News of the Week (February 2 - 6, 2026)
Photo by Roman Kraft / Unsplash

News of the Week (February 2 - 6, 2026)

8 min read

Almost all of this week’s content was already sent:

Next week, I'll be sending earnings reviews on Robinhood, Shopify and Datadog. I'll also be sending coverage of the Starbucks Investor Day.

Table of Contents

1. SoFi (SOFI) – Investor Letter and More

SoFi’s IR team posted a letter detailing the two capital raises from last year and SoFi’s plans for the proceeds. It was all a repeat of previous conversation on their earnings calls that we’ve already covered. They raised $3.3B to pay off the rest of their warehouse debt and add more flexibility to pursue their long-term growth roadmap. As I talked about in the review, this is the rest of their warehouse credit, so future capital raises to optimize the balance sheet are much less likely. I liked both of these raises, as they bolstered tangible book value (TBV) per share by eliminating expensive debt and the coinciding net interest income boost. Still, these moves for a battleground stock like SoFi naturally create noise and speculation from the skeptics, so I’m glad they will not have this ammo going forward.

In other news, the EVP of SoFi’s Borrow unit boosted his stake by 2% via a $100,000 open market purchase this week.

Lastly, comments from SoFi’s Liz Young led to speculation over SoFi entering the prediction market space. I understand the temptation, but I don’t love this and hope they exclude sports if they do make the decision. SoFi’s aim to “get your money right” is not supported by letting their customers bet on Wolverines moneyline with their retirement funds. That does the complete opposite of what SoFi is trying to achieve and would be counterproductive, in my opinion. There is no formal news on an imminent product launch, and I hope there isn’t one in the future. There are so many things it can do to find growth in ways that take care of its members rather than prey on them.

Leave sports gambling to the books that at least are being honest about the products they’re offering consumers.

JP Morgan upgraded SoFi to buy after earnings and the other sell-siders maintained their ratings.

2. Software Sector Update

My views on software winners and losers emerging from AI disruption have not changed. Still, it was another ugly week for the sector, so I figured I’d include some quick thoughts, as I know these names are on everyone’s mind.

First of all, sentiment has not brightened at all. The historically oversold levels we’ve been seeing over the last several weeks have gotten even more extreme. Hedge fund software allocations have reached their lowest levels ever at 4%. Revenue multiples are at decade lows for the overall sector, while FCF multiples are at 19x. That is 7 turns lower than at any point in the last decade, per Clouded Judgement. The Goldman data I shared last week showing software vs. chips exposure at 7+ year lows has only gotten more stretched since then.

We do not know where the bottom is. We can’t possibly know. At the same time, these are the signs that generally emerge when seller exhaustion is near. Investors are panicking regardless of the business model, competitive durability or even great quarterly results and continuing to indiscriminately sell anything labeled “software.” Anthropic’s CEO can say "software engineering will be obsolete within 12 months” and people will automatically believe him despite the company having 23 open software engineering roles currently on its website. I hope these people know they’ll be getting fired soon if they take the job (I say sarcastically). 

Anthropic and OpenAI have garnered gigantic valuations and are still incinerating cash. They need to overpromise and overexcite to attract capital market dollars to fund their roadmaps and justify their implied multiples. They need to make outlandish claims like these. They need to create demos that supposedly replace LegalZoom and Thomson Reuters and eventually all software, while their agents deeply pull from these same software tools just to power the workflows everyone is terrified of. The market’s current mindset? If agents are accelerating usage of software… that’s a terrible thing. Irrational and contradictory are the ways to describe this.

Yes, small point solutions or tools used to automate small and specific subsections of work may be at risk. Monday.com has been an example many are picking on and that makes sense to me. Their platform does a lot of human workflow automation, so the valuable signal and utility within those workflows can be shared more readily and effectively. They’re less so in the business of creating automation that makes each actual workflow better. They just don’t really provide deep value beyond creating a slicker means of spreading and organizing this information.

To better defend against disruption, companies need to allow their customers to access more of this value-rich data. They need to make sure the IT and other workloads have improved instead of solely being the means of making the value sharing interface better.

To me… “data is the new oil” is more true than ever. Companies that have giant platforms with heavy traffic have this data, and have the partner and product integrations that the asset naturally attracts. This promotes interwoven understanding and intuition that is very hard to move or emulate elsewhere. This is called “Data Gravity” by some. I really like that term as I think it’s very fitting. This gravity is the byproduct of years and years of successful selling and innovation and cannot be “vibe coded.” Scale and size create a heavier and heavier “pull” from other companies to mesh their data, apps and workloads with larger ecosystems. The big get bigger. Platforms that cohesively bring together insight, partners and customers to actually run core software applications (not just an orchestrator or a wrapper) will be the best positioned going forward, in my opinion.

AI natives without this data and experience cannot match the edge case mastery that world-class platforms have built. That’s especially true when this edge case mastery extends to more parts of a client’s operations and places a software vendor as the overarching “System of Record” (a popular buzz phrase being thrown around a lot right now). Still, these AI darlings can create great demos that mimic pieces of it and freak everyone out. That’s what’s happening right now.

Those are the firms I think will win. The ServiceNows of the world that don’t just automate cross-department collaboration. They also use their mountains of proprietary data and know-how to make each individual piece of those workflows more productive across virtually every company category. The CrowdStrikes of the world with giant platforms accomplishing something similar on the security side with their own data network effect. These companies touch more parts of a business and cross-sell more tools to naturally enhance stickiness. Companies embodying these themes are the business I view as the safest amid this ugly stretch for software. The “Systems of Record” that interoperably do more for their customers and utilize the data treasure chest that follows.

And while investors panic over seat growth compression stemming from AI, they’re doing so without considering the explosion in machine-based agents that are already showing clear ways to be monetized. Better outcomes like a 20% boost to sales conversion, a 10% reduction in churn due to better service or a 5% boost to security coverage will all remain monetizable and powerful offsets to any seat-based headwind software companies see. And by the way, these headwinds have been immaterial to date for all of the software names in my portfolio. All of this is to say that I continue to believe pockets of software are fine and I continue to lean into those names. Max readers, you know exactly which ones I’m talking about. 

It’s funny… markets are convinced that AI is a waste of money as they punish mega-caps for big CapEx guidance. But? They’re also convinced that this waste of money will still kill trillions of dollars in software market cap. Again… silly. I do not know when this silliness will end. I don’t know how much more evidence Mr. Market needs to get comfortable with deciding not every software company is dead. I just know that if the evidence remains strong and healthy, I will remain bullish and will opportunistically accumulate.

Atlassian (TEAM) Earnings Data from this week:

  • Q2 revenue was 3% ahead of estimates & guidance. 
    • 26% Q2 cloud revenue growth vs. 22.5% growth guidance. 20% data center growth vs. 17% growth guidance.
  • Q2 profits & margins:
    • 87.5% GPM vs. 87% margin guidance & 86.9% margin estimates.
    • 27% EBIT margin vs. 24.6% margin estimates and 24.5% margin guidance. EBIT dollars 13% ahead of consensus.
    • $1.22 in EPS beat $1.14 estimates by $0.08.
  • Q3 Guidance:
    • Revenue guidance for next quarter is 0.5% ahead of expectations. 27.5% operating margin guidance is better than 27.1% margin expectations.
  • Annual guidance:
    • It now sees 22% Y/Y revenue growth for FY 2026 vs. 21% previously. It raised 22.5% annual cloud growth guidance to 24.3% growth. It maintained 20% Y/Y data center growth guidance. It raised GPM guidance from 86.5% to 87%, beating 86.3% guidance.
  • The FCF multiple has moved from 43x to 14x (yes I know a lot of stock comp but still) in one year. Estimates have been stable throughout that period.

3. Rubrik (RBRK) – Preliminary Results & Leadership

Rubrik’s President of Global Sales & Field Operations is leaving for another position. We'll learn soon what that is. That role is being re-titled as Chief Revenue Officer and Jesse Green has been internally promoted to assume it. He is currently the President of Rubrik Americas and will "lead the company's global revenue organization to continue to scale & accelerate rapid growth & industry leadership." Green was the North America SVP for MongoDB before joining Rubrik a few years ago.

They also told us they exceeded all guidance metrics for Q4 as part of this release. Why did they mention that? Not sure. Maybe because they see how horrible sentiment is for their sector and wanted to avoid people jumping to erroneous conclusions. Estimates were right in line with their guidance on revenue and FCF, so those are beats. We just don't know how large. EPS analysts were already expecting a beat. Good news.

“This is an exciting moment in time for Rubrik. Following our record third quarter, we just delivered a very strong fourth quarter with preliminary financial results exceeding all guided metrics” – CEO Bipul Sinha

4. Headlines

Syracuse is moving from Flock’s license plate reading technology to Axon, following Flock “misleading the city about data.” 

Benchmark initiated Cava with a buy rating due to optimistic growth expectations supporting 15%+ unit growth with strong comp trends over the next several years.

5. Macro

Output data:

  • The January Purchasing Manager’s Index (PMI) was 52.4 vs. 51.9 expected and 51.9 last month.
  • The January Institute for Supply Management (ISM) Manufacturing PMI was 52.6 vs. 48.5 expected and 47.9 last month.
  • The January Services PMI was 52.7 vs. 52.5 expected and 52.5 last month.
  • The January ISM Non-Manufacturing PMI was 53.8 vs. 53.5 expected and 53.8 last month.

Inflation data:

  • The January ISM Manufacturing Prices Index was 59 vs. 59.3 expected and 58.5 last month.
  • The January ISM Non-Manufacturing Prices Index was 66.6 vs. 65 expected and 65.1 last month.

Consumer & Employment data:

  • The January ADP Non-farm Employment Change was 22K vs. 46K expected and 37K last month.
  • Initial Jobless Claims were 231K vs. 212K expected and 209K last month.