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Luke Kawa

How Claude Code “is the ChatGPT moment repeated” — and why that’s awful news for software stocks

The relentless slide in software stocks continues, with the iShares Expanded Tech Software ETF trading to the downside and lagging the market on Friday.

The growing adoption of Claude Code, and more recently, the launch of Claude Cowork by Anthropic, has been an attention-grabbing moment as to the power of AI agents and how they can be housed and operated solely under one highly integrated user interface.

To say that software stocks have fallen out of favor would be an understatement, as having this much industry-specific market pain is incredibly rare. Based on data going back to 2001, if IGV has fallen at least 5% over the past month, the SPDR S&P 500 ETF is typically also down between 5% to 6% over the same period. Less than 3% of the time does SPY rise at least 1% while software stocks have gotten slammed — 28 instances in total, going back to August 2001 — and three of those are the past three sessions. Their valuation compression has also been intense.

Doug O’Laughlin, president of SemiAnalysis, authored a thought-provoking piece on just how momentous this recent technological progress is, along with his views on how AI agents will displace software and what disrupted companies can do adapt. A couple excerpts:

“Assuming it improves, has harnesses, and can continue to scale large context windows and only become marginally more intelligent, I believe this is enough to really take us to the next state of AI. I cannot stress enough that Claude Code is the ChatGPT moment repeated. You must try it to understand.

One day, the successor to Claude Code will make a superhuman interface available to everyone. And if Tokens were TCP/IP, Claude Code is the first genuine website built in the age of AI. And this is going to hurt a large part of the software industry.”

“I believe that all software must leave information work as soon as possible. I believe that the future role of software will not have much ‘information processing’, i.e., analysis. Claude Code or Agent-Next will be doing the information synthesis, the GUI, and the workflow. That will be ephemeral and generated for the use at hand. Anyone should be able to access the information they want in the format they want and reference the underlying data.

What I’m trying to say is that the traditional differentiation metrics will change. Faster workflows, better UIs, and smoother integrations will all become worthless, while persistent information, a la an API, will become extremely valuable.”

Claude Cowork the newest fuel for an AI-driven de-rating of software stocks

The growing adoption of Claude Code, and more recently, the launch of Claude Cowork by Anthropic, has been an attention-grabbing moment as to the power of AI agents and how they can be housed and operated solely under one highly integrated user interface.

To say that software stocks have fallen out of favor would be an understatement, as having this much industry-specific market pain is incredibly rare. Based on data going back to 2001, if IGV has fallen at least 5% over the past month, the SPDR S&P 500 ETF is typically also down between 5% to 6% over the same period. Less than 3% of the time does SPY rise at least 1% while software stocks have gotten slammed — 28 instances in total, going back to August 2001 — and three of those are the past three sessions. Their valuation compression has also been intense.

Doug O’Laughlin, president of SemiAnalysis, authored a thought-provoking piece on just how momentous this recent technological progress is, along with his views on how AI agents will displace software and what disrupted companies can do adapt. A couple excerpts:

“Assuming it improves, has harnesses, and can continue to scale large context windows and only become marginally more intelligent, I believe this is enough to really take us to the next state of AI. I cannot stress enough that Claude Code is the ChatGPT moment repeated. You must try it to understand.

One day, the successor to Claude Code will make a superhuman interface available to everyone. And if Tokens were TCP/IP, Claude Code is the first genuine website built in the age of AI. And this is going to hurt a large part of the software industry.”

“I believe that all software must leave information work as soon as possible. I believe that the future role of software will not have much ‘information processing’, i.e., analysis. Claude Code or Agent-Next will be doing the information synthesis, the GUI, and the workflow. That will be ephemeral and generated for the use at hand. Anyone should be able to access the information they want in the format they want and reference the underlying data.

What I’m trying to say is that the traditional differentiation metrics will change. Faster workflows, better UIs, and smoother integrations will all become worthless, while persistent information, a la an API, will become extremely valuable.”

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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Helena Cheng

Rocket Lab deal lifts space stocks

Shares of Rocket Lab are surging after announcing an $8 billion acquisition of satellite communications operator Iridium Communications, helping lift a broader basket of space-related stocks as investors piled back into the sector.

Planet Labs, AST SpaceMobile and Redwire all traded higher alongside Rocket Lab, extending gains in an industry that has drawn enhanced investor attention in recent months in light of the strategic importance that governments place on space and satellite communications infrastructure.

In a presentation, Rocket Lab’s management called the purchase “a shortcut” for its satellite communications business.

Under the terms of the agreement, Iridium shareholders will receive $27 in cash and Rocket Lab stock, valuing Iridium at $54 per share. Backed by a $3.6 billion bridge loan committed by Deutsche Bank and Wells Fargo, Rocket Lab absorbs Iridium’s globally licensed spectrum and an active base of 2.5 million subscribers.

Rocket Lab has also remained one of the most active launch providers in the sector. The company completed its 12th launch of the year last week, maintaining one of the highest launch cadences among commercial space companies.

Today's rally helps offset a brutal stretch for the group. Rocket Lab shares had fallen over 35% over the prior month, while Planet Labs stock was down more than 40% and AST SpaceMobile stock was down around 30% over the same window.

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Comcast shares rise on news of NBCUniversal spinoff deal

Comcast rose on the news that the telecom behemoth is spinning off NBCUniversal and Sky from its cable portfolio. 

Comcast initially jumped up to 17% in early trading, with the deal leaving management to focus on its core verticals of cable, wireless, and business services. 

NBCUniversal and Sky will form a new publicly traded company, similar to Versant Media, the holding company of CNBC and MS NOW that Comcast officially spun off in January. Bravo, one of the most lucrative properties that remained at Comcast, will remain part of NBCUniversal in the deal. The Universal theme parks and studios will also come with the new spinoff entity, along with Telemundo and Peacock.

Mike Cavanagh, the co-CEO of Comcast, will become the CEO for NBCUniversal, according to CNBC. 

The spinoff will be completed in about a year, according to a Comcast company statement. Its shareholders will also own shares in NBCUniversal, according to the same statement.

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