Name: Will this week's earnings deliver?
Uploaded: 2026-02-03T17:57:29+00:00
Duration: 523 s

Speakers

Josh Brown — CEO, Ritholtz Wealth Management

Joe Terranova — Senior Managing Director, Virtus Investment Partners

Stephanie Link — Chief Investment Strategist, Hightower

Shannon Saccocia — Investment Committee Member

Scott Wapner — Host, CNBC

Summary

The CNBC Investment Committee discusses a sharp tech and software sell-off, with the Nasdaq down and software ETF IGV well off its high. Panelists debate whether AI tools like Anthropic's new legal product are cannibalizing software and data-services business models, and they weigh rotation into cyclicals and cybersecurity. Joe Terranova and Stephanie Link favor a more diversified, cyclical posture, while caution remains high on software and crowded tech exposure.

Tech and mega-cap stocks sold off, with software and application-layer names hit hardest.
Anthropic's new legal tool added pressure to software, SaaS and financial data providers.
Joe Terranova says AI cannibalization is real for software, data services and exchanges, and urges trimming overweight tech.
Josh Brown warns the application software layer is ground zero and even cybersecurity is not safe near term.
Stephanie Link favors cybersecurity stocks and says CTO spending supports the group.
Link and Terranova both favor cyclicals, pointing to stronger economic data and rotation from growth and tech.
Shannon Saccoccia notes software revenue beats lag other tech and sees continued pressure without evidence of a turnaround.
The panel sees elevated volatility but a rotational bull market, with industrials, energy and materials showing strength.

Ideas

Josh Brown CEO, Ritholtz Wealth Management 2:01

Application software faces forced selling.

He argues the sell-off is concentrated in the application layer of the software stack, where even companies with strong reports are not rewarded and risk appetite is leaving anything tied to technology. He says sellers are hitting these stocks with massive sell orders, making the application software layer ground zero for the de-risking.

Josh Brown CEO, Ritholtz Wealth Management 2:25

Cybersecurity not safe short term.

Even cybersecurity stocks are not safe right now because the tech sell-off is indiscriminate; he says sellers are coming for these stocks with massive sell orders, so near-term downside risk remains despite the sector's defensive qualities.

Joe Terranova Senior Managing Director, Virtus Investment Partners 4:05

AI cannibalizes software; trim exposure.

He says AI cannibalization of software is real and will not go away in 2026; software earnings are trailing the broader tech sector by about 15%, there is no short-term proof point to dispel concerns, and investors should reduce overweight software/tech exposure rather than catch the falling knife.

Joe Terranova Senior Managing Director, Virtus Investment Partners 4:14

Data providers face AI cannibalization.

The AI cannibalization theme extends beyond software to financial data services and exchanges; he names FactSet, Broadridge Financial, Moody's, S&P Global and some exchanges as areas being turned upside down, a theme he expects to persist.

Joe Terranova Senior Managing Director, Virtus Investment Partners 5:04

Market in good place.

He says elevated volatility coexists with a rotational bull market and still thinks the overall market is in a good place, with sector strength supporting a constructive broad-market view.

Joe Terranova Senior Managing Director, Virtus Investment Partners 5:09

Own industrials, energy, materials.

He believes the market is in a rotational bull market with elevated volatility but still healthy, pointing to strength in industrials, energy and materials as sectors investors want to own amid the rotation away from tech and software.

Joe Terranova Senior Managing Director, Virtus Investment Partners 5:17

Reduce tech overweight positioning.

He says their technology weighting is already at a historic low after a dramatic reduction in software, and if investors are overweight tech/software they should take down that positioning; he prefers a more diversified, rotational approach.

Stephanie Link Chief Investment Strategist, Hightower 6:06

Holds Snowflake, Synopsys selectively.

She disclosed that among software names she only holds Snowflake and Synopsys, along with Palo Alto, indicating selective exposure while remaining cautious on the broader software group.

Stephanie Link Chief Investment Strategist, Hightower 6:10

Cybersecurity stocks are buys now.

She says cybersecurity companies are buys right here even though they may fall with software; CTOs are spending on AI and cybersecurity, and she thinks AI will not take over cybersecurity—cybersecurity will be bigger than AI. She owns Palo Alto and points to CrowdStrike as a way to own cyber fear.

Stephanie Link Chief Investment Strategist, Hightower 7:21

Own cyclicals as economy strengthens.

She says the underlying economy is stronger than expected, with Chicago PMI and ISM manufacturing PMI above 50, and that investors want to own cyclicals as part of the ongoing rotation from growth to value.

Stephanie Link Chief Investment Strategist, Hightower 7:25

Software lacks near-term catalyst.

She warns investors must be very careful and selective in software because there is no short-term proof point or catalyst to dispel AI disruption concerns.

Shannon Saccocia Investment Committee Member 7:54

Software revenue beats lag other tech.

She notes only 67% of software companies beat revenues versus 83% of other tech companies, so with alternatives across the market there will be continued pressure on software until there is evidence that revenue growth can turn up in the second half.

Will this week's earnings deliver?

Summary

Ideas

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