japan Held Another Major Election
Japan heads to the polls on Sunday and Prime Minister Sanae Takaichi wants the nation of over 120 million people to hand her a stronger mandate to deliver on her promises of more spending.
The closely-watched lower house election is shaping up to be one of the most unpredictable in years, though polls point to Takaichi's Liberal Democratic Party gaining a majority.
A strong showing by the LDP would allow Takaichi to expand stimulus, which could heighten concerns about Japan's finances and push up government bond yields further in a selloff that could ripple out overseas.
Investors have also sold the yen. Its recent slide prompted suspected rate checks from Japan and the U.S. to stem its decline — which, if confirmed, would mark a rare, coordinated move.
Zacks #1 Rank (STRONG BUY) Stocks
Three major “AI” stocks lead our large cap #1 list this week.
But look closer…
Their Zacks Price, Consensus, and EPS Surprise charts are shocking:
(1) Western Digital (WDC - Free Report) : This is a $282 a share stock, with a market cap of $95.8 billion. It is found in the Zacks Computer-Storage Device industry. There is a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Western Digital Corp., headquartered in San Jose, CA, is a leading developer and manufacturer of data storage devices and solutions based on NAND flash and hard disk drive technologies.
It provides broad range of HDD and Flash storage solutions used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.
The acquisition of SanDisk (2016) enabled the company to venture into the flash drive storage technology space. The company also has a huge patent portfolio more than 33,000 active patents globally.
The company markets its products and solutions through its sales personnel, dealers, distributors, retailers, and subsidiaries.
Western Digital reported fiscal 2025 revenues of $9.5 billion. The company derives its revenue from Cloud, Client and Consumer end markets.
Revenues from the Cloud end market comprised 88% of total revenues for fiscal 2025. Revenues from the Client end market and the Consumer end market were 6% of total revenues each, respectively.
Western Digital mainly competes with companies like Intel, Micron, Samsung Electronics Co. Ltd., Seagate Technology and Toshiba Corp.
In February 2025, Western Digital completed the separation of its HDD and Flash businesses into two independent, publicly traded companies, each with a specific focus on its respective market.
With a deep understanding of memory and storage technology, the new SanDisk (SNDK - Free Report) is ready to meet market demands. It is well-equipped to take advantage of AI opportunities while maximizing the value of its products for both consumers and businesses.
(2) TE Connectivity (TEL - Free Report) : This is a $216 a share stock, with a market cap of $63.4B. It is found in the Zacks Electronics-Miscellaneous Components industry. There is a Zacks Value score of C, a Zacks Growth score of A, and a Zacks Momentum score of B.
Image Source: Zacks Investment Research
TE Connectivity is a global technology company that designs and manufactures connectivity and sensor solutions for a wide range of industries, including automotive, aerospace, defense, energy, and medical. With operations in over 130 countries, the company provides innovative products that enable connectivity across diverse sectors.
Based in Galway, Ireland the company focuses on emerging technologies such as 5G, electric vehicles, industrial automation, and smart cities to position itself at the forefront of connectivity advancements.
TE Connectivity reported net sales of $17.3 billion in fiscal 2025. It reports under the following two segments –
Transportation Solutions (54.4% of fiscal 2025 net sales): The segment caters to the needs of automotive, commercial transportation and sensors end markets. It offers sensor solutions and automotive connectivity solutions and products. Its electronic components comprising, connectors, wire and cable, circuit protection devices, heat shrink tubing and molded parts. It also provides application tooling and custom-engineered solutions for the aerospace, defense, and marine markets.
Industrial Solutions (45.6% of fiscal 2025 net sales): The segment caters to growing demand for the company’s products in the end markets – industrial equipment, energy, and aerospace, defense, oil and gas. TE Connectivity supplies electronic components, including connectors, relays, circuit protection devices, antennas and heat shrink tubing for industrial machinery, consumer devices, data communications and household appliance markets. Further, it also offers intelligent building and rail products.
(3) Teradyne (TER - Free Report) : This is a $300 a share stock, with a market cap of $47B. It is found in the Zacks Electronics-Miscellaneous Products industry. There is a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Headquartered in North Reading, MA, Teradyne designs, develops, manufactures and sells automated test equipment and robotics products.
Its automatic test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries.
Robotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) that are used by global manufacturing, logistics and industrial customers.
Teradyne's semiconductor test products are used both for wafer level and device package testing of semiconductor devices. Its product portfolio comprises the FLEX Test platform, J750 test system, Magnum test platform and ETS platform, each tailored for specific semiconductor testing needs.
Teradyne reports revenues primarily under four segments: Semiconductor Test, System Test, Robotics, and Wireless Test.
The company’s system Test segment is comprised of three business units:
Wireless Test business operates under the LitePoint brand name and provides test solutions utilized in the development and manufacturing of wireless devices and modules.
The Robotics segment comprises two business units: Universal Robots and Mobile Industrial Robots (MiR).
Teradyne competes globally with key rivals like Advantest, Cohu, Keysight, Test Research, SPEA, Rohde & Schwarz, Anritsu, KUKA, ABB, FANUC, Yaskawa, Techman, Doosan, AUBO, Omron, Fetch, OTTO Motors, Vecna, Seegrid and Balyo.
In 2025, the company reported revenues of $3.19 billion.
Key Global Macro
Two key macro reports are a delayed JAN U.S. nonfarm payroll report out Wednesday, and the U.S CPI data for JAN, out Friday.
On Monday, ECB President LaGarde gives a speech.
On Tuesday, ADP Employment Change, the 4-week average, gets updated. The prior reading is a weak 7.75K.
U.S. Retail Sales also come out. The DEC data should be up +0.5% m/m, closely tracking the prior NOV +0.6% m/m lift.
On Wednesday, the delayed U.S. Nonfarm Payroll report comes out. Consensus expects JAN adds come in at +70K. The prior DEC print was +50K.
On Thursday, U.S. Initial Jobless Claims come out. The consensus is for +235K, closely following a +231K print.
U.S. existing home sales also come out. I see JAN consensus is for 4.25M, which is a touch below the prior 4.35M DEC print.
On Friday, the U.S. CPI for JAN comes out. The broad CPI should be up +2.5% y/y, while the core CPI should be near the prior +2.6% y/y print.
Conclusion
On Feb. 6th, 2026, Zacks Research Director Sheraz Main put together a report on the “Mag 7.”
Is that group term stale now, in the “AI” era?
“Amazon (AMZN - Free Report) missed EPS estimates in its December-quarter report, but the business is otherwise literally firing on all cylinders.”
“The market’s negative reaction to the Amazon report wasn’t due to the EPS miss, but rather to management’s eye-popping capital spending budget for 2026, which coincided with renewed worries about the broader AI space and growing fears that this new technology could seriously erode the earnings power of legacy technology businesses like software.”
“The market’s reaction to Amazon is broadly in the same category as Alphabet's GOOGL after its quarterly release, with the severity of Amazon’s ‘punishment’ reflecting investors’ shock at learning of management’s AI plans. Amazon plans to spend $200 billion in capital expenditures in 2026, up from $132 billion in 2025 and $83 billion in 2024. Amazon’s operating cash flows modestly exceeded its $132 billion capex outlays in 2025, but the company’s 2026 capex budget will most likely exceed its operating cash flows.”
“Before we learnt of these lofty spending plans, many in the market expected 2026 to be the capex peak for Amazon (Alphabet and others). But management’s commentary about the mission-critical nature of these outlays likely means that it may be premature to declare peak capex. Amazon shares are now down -8.8% over the past year, lagging the broader market’s +15.8% gain and Alphabet’s impressive +74.1% rise.”
“Amazon is doing great in its core businesses, with its cloud unit enjoying accelerating growth and coming out with the best growth in three years. Revenues in Amazon Web Services (AWS) increased +24% in 2025 Q4, which compares to year-over-year growth rates of +20% in Q3, +19% in Q2, and +17% in Q1. Backlog for the business increased +40% from the same period last year to $244 billion, with management describing a robust demand environment.”
“While Amazon remains the cloud leader, the Alphabet report showed accelerating momentum at the search giant’s Google Cloud business. Revenues for Google Cloud increased +48% from the same period last year in 2025 Q4, which compares to growth rates of +35%, +32%, and +28% in Q3, Q2, and Q1, respectively. The strong cloud gains at Amazon and Alphabet put the spotlight on Microsoft’s lack of momentum in this key business area.”
“At this stage in the Q4 reporting cycle, Nvidia (NVDA - Free Report) is the only Mag 7 member that has yet to report December-quarter results.”
“Nvidia is scheduled to report Q4 results on February 25th, with EPS and revenues for the period expected to be up +70.8% and +66.7% from the same period last year, respectively.”
“Combining the actual results for the 6 Magnificent 7 members that have reported already with estimates for Nvidia, total Q4-25 earnings for the group are expected to be:
Enjoy your trading, across this February Global Week Ahead.
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist