👉 Amazon is Spending $200B on Data Centers in 2026

In partnership with

👉 Week in Review — Too Long; Didn’t Read:

Key Earnings Announcements:

• PepsiCo raised their dividend for the 54th consecutive year in a row.

• Amazon is going to spend $200B in 2026 on data centers.

• Google’s Cloud business is generating $5B a quarter in operating income.

Investor Events / Global Affairs:

• Software stocks have been selling off like crazy.

• The U.S. and India reached an interim trade deal.

• Hims & Hers was forced to stop selling newly-announced weight-loss drugs.

Economic Updates:

• January layoffs hit highest start of the year since 2009.

• ADP payrolls missed expectations.

👉 Portfolio Updates

As you all might remember from last week’s newsletter, the portfolio is changing a bit. After exiting most of my crypto position, I’m now using that money to optimize for volatility with international exposure and energy. This optimization has already begun — as I started using that money to buy the following this week:

• VOO — 35%

• QQQ — 20%

• MLPI — 12%

• VXUS — 8%

• IEMG — 8%

• PAVE — 8%

• URA — 4%

• ILF — 4%

I tweaked the weightings a bit to more so favor energy and developed international over emerging — but all-in-all the same strategy and exposure shared last week. Very excited for this!

From an overall markets perspective, a few things are standing out to me:

1) SaaS is getting destroyed — and for good reason.

There around countless SaaS companies, probably north of 80% of all that exist at this moment in time, whose total addressable market is now shrinking while simultaneously losing (or will start losing) market share to AI-built apps and agents. It’s important to understand this sector of the market is NOT getting destroyed because their earnings are collapsing — this is purely multiple compression. Investors were happy to pay 30X forward free cash flow for a company — now they only want to pay 20X, or less. That simply means investor confidence is declining. Investors are less confident that company will be able to deliver free cash flow into the future, therefore they’re only willing to pay 20X vs. 30X for it.

I believe a few SaaS companies are still doing very well and will come out of this ahead. Databricks is a great example. There are “SaaS applications” like mentioned above, and there is “data infrastructure.” I believe Databricks, being a “data infrastructure” company, will benefit from their AI agents building bespoke AI applications at scale. The company is not yet publicly-traded, but will be offered later this year. I’m very excited to participate.

2) The most speculative stocks put in ATHs late-2025

As you all might remember from the Covid-induced bubble we experienced in the stock market during 2020 and 2021 — before the indices peaked in December 2021, SPACs and other unprofitable technology names (ARKK is a great gauge of these) put in their all-time highs in Q1 2021. By the time the indices finally rolled over, more than half of the names inside the Nasdaq-100 were trading at 52-week lows.

We’ve begun to see this take shape. Names like Oklo, Robinhood, Palantir, Ionq, and countless other momentum (high-beta) names that retail loved in 2025 have seemingly put in their all-time highs and are now in durable down drafts — a series of lower highs and lower lows. Is this foreshadowing for what’s to come from the indices? Hard to say, but this is another reason why I’m actively buying energy and international.

3) Crypto turmoil

I would argue that crypto remains in a bear market. We’re experiencing a much needed relief rally at the moment, but I do not believe the bottom is in. We must clear the 20-week moving average with conviction before I can begin to get optimistic again. In all other Bitcoin bear markets, decisively clearing this marked the bottom.

With that being said, ETFs like BTCI remain incredible ways to build a position in Bitcoin here at the lows. This covered call ETF gives exposure to Bitcoin while simultaneously offering a ~28% yield on your investment (via covered calls). Get paid essentially 30% yield per year to wait for Bitcoin to find a bottom? Sounds good to me. This is what I’ll be doing.

Let me be clear — I have no idea where the bottom will be for Bitcoin. Knowing no one can time the bottom, it’s a great idea to get some exposure around the $40-60K range and get paid to own it until it rallies back toward $100K over the coming quarters and years.

👉 Best and Worst ETF Performers of the Week

Learn how to make every AI investment count.

Successful AI transformation starts with deeply understanding your organization’s most critical use cases. We recommend this practical guide from You.com that walks through a proven framework to identify, prioritize, and document high-value AI opportunities.

In this AI Use Case Discovery Guide, you’ll learn how to:

• Map internal workflows and customer journeys to pinpoint where AI can drive measurable ROI

• Ask the right questions when it comes to AI use cases

• Align cross-functional teams and stakeholders for a unified, scalable approach

Get the Guide.

👉 Key Earnings Announcements:

PepsiCo raised their dividend for the 54th consecutive year in a row, Amazon is going to spend $200B in 2026 on data centers, and Google’s Cloud business is now generating $5B a quarter in operating income.

• PepsiCo (PEP)

Key Metrics

Revenue: $29.4 billion, an increase of +6% YoY

Operating Income: $3.6 billion, an increase of +58% YoY

Profits: $2.5 billion, an increase of +67% YoY

Earnings Release Callout

“PepsiCo's fourth quarter results reflected a sequential acceleration in reported and organic revenue growth. We are playing offense. We have begun testing affordability tactics at scale... focusing on particular brands, formats, and channels where we see the biggest friction for low- and middle-income consumers.

We expect Frito-Lay to grow volume, net revenue, and operating margin this year."

My Takeaway

• Amazon (AMZN)

Key Metrics

Revenue: $213.4 billion, an increase of +14% YoY

Operating Income: $25.0 billion, an increase of +18% YoY

Profits: $21.2 billion, an increase of +6% YoY

Earnings Release Callout

“We expect to invest about $200 billion in capital expenditures in 2026, predominantly in AWS. I know that number sounds large, but it is a direct reflection of the demand we are seeing. Customers are queuing up for capacity, and we are monetizing that capacity as fast as we can install it. This is not 'build it and they will come'—this is 'they are here, and we need to build it.”

My Takeaway

• Alphabet (GOOGL)

Key Metrics

Revenue: $113.8 billion, an increase of +18% YoY

Operating Income: $35.9 billion, an increase of +16% YoY

Profits: $34.5 billion, an increase of +30% YoY

Earnings Release Callout

“It was a tremendous quarter, with annual revenues exceeding $400 billion for the first time. We are seeing our AI investments and infrastructure drive revenue and growth across the board. Gemini 3 is now the engine for the world's most successful software companies, and Google Cloud ended 2025 at an annual run rate of over $70 billion."

My Takeaway

👉 Investor Events / Global Affairs:

Software stocks have been selling off like crazy, the U.S. and India reached an interim trade deal, and Hims & Hers was forced to stop selling newly-announced weight-loss drugs.

• The “SaaSpocalypse” Accelerated Last Week

The sharp “SaaSpocalypse” selloff in software stocks was triggered by a mix of weak earnings, rapid improvements in AI models, and new automation tools from Anthropic that spooked investors about long-term disruption. Fears that AI could replace or sharply reduce the need for traditional software subscriptions helped drive the Nasdaq 100 to its worst two-day drop since October, wiping out more than $550 billion in market value, with SaaS names hit hardest.

Software-as-a-service companies rely on per-user subscription fees, and investors worry that AI agents automating work could reduce the number of paid users or make standalone SaaS platforms less essential. Stocks tied to enterprise software and data — including providers like Microsoft and Salesforce — fell sharply, pushing a Goldman Sachs software basket roughly 25% below its September peak.

Not everyone agrees with the panic, as Nvidia Corp. CEO Jensen Huang called the selloff “illogical,” arguing AI will enhance software rather than replace it, a view echoed by SaaS firms investing heavily in AI integrations. Ultimately, Anthropic’s plug-ins became a symbol of a broader fear: that increasingly capable, AI-centric tools could upend not just individual products, but the entire economics of the traditional SaaS model.

• The U.S. and India Reached an Interim Trade Deal

Subscribe to GRIT Premium to read the rest.