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Mangling of the Magnificent

Goldman Sachs sounds the alarm on Nvidia and the Magnificent 7

Nasdaq 100 rallies are to be sold, according to strategists at Goldman Sachs.

Luke Kawa

Ever since DeepSeek roiled markets, the AI trade vibes have oscillated between “it’s so over” and “we’re so back.”

Put Goldman Sachs firmly in the former camp amid another dreadful session in which Nvidia is down as much as 7%.

In a flurry of notes released late last week and over the weekend, strategists at the bank basically said that the party’s over for the megacap US tech trade. To sum up their case:

  • When a stock fails to respond to good news, that’s bad news.

  • The earnings growth that made the Magnificent 7 so magnificent isn’t as magnificent any more.

  • Hedge funds are dumping the cohort and other AI-linked positions.

  • Popular stocks could see a lot more of a valuation reset lower.

The strategists, in their own words:

Paolo Schiavone:

“The NVDA print was a clearing event — the reality is that from here the AI theme is for sale. In AI, investors are worried about 2026 growth not 25. Nasdaq 100 rallies will be used as liquidity events.”

Tony Pasquariello:

“We all knew it was coming, but the immense earning premium that you had earned in US mega cap tech vs everything else is narrowing. DeepSeek triggered a shift in the flow [of] capital away from the US plays. In a few ways, NVDA earnings are an illustration of what’s going on here: they didn’t pull a hamstring as the cyclical impulse to spend on compute is still clearly intact, but price action told a certain story (i.e. -$320 billion of market cap in one day). Bigger picture, the stock has been range bound for the past eight months — coming off a 24,000% cumulative return in the prior ten years, if nothing else that’s anti-climactic.”

John Flood:

“February’s notional de-grossing in US TMT [technology, media, and telecom] is tracking to be the second largest on our record (behind January 2021 amid the meme stocks rally). Net exposure to Mag7 names has continued to fall and is now at the lowest level since April 2023, and aggregate long-short ratio across our US TMT AI basket constituents remains well below the highs seen around the middle of last year.”

Goldman PB
Source: Goldman Sachs

Mark Wilson:

“To my starting comment about price action sometimes revealing more than fundamentals — these 3 ‘head check’ charts of the largest index constituents give a reasonable frame of reference for price possibilities from here: Nvidia, Apple & Amazon’s EV to 12-month trailing sales multiple: it’s not a uniform observation (i.e. AMZN has no dramatically re-rated), but its not unreasonable to suggest some very large stocks may consolidate after the moves they’ve had, in price & in multiple re-rating.”

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J. Edward Moreno

FDA says it will take “decisive steps” against GLP-1 compounders, HHS refers Hims to DOJ for investigation

The Food and Drug Administration said it would take "decisive steps" to restrict GLP-1 compounding, a day after Hims & Hers announced that it would sell copies ofNovo Nordisk’sWegovy pill.

The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

Read more

Hims, long flying under regulators’ radar, finally strikes a nerve with its Wegovy pill copy

Hims, long flying under regulators’ radar, finally strikes a nerve with its Wegovy pill copy

The FDA specifically called out Hims in the announcement. Additionally, Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

In a statement, Hims said the company "has always operated with a deep commitment to the safety and best interests of consumers and in compliance with applicable law."

"We have a long history of successfully working with regulators, and look forward to continuing to engage with the FDA to ensure safe access to affordable healthcare," they said.

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

Read more
Tasha Matsumoto
7h
Tech rebound propels stocks to best day since May

The S&P 500, Nasdaq 100, and Russell 2000 all climbed higher as the AI trade was back on.

Chicago Bulls Dennis Rodman (91) and Michael Jordan (23) in action, rebounding vs Charlotte Hornets
Max Knoblauch

Airlines rise, continuing their volatile 2026, as US-Iran talks may foreshadow some oil supply relief

Airline stocks are surging on Friday, as the market appears to be pricing in some medium-term oil pricing relief following talks between the US and Iran. Iranian officials referred to the meeting as “a good beginning.”

Shares of budget carriers, which have tighter margins and are more sensitive to fluctuations in fuel costs, are leading the surge. Frontier Airlines and Allegiant up more than 13%, while major airlines like United Airlines, American Airlines, and Delta Air Lines are also up at least 6%. JetBlue and Alaska Air are similarly up about 6%.

The market more broadly is rebounding on Friday, with the S&P 500 up 1.6% and bitcoin recovering some of this week’s losses.

Airlines have been volatile to start 2026 amid geopolitical tensions, varying annual forecasts, and the impact of winter storms.

markets
Luke Kawa

The AI supply chain is soaring thanks to Amazon’s capex budget

If tech companies are going to spend way more than expected on capex, well, that means other companies are poised to benefit from that massive spending spree.

Amazon’s plan for $200 billion in business investment this year was the exclamation point to end a reporting period that saw every Magnificent 7 hyperscaler that provides guidance offer a 2026 capex budget well above what Wall Street had anticipated.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

markets
Matt Phillips

For memory chips, the “parabolic price hike” is continuing to ramp higher

The remarkable run-up in prices for memory chips continued into early February, analysts at Bernstein Research say, driven largely by data center demand from hyperscalers and cloud service providers (CSP).

Prices for NAND flash memory wafers — a type of memory used in devices, as it retains data even when powered down — soared 35% between the end of 2025 and February 2.

Spot prices for DRAM — ubiquitous short-term data storage chips — jumped about 28% in that period. But that massively understates the remarkable shift in pricing for what were long seen as commodity tech hardware inputs. DRAM prices are more than 2,000% over the last year, while NAND prices are up more than 600% in that period.

The ongoing momentum provides still more support for memory chip plays like Micron and Sandisk, which have been big market winners in recent months.

In a note published earlier this week, Bernstein Research analysts wrote:

“The parabolic price hike continued in Jan. Indicated price increase for 1QCY26 is much stronger than we expected and we hence see upside to our near term memory pricing projection. Unrelenting CSP demand remained the main driver. PC and Mobile demand hasn’t been destroyed yet because of lean inventory & pull-forward purchase. Going forward price hike is expected to continue but likely at a slower rate, as PC and Mobile demand should contract meaningfully this year. Price however may stay elevated throughout this year, supported by CSP demand.”

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