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Hear that? That's me in Tokyo learning to make sushi from a master. How did I get here? I invested wisely. Now the only thing I worry about is using too much wasabi. Get where you're going with spy, the world's most traded etf. Getting there starts here with State Street Investment Management.
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Possible loss of principal. Alps Distributors Inc.
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Distributor it just had its first billion dollar quarter. You'd think so far so good. But is it? With the stock price falling, we explore the fintech's recent moves. The New York Stock Exchange is going all in on content. We report back on our morning literally there on Wall street. Plus the latest from Nvidia, Oracle and a White House trade deal. And Disney had a bother year at the box. Expensive sports programming and succession planning hang over the stock. We dig into earnings for Monday, February 2nd. It's blue markets Daily and I'm Ann Barry. More market details to come. But first, Parks and Recreation succession. No, not weekend TV viewing, rather the past 72 hours in Disney News. And on the earnings side, it's been pretty good on several fronts for the entertainment giant whose first quarter report came out early this morning. And there was a lot of insight to be gleaned into broader media sector risks and opportunities coming out of this one particular giant's report. Well, first off, streaming did well with operating income for Disney plus and Hulu up 72% from the same quarter a year ago, hitting $450 million and coming in well above Wall street expectations. And the company's guidance proving that the streamers can in fact have have profitable growth. Disney also took a victory lap on its film studios, which generated more than $6.5 billion at the box office for the calendar year 2025. By the way, this was the firm's third biggest year ever and its ninth number one position at the global box office over the past 10 years. Pretty incredible track record showing that silver screen magic isn't dead yet. Then, of course, experiences. That's Parks, Resorts and Cruises, which delivered record quarterly revenue, crossing the $10 billion mark for and with segment operating income up 6% compared to the prior year first quarter. But here's what was interesting. While domestic Parks and Experiences results were clearly strong, Disney signaled concern about one element of their continued success and that's foreign visitors to the United States. In its prepared management remarks, Disney wrote, quote, we expect modest segment operating income growth in Q2 due to a combination of factors, including international visitation headwinds at our domestic parks. Well, in an interview on CNBC this morning, the Disney CFO declined to provide the reasons for this specific issue. He wouldn't just come out and say it. But the timing does coincide with increased visa vetting for foreign tourists who are coming to the United States. And some in the hospitality industry have expressed concern that it may be impacting visitor numbers. Instead, the CFO focused on the company shifting more of its marketing efforts towards California's Disneyland and Florida's Walt Disney World to try to get more domestic visitors through the doors in response. And then there is sports. And this was fascinating because this is where you could see in Disney's earnings a sector wide tension between growing revenue and also trying to make money. At the same time, ESPN did lead the industry. It captured more than 30% of all sports viewership across networks. But sports segment operating income for the first quarter declined $56 million compared to that prior year period because a healthy 10% growth in ad revenue was offset by, amongst other things, higher programming and production costs. Which just shines the light on something we talk a lot about on this show, which is the fundamental challenge in sports, which is that buying these broadcasting rights is just incredibly expensive. Now, we also finally got the cost of Disney standoff. You may remember that with YouTube in the fall, its carriage dispute had left customers unable to access ESPN and other channels. And we saw today that it hit Disney profits by about 110 million overall, though Disney reported just under $26 billion in revenue, up 7% from a year earlier, but its net income of 2.4 billion, down 6%. So all of this good momentum, but at a cost. And it comes just as it looks as though CEO Bob Iger wants to get out of town, get out of Dodge. He was out of that top CEO seat before his contract is up. And I'm going to come back to that timing in just a moment because the drama around how Disney will handle CE CEO succession has hung over the stock, which has basically flatlined for the past three years. Now, the company last tried to replace the iconic Bob Iger in 2020, but his successor was booted out and Iger brought back in less than 36 months later. So this time the board learned its lesson. It put together a succession planning committee chaired by the highly regarded former CEO of Morgan Stanley, who knows what he's doing. And Disney's board of directors is meeting this week at its Burbank, California headquarters where it's expected to finally vote on who the next CEO show is going to be. Now, there's been fervent press speculation around the fact that it's likely a two horse race between internal candidates. That's Josh d', Amero, chair of the Experiences Division and then the entertainment co chairman Dana Walden. So lots of eyes on this one. And this is just one person's view. This is mine. I think Iger is keen to get out while the numbers show some decent momentum. That revenue growth is there. But he's getting out right as it's getting harder to achieve profitable incremental sales. Now, Disney stock down over 7% today. We're going to keep watching and we are with the rest of the market, all eyes on who the next CEO is going to be. Well, coming up, SOFI is moving hard on a strategy shift. We break it down for one listener who asked to hear the latest. We also report back from a field trip to the New York Stock Exchange. And we hit the highlights today on Nvidia, Oracle and a new tariff deal. But first, a word from our sponsor, iherb. John, where do your supplements come from?
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I don't know. I would guess the grocery store.
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Right? But I mean before that I'm going.
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To say the store. The grocery store people go to. Okay. I actually have no idea.
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Season is hitting its stride. Of course, those big moves happening at Disney this evening. Palantir reports on their most recent quarter. We're eagerly awaiting what that looks like. And there's another name that reported late last week that one listener, Kevin Hardy wants to know some more about. Kevin wrote quote, hey gang, I really enjoyed the show since launch. Thank you, by the way, Kevin, for that. I would love to hear you guys discuss SOFI and get your take on this fintech business. Well, thank you, Kevin. This one is very, very interesting. I've been following sofi for a while. So just to set the stage for a moment, going into earnings, the majority of analysts had so far rated at a hold or a sell given its high valuation. And there was also the question of whether that valuation would be justified. And the key to that would be sofi necessarily succeed, succeeding in a strategy to diversify its revenue beyond traditional interest income. Well, one growth prong has been its loan platform business. And what that does is originate loans that source loans on behalf of third parties and then provides deferrals to partners, all of which would generate, in theory, a high margin fee income stream. So we're going to dig into that. We're going to get to the heart of Kevin's question, which is how has it done what it's been doing? But kick us off, John, with a snapshot of the earnings results.
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That's right. SoFi Technologies ticker S O F I on the NASDAQ market cap of $28 billion. Now, the headline since earnings came out is that SoFi just had its first billion dollar quarter. Net revenue of $1.01 billion beat expectations and was up 37% year over year. Adjusted earnings per share of $0.13 beat estimates by a penny. Now, shares were down about 2% this morning. They're up 40% over the last 12 months.
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That's right. And it's that run up over the last 12 months. That 40% increase is exactly what caught the eye of Kevin, for instance, to see such moments. But the fact that the shares are down in response to what on the surface looks like a pretty strong quarter is really fascinating. So the CEO Anthony Noto, called the results, quote, exceptional. That was his perspective. The company adding a record million new members and 1.6 million new products, bringing its user base to 13.7 million. That's up a chunky 35% from last year. And the growth that SoFi saw as we break this down came from both its financial services and its legacy lending segments. And that loan platform revenue that I described at the top, which is originating loans for third parties, more than tripled from last year to over $190 million. And that alone provided more than 40% of SoFi's total growth. So to me, John, that said that this experiment, this push into the loan platform space is actually delivering some of the good. So that was a piece of good news coming out of the earnings results.
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And it seemed like SoFi is pushing into lots of different spaces and experimenting with different things. The company's focused on building out services both traditional and. In the earnings report, SoFi pledged to become a quote one stop shop spanning banking, loans and investing. And as part of that last December, SoFi became the first nationally chartered US bank to launch a fully reserved US dollar peg stablecoin on a public blockchain. And it's being rolled out slowly. In the near term it'll be used to settle between sofi and third party partners and then it'll get more applications over time.
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So here's what's really interesting. So there were a whole bunch of these neobanks, they were called neobanks that came out, sofi was one of them. And for the long time they would talk about their business model as having a superpower of being able to attract younger consumers of financial services with snazzy apps, really good user interfaces. And they weren't banks per se, which was didn't meant they weren't really sort of taking in taking hold of the assets that were being deposited with them. That's why they were neo banks. But they would partner with banks ultimately and those partner banks would go and do the real banking that is more familiar to us at the likes of the Bank America does for example. But SoFi did something a little bit different. It actually went and bought a chartered bank, so a quote real bank. And as a result it's been able to do a little bit more than some of its competitors in the app based space. So in November it became the first and only nationally chartered bank to allow retail customers to buy, sell and hold cryptocurrencies directly within what was now an FDIC insured banking app. So that FDIC insurance, you may remember, actually guarantees the safety of your deposits up to a certain cap. Now so far, so if I suspended the service in 2023 as a condition of receiving a national bank charter, it's still the revenue linked to this crypto offerings still relatively small compared to its overall pie. But the fact it's leaning in here and trying to do something a little bit different sort of caught our eye.
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You're right. And they're trying to get the platform to scale which we were saying getting newer users in younger people. This is from their earnings report. I printed it out the financial services productivity loop and here it lists so many of their different services. SOFI Money, SoFi Invest, SoFi Crypto SoFi Protect Home Loans, student loans and it says brand awareness brings new members into the financial services productivity loop. And they call it the virtuous cycle. And you know, you recently spoke with the CEO of Gen. Yeah, his name is Vincent Pellette.
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That's right.
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And that was on After Earnings, our sister podcast. He explained how they look to get their customers engaged with familiar products like Norton Security, and then graduate them into financial security through products like Moneylion. And so we're seeing SoFi do a similar thing, get these younger customers in and then pass them up through different products.
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I think what SoFi is doing is an easier lift, actually than what Jen's trying to do. You're right. They're both trying to go after this virtuous cycle, which is a concept that's been around for a very long time, which is the idea that you get the benefit of scale, you get someone onto a platform. Another word for it that's been used in the cyber security space is platformization. Right. In a layperson's term, it's called the One Stop Shop. Right. It's the One Stop Shop. The one that this reminds me of the most is actually Robinhood. Because if you think about Robinhood, what that's done to enormous effect is get people to come in initially to trade stocks and shares. Now they've moved them into crypto. Now they've also got prediction markets. Now they've got managed wealth services. I'd interviewed Steph Guild, who's their chief investment officer, so that people who actually want somebody else to actively manage their investments can do so. And I think I saw recently that Robinhood's now moving into things like offering tax filing services for its users. So again, this one Stop shop idea in Fintech is really, really critical. It's the financial services equival equivalent of trying to become a super app, which is something that we've seen in other geographies where you, for example, get someone to do ride sharing and then try and move into financial services well along with earnings. So SoFi gave its guidance for 2026, which includes pretty impressive expectation for 30% net revenue growth. It did also guide to 40% earnings per share growth over the next three years. And just to give a sense for how big this business has become, 2025's adjusted EBITDA total for the year, it's a measure of profit, came in at and 54. You know, it's easy to forget just how big a company like so far has gotten. So the thing that's really at the heart of this, Kevin, is you're right. We've seen the share price go up again, 40% over the last 12 months. But on the back of this earnings report, you didn't get the sort of euphoric victory lap from a stock price performance perspective. So just our view on what could be going on here and why we're seeing a stock decline despite these green shoots of good performance. Number one, SoFi did a pretty big capital raise. It was announced in December. And in that announcement, SoFi said it was going to raise $1.5 billion by issuing new common shares. Now, what happens when a company issues new common shares? It dilutes everybody else who has the stock already. So the only way in which shareholders come to the conclusion that is a good thing is if the money being raised by that stock issuance is going to be invested in stuff that grows so much faster that it compensates for that dil. Now, when SoFi did this capital raise, it said it was going to use the proceeds for, quote, general corporate purposes, including enhancing its capital position and increasing optionality. I read that as we're not sure what we're going to use the money for yet. And when CEO Anthony Noto was interviewed right after earnings and he was asked, what are you going to use this money for? He said it was an opportunistic capital raise. Now, without specificity, the market tends to get a little bit nervous. It does seem, though, that SoFi will content, so I will contemplate doing some mergers and acquisitions as a result of this. But again, no specifics were provided. So green shoots in this earnings release. Again, it was a pretty expensive or, you know, fairly perhaps fully valued share stock going into it. That's why you saw some of the holds that we saw the analysts coming up with. And there is one analysis that we read that was particularly bearish, that I thought I would share, and that was from Morningstar. Not to be a Debbie Downer, but just because it's interesting to hear someone synthesize why that share price may have fallen. This Morningstar analyst said, quote, the bottom line, we will maintain our $18 fair value estimate for SoFi, which they call no mode rated. Despite weak share price performance so far in 2026, we think the shares are still materially overvalued following their impressive performance in 2025. We think the market is extrapolating too much growth from SoFi's recent performance, which includes the launch of its loan platform segment. While this business has materially out our initial expectations, we expect growth to slow over time. And I think that sums up pretty much what we're seeing in the share price reaction. But we're going to keep watching this one because the more SoFi produces evidence that it's delivering on its strategy, the more you'd expect to see changes in the share price to the positive if they're outperforming expectations and otherwise, we'll see if the market's disappointed.
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And Kevin, thank you for writing in. If you have a question for Ann or a company you'd like us to COVID leave a comment or send an email to brewmarketshoworningbrew.com Come, let's take a break.
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When we come back, we'll take you behind the scenes at the New York Stock Exchange. Producer John I want to set you up.
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All right. Well I'm not on the market, but either way I don't know if I trust you in that department.
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Oh yeah. Well, would you trust a matchmaker who uses AI to comb through a database of people who meet all of your criteria?
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Actually, yeah, that sounds great.
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Well, that's what sitch matchmaking does. It was designed specifically for the high intent data out there, such as detailed onboarding. Get to know exactly what you're looking for and your non negotiable.
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Okay, well my non negotiables include being a good pet parent and having an up to date will and testament specific.
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But yes, their matchmaker will help ease you into conversations to avoid ghosting and actually set you up. Skip the waitlist@joinsitch.com morning brew that's joinsitch.com morningbrew On Friday I sat down with the NASDAQ's Vice Chairman Bob McCooey who had brilliant energy and really enjoyed our conversation on site Times Square to talk about the IPO outlook for 2026, why a new exchange is opening in Texas and why one company, which is Walmart, had decided to move its stock listing from the New York Stock Exchange to the nasdaq. Well take a look at that episode. I'll post the link on my social so you can find it easily. But it was very interesting and this was sort of an accident to scheduling that right after that conversation today the New York Stock Exchange was holding a partnership day because is very keen not to get left behind. The New York Stock Exchange is on a mission to up its tech and content game. So what it did was invite a bunch of media companies, including us, to go check out the latest on site recording facilities at the historic Wall street location. So John and I hopped over there together with our teammate Olivia Graham to take a quick look and I'm just dying to know John. I've been to the New York Exchange a couple of times. I've Got a story about that. But I want to know because I don't think you'd been before what you thought about it.
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This was my first time in the building, and it was exc. It's historical and gold Guild everywhere, everything is gold. And it's beautiful and historic. And then going down to the floor, it's less of what you might remember seeing in movies of people yelling buy and sell. Now, of course, there were folks working down on the floor. I got to see Peter Tuckman, who is featured. He's called the Einstein of Wall Street. He's got that shock of white hair. And a lot of times in financial reporting, when you see Wall street had a bad day, it's a photo of him with his head in his hand or he's ch. And so that was like seeing a celebrity. He's been there for 40 years. But otherwise it was interesting to me to see that they are turning this into a media center, that they really want folks outside to know that this is the heart of where trading is happening.
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It's very interesting. So they talked about partnerships. They're striking with folks like tbpn, which is podcast, I'm sure. Lots of. I listen to them when they stream on X talking about tech and the New York Stock Exchange talked about how they've got billboards out there now. Right. So it's not just about broadcasting from within the exchange itself, but it's actually. Actually sending that content out to billboards on Times Square where, guess what NASDAQ's located. Exactly. And I think one out towards Silicon Valley as well, which I thought was interesting. So this sort of planting flags in. In all these different places I first went. I remember the first time I went to the New York Stock Exchange, I was much, much younger. I didn't really know much about finance. And this was in 2000. And at that time, and this is extraordinary. I remember getting up, setting my alarm really early in the morning. It was my first ever trip to New York. I was traveling and I went down to Wall street and I got a cup of coffee and a bagel from one of the trucks outside. This is a real New York experience. And I just walked up to the front of the New York Stock Exchange and I showed them ID and you could just go in, right. Because security just wasn't in 2000 what it is today. And I walked in and I deliberately went to go and hear the opening bell. And at the time, it was crowded. The floor was still crowded and crowded with people. This is 26 years ago. And I just remember the energy was palp. And the lovely man who was sort of showing visitors around, I remember him saying that at the time. I'm sure it's now changed. The New York Stock Exchange, I think, consumed the most electricity of any building in the known building in the United States, which I thought was fascinating. And so today's visit, John, seemed so silent on the floor in comparison to that visit because, you know, so much has been automated and so much was on the screens and they just didn't have the density of people on the floor that they used to be.
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It was generally pretty quiet. We got to go down where the bell was and have a moment and. Right. You could see that more of the media companies are building out. We saw the LA Times had just set up a new space and of course, CNBC is known for being there. A little bit of the history was interesting. We were up in the telegraph room at one point during the day, and I got to see a 1920s ticker tape. That's so cool machine, which we referenced that on the show here, here. And so you can see the history, you can see the evolution. And I'd like to do some shows from there.
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I'd love to do some shows from there. The final thought on this is that even though there aren't many people still working on the floor itself, the one thing I do love is the fact that those still working there still had these sort of vests.
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Yes.
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You know, that were actually branded with the stock brokerage that they work for. And I got to tell you, I heard a lot of gratuitous dropping of. Gratuitous dropping of F bombs, which I absolutely associate with in person trading on the stock exchange. So I was glad to see that that hadn't yet gotten to Norway. Great, great. Well, it's a lot of fun. We'll have to go back and actually, one of our teammates, Olivia, took some really fun videos. We'll drop some stuff there on Social so you can see a little bit more what it was like there. I. I run into the bell. I'm so enthusiastic. I run into the bell. There it is, 4pm on the east Coast. The markets have closed and we don't have a ticker tape, though we saw one this morning. But I'll throw it over instead to our human ticker, our producer, John.
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That's right. The S&P 500 and the NASDAQ both finished up about half a percent today, and the Nasdaq finished up 1%. The big macro mover was president Trump's announcement on Truth Social that the United States and India have reached a trade deal. India's Prime Minister Modi apparently committed to, quote, stop buying Russian oil and to buy much more from the United States and potentially Venezuela in return for the US dropping its tariffs on Indian imports from 25% to 18%.
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Well, in addition, Modi said, and that's according to that Truth Social report post rather, that he was committed to, quote, buy American to the tune of over 500 billion of spend, including on US energy, technology, agriculture and coal. And just one brief comment too, that was also referenced in that True Social post, President Trump saying that by this move and implied in that as meaning, you know, getting less revenue to Russia that it would put pressure on to bring an end to the conflict in Ukraine. So that was just one sort of note coming out of that. Well, in other news, Nvidia ticked down today and the market manifested how it's digesting. One particular report that the Wall Street Journal printed on, which caught my eye at the time and was excited to see how the market would respond today. The headline of that Friday article was, quote, the $100 billion megadeal between OpenAI and Nvidia is on ice. Well, that is in reference to the Giants Agreement, which was announced in September in which Nvidia would build at least 10 gigawatts of computing power for OpenAI alongside that massive dollar investment. Well, according to the Journal, Nvidia CEO Jensen Huang has privately told folks that the deal is non b and not finalized. He's apparently been emphasizing that and he may have expressed concern that there is a, quote, lack of discipline in OpenAI's business approach on top of competition it's facing from Google and Anthropic. So apparently again, privately stated comments, that's according to the Wall Street Journal, but Jensen Huang's actually now perhaps not sort of standing by those that report anyway.
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That's right. Speaking to reporters in Taipei over the weekend, Wang said it was, quote, nonsense to say he was unhappy with Open Air AI nonetheless raising question marks yet again in the market about circular AI deals and the AI trade. And meanwhile, over at Oracle, the stock was up 3% throughout the day before finishing in the red after the company announced plans to raise 45 to $50 billion this year. That's to build additional capacity in response to contracted demand from its cloud customers.
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There we go. So there it is, down. Yet at one point in time, the market looked like it was supportive of that. Well, just as a final thought, Palantir's earnings are out basically sort of now. So going to be rushing over to look at defence is one that is just going to get more and more attention, folks. We talked about that in our episode on Thursday where we broke down the latest on traditional defence stocks. Take a look at that again. I'll post that. But old and new school defence, you've got them both covered. This is a very big quarter for Palantir as the market looks at the sustainability of its unbelievable 2025 growth rate. We'll be watching that. Meanwhile, that's it for today's Brew Markets Daily.
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And Brew Markets Daily is hosted by Anne Barry, produced by John Cotto, talker Bellatif, Olivia Graham and Emily Millar. Our technical director is Uchena Wa, Jim Orzo is our audio engineer and the president of Morning Brew Inc. Is Devin Emery.
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Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place.