Wall Street Rallies Ahead of Nvidia Earnings | Closing Bell
Speakers
Summary
- Tech Earnings Divergence: A sharp bifurcation in the software sector is emerging. While legacy players like Salesforce (CRM) attempt to engineer support via massive buybacks ($50B), growth names like The Trade Desk (TTD) are being punished severely (-12%) for guidance misses.
- The Nvidia Overhang: The market is paralyzed waiting for NVDA; despite a 700-800% run-up over three years, expectations remain priced for perfection (68% rev jump expected).
- Consumer/Retail Resilience: Urban Outfitters (URBN) provided a counter-narrative to consumer weakness with a solid beat on comps and earnings.
- Profitability vs. AI Spend: Zoom (ZM) illustrates the current trap for software: revenue beats are insufficient if margins compress due to forced AI capex/opex.
Trade Ideas
Stock is trading off highs but up 1.5% into earnings. Expectations are for a 68% revenue jump and 72% EPS jump. Stock is up 700-800% in 3 years. The bar is "priced for perfection." Even a beat might result in a "sell the news" event unless guidance is blowout. The risk/reward into the print is balanced to negative. Too dangerous to chase into the print; wait for the reaction to settle. They could post a "god-mode" quarter that reignites the entire AI rally.
Salesforce issued light Q1 revenue guidance ($11.0-11.1B vs $10.99B est - low end concern) but increased share buyback authorization to $50 Billion. Management is using financial engineering (buybacks) to put a floor under the stock ("catching a falling knife") because organic growth via "Agent Force" AI isn't convincing investors yet (stock down ~2-3% after hours). The $50B buyback prevents a collapse, but the lack of top-line acceleration prevents a rally. Dead money until AI monetization is proven. If the buyback is executed aggressively, it could artificially prop up EPS, squeezing shorts.
Snowflake guided full-year revenue to $5.66B (vs $5.5B est) and reported in-line Q1 product revenue. Unlike its peers (CRM/ZM), Snowflake raised full-year guidance. In a jittery software market, raising the guide signals confidence in consumption trends and AI data demand. Relative strength in a weak software tape. Valuation multiples remain high; any future deceleration will be punished harshly.
Axon reported Q4 adjusted EPS that beat average estimates. The stock surged 17.5% immediately, indicating a massive repricing of its public safety software and hardware dominance. Momentum play; the magnitude of the move suggests a fundamental re-rating of their execution capabilities. Valuation stretch after a nearly 20% single-day move.
Urban Outfitters beat on Q4 adjusted EPS ($1.43 vs $1.26 est) and comp retail sales (+5.5%). Retail is currently a "show me" sector. URBN beating on both top and bottom lines proves brand resilience despite macro headwinds. Buy the fundamental execution in a consumer discretionary survivor. Broader consumer spending slowdown affecting future quarters.
Paramount reported a Q4 operating loss of $339M against an estimated profit of $309M. A massive swing from expected profit to actual loss highlights broken fundamentals. The thesis is entirely dependent on M&A (Warner Bros Discovery or Netflix rumors). Uninvestable on fundamentals; purely a speculative merger arbitrage ticket with high downside if deals fail. A confirmed buyout offer at a premium.
Romaine Bostick
Anchor, Bloomberg
Trade Desk missed Q1 revenue guidance ($678M vs $688M est) and adjusted EBITDA guidance ($195M vs $222M est). Stock is down ~12% after hours. The company is already down 34% in 2026 (fiscal context). With 10% of the float short, this guidance miss validates the bear case that ad-tech spend is shifting or TTD is losing execution momentum. The technical damage is severe, and the fundamental guidance miss provides no immediate catalyst for a reversal. Potential for a short squeeze if management provides a surprisingly bullish long-term outlook on the call.
Caroline Hyde
Co-Anchor, Bloomberg Tech
Zoom provided fiscal 2027 adjusted EPS guidance of $5.77-$5.81, missing the street's expectation of $6.06, despite a revenue beat. Cash equivalents fell 6%. The EPS miss combined with falling cash indicates the company is forced to spend heavily (capex/opex) to integrate AI just to maintain revenue, compressing margins. Profitless growth (or in this case, margin-compressing stagnation) is not rewarded in this environment. Successful AI product launch that re-accelerates user growth.
Up Next
This Bloomberg Markets video, published February 25, 2026, features Tim Stenovec, Caroline Hyde, Romaine Bostick, Carol Massar discussing NVDA, CRM, SNOW, AXON, URBN, PARA, TTD, ZM. 8 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Tim Stenovec, Caroline Hyde, Romaine Bostick, Carol Massar · Tickers: NVDA, CRM, SNOW, AXON, URBN, PARA, TTD, ZM