Brew Markets – Episode Summary

Episode Title: AI Hammers Software Stocks & Uber’s Earnings Don’t Deliver
Host: Ann Berry
Date: February 4, 2026

Overview

This episode tackles the volatile landscape of tech stocks, focusing on the impact of AI developments on the software sector, Uber’s earnings disappointment despite record usage, and Monster Beverage’s outperformance in the consumer space. Ann Berry provides nuanced analysis, connects sector trends, and includes a listener Q&A.

Key Discussion Points

1. Tech Stock Turbulence: AI’s Groundshaking Impact

• NASDAQ’s Recent Performance ([01:13])

  • Down 2% today and 4% over the past five days, in the red for the year.
  • Represents the continued volatility and a broader shift in where investors are searching for value.

• AI’s Role in Reshaping the Market

  • OpenAI’s launch of ChatGPT (Nov 2022) triggered tech’s rally, now fueling secondary waves.
  • While chip, data center, hyperscaler, and energy stocks rose, software stocks are falling.
  • Companies like Adobe, Snowflake, and C3AI lag due to perceived risk of generative AI displacement.
    • “Adobe ... has lagged as Canva and Sora has bitten at its ankles ... Snowflake and C3AI dropping as the likes of Palantir saws that one in particular pushing beyond government contracts and into commercial applications.” (Ann Berry, [02:27])

• The Disruptors and Newly Disrupted

  • Anthropic (and Google’s Gemini): quietly advancing, rolling out tools that target software incumbents.
  • Legal AI Plugins:
    • Anthropic’s legal plugin for its Coworker system challenges the traditional moat (sticky SaaS, data, subscription) of companies like Legal Zoom, MSCI, and FactSet.
    • “The new highly effective legal plugin for Anthropic’s coworker system ... is just one example of how Claude is throwing that kind of thesis on its head.” (Ann Berry, [02:57])

• Market Reaction

  • $300 billion in market cap wiped from the software sector recently; even bond markets are rattled.
  • In stark contrast, "boring" stocks (Walmart, J&J, ExxonMobil, Caterpillar, RTX) are hitting new highs.
    • “When it comes to where the market is hunting for value, boring is back.” (Ann Berry, [03:41])

2. Uber Earnings: High Usage, Disappointing Profit

• Stock Drop and Summary ([05:34])

  • Uber stock down over 7% after earnings release.
  • Record trips (200M monthly users, 40M trips/day), but EPS and outlook underwhelmed.

• Earnings Breakdown ([06:05-09:49])

  • Adjusted EPS: $0.71 vs. $0.85 expected (“Hurt by a large change. Hurt by large charge tied to its equity investments.” - John Croteau, [06:10])
  • Revenue: $14B, barely beat estimates.
  • Forward guidance for adjusted EPS: $0.65 - $0.72 (well below Street’s $0.81).
  • Mobility (rideshare): Revenue up 19% to $8B, bookings up 20%.
  • Delivery (Uber Eats): Revenue up 30% to nearly $5B, now includes groceries/retail, international growth strong.
  • Freight: Smaller segment, $1.2B/quarter, exploring consumer uses.
  • Cash Flow: $2.8B free cash flow (CEO highlighted during the day’s media rounds).
  • “Profitability, which of course drives that free cash flow generation, up 35% year over year.” (Ann Berry, [09:49])

• AI/AV Initiatives & Market Position ([08:33-10:59])

  • Uber is pushing into autonomous vehicles and robo-taxi space, competing with Waymo.
  • Partnerships with Alphabet/Waymo in certain markets.
  • Plans for AV trips in 15 cities by year end (Houston, LA, London, Hong Kong).
    • “Uber is expecting to do more AV trips in 15 cities globally ... the executive saying we’re going to keep these AV rides coming.” (John Croteau, [09:22])
  • Ann: Sees more sensors/robo-taxi vehicles on NYC streets—proof of sector momentum.
  • User-side changes: Features like "Wait and Save" to segment customers by price sensitivity; pushing premium options (XXL/Escalade).
    • “They're trying to get Uber customers at every price point.” (John Croteau, [10:59])

• Competitive Landscape ([12:15-13:53])

  • Upcoming Lyft earnings, noting Lyft already implements similar features (“wait and see”, teen rides, accessibility improvements).
  • Both working to win parental trust in teen-focused offerings (app UI improvements).

3. Monster Beverage: Quiet Growth Juggernaut

• Listener Question ([14:55])

  • “Tyler wrote: With the changes in the food and beverage industry, I think it would be really interesting to look at Monster Energy. The stock has had a real run. What are they doing that’s working so well?” (John Croteau, [14:55])

• Company Background ([15:04-16:00])

  • $80B market cap, nearly $8B in annual revenue.
  • Broad international reach (sold in 140+ countries), diverse drink portfolio (energy drinks plus hard seltzers, malt beverages).

• Coke Partnership: Transformative Deal ([16:00])

  • 2015: Coca-Cola swapped its global energy drink business for Monster’s non-energy brands, invested $2B+ and has about 20% equity stake.
  • Coke remains a pivotal distribution/strategic partner and has veto on major moves.

• Strategy and Performance ([16:20-18:11])

  • Outsources production, asset-light model helps maximize cash flow.
  • Focus remains on product innovation and branding.
  • Revenue growth steady—most recent quarter up 15% YOY, margins improving.
  • Stock up 85% over five years, 30% in last six months, outperforming beverage sector.
    • “Cash is queen. The market always likes it. And Monster share price is up more than 85% over the past five years, more than 30% over the past six months alone.” (Ann Berry, [17:12])
  • Bullish analyst sentiment (Morgan Stanley, Goldman Sachs), especially as non-alcoholic beverage trend strengthens in the US and globally.

• Risks and Outlook ([18:12-19:40])

  • Valuation is rich; P/E ratio above historical averages, so high expectations are already priced in.
  • Next earnings report later this month—guidance will be scrutinized.
    • “Valuation has been up as a result. ... The price to earnings ratio that the stock has been trading at has been above historical averages, which suggests that investors are pricing in future growth quite aggressively already.” (Ann Berry, [19:03])

4. Quick Market Headlines ([20:03])

• Eli Lilly (LLY): Up 10%+ after weight loss drugs (Zep Bound, Manjaro) turbocharge revenue (+42% YOY).
• MGM Resorts (MGM): Up nearly 9% after BetMGM joint venture reports $2.8B in annual revenue (+33% YOY).
• Match Group (MTCH): Up 5%; beat earnings estimates, investing in AI to boost Tinder growth, despite soft guidance.

Notable Quotes and Memorable Moments

• “The irony of the phases of the tech trade and the volatility around this isn’t going anywhere.” — Ann Berry ([01:25])
• “All I see are sort of robo taxis or preparatory vehicles looking to pave the way for more of these to come into the mainstream.” — Ann Berry ([09:49])
• John Croteau’s Uber Freight anecdote: “Had a New Year’s Eve party. Someone left their phone ... It was five and a half dollars to send this phone.” ([12:00])
• “It feels more Amazon-like these days, actually, in terms of the willingness to try things out and then let it go if it's not quite working.” — Ann Berry on Uber ([13:53])
• “Cash is queen ... Monster share price is up more than 85% over the past five years, more than 30% over the past six months alone.” — Ann Berry ([17:12])
• “Valuation has been up as a result ... investors are pricing in future growth quite aggressively already.” — Ann Berry ([19:03])

Timeline & Timestamps for Key Segments

• 01:13 — NASDAQ, market volatility & tech rotation discussion
• 02:27 — AI’s effect on software stocks, Adobe/Canva/Snowflake
• 02:57 — Anthropic AI legal plugin impact
• 03:41 — “Boring is Back”: Market rotation to blue chips
• 05:34 — Uber’s earnings miss, trip and revenue stats
• 06:05 — John Croteau: Uber’s earnings in detail
• 08:33 — Uber’s ride-hail, AV (autonomous vehicle) ambitions
• 09:22 — AV partnerships and city expansion goals
• 10:59 — User experience/features, Uber strategy
• 12:00 — John’s Uber Freight party anecdote
• 12:15 — Competitive landscape, Lyft comparison
• 14:55 — Listener question on Monster Beverage
• 15:04 — Monster’s business model, market cap, and history
• 16:00 — Monster-Coca Cola deal explained
• 17:12 — Performance, asset-light strategy, stock outperformance
• 18:12 — Risks and forward-looking guidance
• 20:03 — Quick market headlines: Eli Lilly, MGM, Match Group

Tone & Style

Conversational, analytical, and client-focused. Ann Berry brings incisive perspective, balancing high-level trends with sector and company-level details. John Croteau adds data and a relatable, sometimes lighthearted touch.

Closing

This episode delivers sharp insight into market-moving themes: generative AI’s double-edged sword for software, Uber’s quest to balance innovation and profits, and the often-overlooked strength of consumer companies like Monster Beverage. For investors and market watchers, it offers both actionable intelligence and plenty of context behind the tickers.