Earnings February 13, 2026

Market Overview

Earnings signals today are bifurcated: traditional financials showed clean beat-and-upgrade dynamics while software and AI-exposed tech names displayed volatility tied to guidance and margin concerns. India’s State Bank of India posted a profit beat and an upbeat loan-growth outlook that powered the stock to record highs, signaling healthy cyclical earnings momentum in banking [26][27]. Conversely, several software-related headlines imply rising earnings uncertainty as companies and investors digest AI-driven demand shifts and rising operating/capex pressure [1][4][7][11][14].

Key Developments

1) Bank earnings outperformance: SBI’s reported profit beat and stronger loan-growth commentary pushed its shares to record levels, underscoring resilient core earnings in a rising-rate environment and signaling possible continued upside in Indian banks’ earnings season [26][27]. 2) Corporate risk and guidance around AI: Alphabet explicitly warned in its annual report that AI presents business risks, notably for advertising demand and revenue mix, which could pressure near-term ad-driven earnings [4]. That comment frames AI as both a growth driver and a source of earnings uncertainty. 3) Software sector bifurcation: Morgan Stanley’s recommendation to buy two beaten-down software names suggests selective confidence in earnings recovery among some software incumbents, even as markets punish others—Monday.com’s 21% drop reflects acute investor concern about AI displacing product roadmaps and revenue trajectories [1][14]. 4) Capex and margin pressure at hyperscalers: The tech group saw a sharp move after investors fretted about large-scale expenditure plans by AI hyperscalers, a factor likely to compress near-term margins even if it supports long-term TAM expansion [7]. 5) Corporate outlook shifts: SoftBank’s telecom unit raising its full-year profit outlook and momentum around Arm provided a positive earnings signal for the conglomerate, demonstrating how unit-level guidance can swing group earnings sentiment [13]. 6) Governance and leadership impacts: Workday’s CEO transition could affect near-term guidance cadence and investor confidence ahead of the next report; leadership changes typically increase scrutiny on revenue recognition and margin planning [17]. 7) Credit and default implications: Private credit concerns tied to AI-induced stress in software firms create an earnings tail risk via higher financing costs and potential covenant breaches that would impair near-term profitability for affected companies [11].

Financial Impact

- Banking: SBI’s beat implies stronger net interest income and improved credit metrics; for investors, this translates into higher near-term EPS visibility and potentially upward revisions for peers in India’s large private and public banks [26][27]. - Software & AI-exposed tech: Companies facing disruptive AI competition (e.g., Monday.com) or those requiring heavy upfront capex (hyperscalers) face two earnings pressures: (a) revenue-risk from product obsolescence or displacement and (b) rising operating/capex compressing gross and operating margins [14][7]. Alphabet’s risk disclosure signals potential volatility in ad revenue, which would materially affect margins given advertising’s high-margin profile [4]. - Conglomerate/upside cases: SoftBank’s upgraded unit outlooks show how subsidiary-level earnings beats can materially lift group EPS expectations and investor sentiment, particularly when tied to high-growth assets like Arm [13]. - Financing/credit: Deterioration in software earnings or slower growth could push borrowers toward private credit market stress, creating a feedback loop that raises financing costs and forces conservativism in guidance and share buybacks, further weighing on EPS growth [11].

Market Outlook

Near term, expect continued dispersion in earnings reactions: cyclical financials (banks) with tangible loan and net interest trends will likely continue to deliver predictable beats, while software and AI-linked names will remain headline-sensitive and guidance-driven. Investors should prioritize: (1) companies with recurring, contractually-backed revenue and clear AI monetization paths; (2) names with margin flexibility to absorb incremental capex; and (3) banks and industrials showing concrete top-line momentum. Monitor upcoming quarterly guides for explicit AI-related revenue assumptions, capex plans from hyperscalers, and unit-level updates from conglomerates—these will determine earnings revisions and positioning decisions over the next 1–2 quarters [1][4][7][11][13][14][17][23][25][26][27].