Earnings February 11, 2026

Market Overview

Earnings narratives today center on two cross-cutting themes: (1) technology-sector earnings are being re-priced around AI-related disruption and elevated capex expectations, and (2) select financials and industrials show mixed results with clear divergence between headline beats and underlying metric surprises. Market moves reflect investor focus on forward guidance and profit-metric details rather than top-line prints alone [4][7][14][25][26].

Key Developments

1. Alphabet flagged AI-related business risks in its annual report, explicitly noting potential impacts on advertising — a core earnings driver — which raises the stakes on near-term ad revenue guidance and margin assumptions for ad-dependent names [4]. 2. Tech giants and hyperscalers are under investor scrutiny after a week of volatility tied to concerns about large AI-related spend; Microsoft and Oracle moves show that investor reaction is sensitive to outlooks for incremental operating expenses that can compress near-term EPS [7]. 3. Software names face bifurcated sentiment: Monday.com’s 21% decline underscores market fears that AI tools could materially disrupt product value and future revenue growth, pressuring guidance and valuation multiples for incumbents [14]. Conversely, analysts remain selectively bullish where earnings trajectories look intact, as indicated by Morgan Stanley’s software buy calls (the coverage explicitly targets beaten-down software stocks viewed as having recoverable earnings power) [1]. 4. In financials, India’s State Bank of India reported a profit beat with an upbeat loan-growth outlook, propelling the stock to record highs and signaling resilient earnings momentum in large-cap lenders when loan demand and margins hold up [26][27]. 5. Conversely, Hanwha Aerospace missed revenue and pre-tax profit estimates, although net profit beat expectations, highlighting dispersion between operating-line misses and bottom-line accounting effects — investors will parse such divergences for sustainability of earnings quality [25]. 6. SoftBank’s telecom unit lifting guidance and Arm-related strength materially improved group-level profit expectations, driving a sizable share reaction and showing how forward-looking guidance revisions can quickly re-rate earnings expectations for conglomerates with AI or semiconductor exposure [13]. 7. Broader market credit dynamics introduce earnings risk: private credit stress and potential defaults could affect firms’ financing costs and impairment charges, indirectly pressuring earnings for borrowers and specialty lenders alike [11]. 8. Corporate leadership changes (e.g., Workday CEO transition) and pre-IPO fundraises (Databricks) will influence investor expectations about the stability of future guidance and public comparables used to model software earnings trajectories [17][23].

Financial Impact

The near-term EPS readthroughs are uneven. For ad-reliant companies, Alphabet’s AI risk disclosure is a cautionary signal that consensus ad revenue growth and margin assumptions may be optimistic, especially if AI shifts advertiser mix or pricing power [4]. Hyperscaler capex and R&D increases create a two-year headwind to free cash flow and operating margins, potentially compressing EPS in FY24–25 absent offsetting revenue lifts [7]. Software vendors face twin risks: demand substitution from AI-native tools (driving downward revenue revisions) and higher customer churn or contract re-pricing (pressure on ARR and renewal metrics) evidenced by market reactions like Monday.com’s drop [14].

On the positive side, company-level guidance upgrades — SoftBank’s telecom unit being a case in point — can create material upside to EPS expectations and investor sentiment when sustained [13]. In banking, SBI’s profit beat and loan optimism point to better-than-expected net interest income and provisioning trends, supporting earnings resilience in key financials [26][27]. Industrial miss specifics (Hanwha) suggest tighter scrutiny of order books, margin drivers, and one-offs when reconciling operating vs net profit outcomes [25].

Market Outlook

Expect heightened earnings volatility over the next reporting season: models must stress-test for higher AI-related opex, ad-mix shifts, and potential software demand erosion. Key metrics to monitor in upcoming releases: ad revenue by channel and product, AI-related capital and operating spend, ARR and churn for SaaS companies, loan growth and provision trends for banks, and reconciliation of operating vs net profit items for industrials. Selectivity matters — identify software names with durable ARR, low churn, and clear monetization of AI investments, and favor financials with improving NIMs and stable credit costs. Watch for additional guidance revisions and management commentary on AI spend to recalibrate EPS forecasts and portfolio positioning [1][4][7][11][13][14][17][23][25][26].