The Rundown - Software Stocks Meltdown, Walmart Breaks $1 Trillion

Episode Date: February 4, 2026

Market update for Wednesday February 4, 2026Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today’s episode:Software stocks sell off as new AI tools from OpenAI and Anthropic spark fears of disruptionEli Lilly surges while Novo Nordisk stumbles, exposing a price war in weight-loss drugsAMD slides after underwhelming guidance Walmart joins the exclusive $1 trillion market cap club, becoming the first retailer to ever do it

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Wednesday, February 4th. In today's episode, we'll tell you why software stocks are getting crushed right now. We'll also recap earnings from Eli Lilly, Nova Nordisk, AMD, and Chipotle. Then stick around to the end of the show to find out why the market thinks Walmart is now a tech company. We got a great show for you today. Let's go.

Stocks took a beating on Tuesday with the S&P 500 dropping 0.8%. And the NASDAG got hit even harder, dropping 1.4%. Now, here's the thing. The sell-off yesterday wasn't evenly spread across the market. In fact, more than half of the stocks in the S&P were in the green. But the index has still finished in the red because of a brutal sell-off in software stocks. Yesterday, investors wiped out nearly $300 billion in market value across. software data and financial service stocks, and it's because investors are nervous about the AI

tools coming out of companies like OpenAI and Anthropic. Anthropic rolled out new automation tools that can handle things like legal research, contract, drafting, and data analysis. That's the exact kind of stuff that a lot of these enterprise software companies charge big money for. So now investors are asking the question if AI can do these tasks for cheaper and faster, that could eventually impact the business of software companies like Salesforce, Adobe, and others. And it's that anxiety and uncertainty that has the software sector in a bare market right now.

You know, I do find it kind of ironic that AI went from being the reason the stock market was booming the last couple of years to now being the reason that it's falling. You know, it's a good reminder of how quickly narratives can change in the market. Another good example of this is Google. This time last year, everyone thought that Google was cooked because AI was going to take market share from search volumes. Now the narrative is that Google is one of the leaders in AI. So I wonder if the same thing happens with these software companies? Like everyone thinks these software companies are cooked. Is it possible we look back in a year and the narrative has shifted again and these software companies end up benefiting from AI? I don't know. We'll have to see. Personally, I do think

the market might be overreacting a bit, but the reality is that we're in this weird phase where nobody really knows which companies will be AI winners and which will be AI victims. And until there's some more clarity, I think we're going to continue to have more volatility in software stocks. We're going to be staying on top of all this. Some of these software companies are going to be reporting earnings soon, so it's a great time to get subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with Eli Lilly and Novo Nortis. Both pharma giants reported earnings this morning and painted a very different picture. Let's start with the Danish Farma Giant Nobunortis, the maker of Ozempic and Wee Govy. Its shares are sliding

after the company delivered a pretty bleak outlook for 2026. The company warned, investors at sales of its weight loss drugs could decline between 5 and 13% in 2026, which is shocking. But there are a few reasons behind the slowdown. First is competition from Eli Lilly. Their weight loss drugs like Zepound and Manjaro have overtaken Novo's drugs in the U.S. market. Lilly now controls 60% of the U.S. weight loss drug market compared to Nova Nortis is 39%. I'll talk more about Eli Lili's numbers in a bit. Now, the next issue for Nova Nortis is pricing. Both Eli Lilly and Nova Nordus struck deals with the Trump administration to slash prices. Under the agreements, they're selling these drugs to Medicare patients for way cheaper

with co-pays as low as $50 a month. Keep in mind, these drugs used to sell for over $1,000 not too long ago. So while the lower prices are great for patients, it's hurting Nova Nordis's revenue. And finally, the big problem for Nova Nordisk is that generic versions of OZemPEC are about to hit the market in China, Brazil, and Canada this year. So you put all that together and investors are freaking out. Nova Nord's stock dropped 10% yesterday and it's down another 5% this morning. Now let's talk about Eli Lilly because their story is the complete opposite.

Eli Lilly reported blowout results and raised its 2026 outlook saying that it now expects $80 to $83 billion in revenue in 26, which is like a 25% growth compared to last year. Sales of Zepbound and Manjaro both doubled in Q4 compared to a year ago. And Lilly says that volume growth is more than offsetting. lower prices, at least for now. Another big advantage that Lilly has is patents. Its blockbuster drugs have longer patent protection, given the company more room to compete aggressively on prices without immediately worrying about generics. And that's why Eli Lilly's stock is up more than 8% this morning at the time of this recording. Now, Novanortis does have one thing going for them.

They were the first to launch a weight loss pill, which they did in January, and it's off to a strong start. More than 170,000 patients are already on the pill in the first month. But Eli-Ly Lillis is expected to launch their own pill in Q2, potentially as early as April. So yeah, clearly the market thinks that Eli Lilly is going to be the winner of the GLP1 wars. Let's shift gears and talk about AMD. They also reported earnings last night, and the stock is getting crushed despite reporting decent numbers.

The company B on both top line and bottom line for Q4, revenue was up 34% to $10.3 billion thanks to strong demand from its data center business, which grew nearly 40% in your over year. But AMD's stock is still down more than 10% this morning because of AMD's underwhelming forecasts. AMD's revenue forecast for the current quarter is $9.8 billion, which technically is above the average analyst estimate of $9.4 billion. But here's the thing, if you're an AI company right now, you're expected to absolutely blow the doors off of expectations, and AMD didn't do that. And that's why their stock has taken a big hit this morning. Now, CEO Lisa Sue tried to calm everyone down on the earnings call

as saying the demand for AMD's next generation AI servers is expected to accelerate in the second half of the year with big customers like OpenAI and Oracle ramping up deployments. She also said the company has no supply constraints and can meet whatever demand comes their way. But that wasn't enough to reassure investors, especially with AI stocks now falling out of favor. Let's talk about some stocks making moves today.

Shares of Take Two. Two interactive are up this morning after the video game publisher raised its full year outlook and officially confirmed that Grand Depth Auto 6 is launching in November. The company boosted its net bookings guidance, which is a key metric Wall Street watches because it captures total spending across games, in-app purchases, and subscriptions. The big growth driver right now is reoccurring revenue from games like NBA 2K26, GTA online, and mobile titles. In fact, reoccurring revenue made up two-thirds of total bookings last quarter,

which is exactly what investors want to see because it's consistent predictable revenue. As a result, take two stock is up around 6% this morning at the time of this recording. I also think that investors are just happy to hear that GTA6 wasn't getting delayed again. Now, on the flip side, Chipotle is getting crushed after reporting another quarter of declining traffic and issuing a pretty uninspiring outlook for 2026. Traffic in Q4 dropped 3.2% and same store sales fell by 2.5%. And if you look at the full year of 2025, same store sales were down 1.7% marking Chipotle's first annual decline since 2016 when they were dealing with that E. coli outbreak. And looking ahead, Chipotle expects flat same store sales growth in 2026, which is not what investors wanted to hear from a company that used to be a consistent growth machine.

Now, Chipotle is trying to bring back customers with cheaper options like protein cups for around $4 and tacos at $3.50. But so far, it's not moving. the needle. And the market is clearly losing its patience. The stock is down 6% this morning and down more than 30% over the past year. Let's wrap the show with a fun fact. Walmart's market cap crossed over $1 trillion for the first time yesterday, becoming just the 11th U.S. company to ever hit that milestone. Now, what's interesting is that most of the companies in the trillion dollar club are tech companies. You have Nvidia, Google, Apple, Microsoft, Amazon, meta, Tesla, and Broadcom. And while while Walmart started off by selling stuff in physical stores, Wall Street is starting to view them as a tech company as well.

The Walmart stock is up more than 25% in the past year, and its PE ratio is 44, which is the same as Nvidia. So they're being valued as a tech company, and it's easy to see why, because the company has really leaned into automation, AI, advertising, and e-commerce. In their most recent quarter, Walmart's e-commerce sales were up 27%. and advertising revenue was up 53%. Their Walmart plus subscription business also continues to grow, which I'm not going to lie, Walmart Plus is pretty legit. I use it all the time to order groceries. So yeah, Walmart has quietly pivoted from a boring retailer

to a trillion-dollar tech giant. Bonus fun fact, Walmart recently moved their stock listing from the New York Stock Exchange to the NASDAQ just to be grouped in with the other tech companies. I think that tells you everything you need to know. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, and you have like five extra seconds,

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Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play-O-Jo. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws. Hey, I just won.

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