Podcast Summary: Chit Chat Stocks

Episode: “Amazon and Alphabet's Capex Ramp; SpaceX and xAI MegaMerger; Software Stock Meltdown”
Date: February 6, 2026
Hosts: Ryan Henderson (“A”) & Brett Schafer (“B”)

Episode Overview

In this Power Hour episode, Ryan and Brett dig into a chaotic week for tech stocks, focusing on:

• The ongoing software stock meltdown and what’s driving the mass sell-off
• Recent Amazon and Alphabet (Google) earnings, particularly their aggressive capital expenditure (CapEx) plans
• The blockbuster SpaceX and xAI megamerger and its ambitions
• Notable earnings news from other major tech names and a check-in on Bitcoin’s wild volatility

The tone is witty, self-deprecating, and loaded with sharp investor insight, as the hosts share not just the numbers, but how it feels to live through dramatic portfolio swings.

Key Topics & Insights

1. Software Stock Meltdown: What’s Going On?

Timestamps: 01:22–12:20

• Drawdown Anguish & Watchlist Delusions:
  Brett jokes about avoiding the temptation to buy software during the ongoing meltdown—stocks are down 50-70%, still require “reasonably aggressive growth assumptions” to look attractive (02:55), and wondering, “what on earth were people thinking a year ago?”
• “Rolling Bubbles” Perspective:
  The hosts mention that SaaS had its peak in 2021, referencing the “rolling bubbles” of the past decade (03:11).
• Impact of AI Launches:
  Ryan notes the selloff is pervasive across software, largely thematic, with little differentiation between vendors. The release of Anthropic’s Claude for non-devs “wasn’t anything novel…they just launched the product to a new demographic and people open their eyes to it” (05:04).
• Practical Take on AI Adoption:
  Despite fears AI will kill enterprise software vendors, Ryan says even AI-forward firms “aren’t building [their] own Slack or CRM,” drawing a distinction between Big Tech’s in-house builds vs. SMBs reliant on outside vendors (08:29).
• Buying Opportunities Amid Carnage:
  Brett thinks the indiscriminate selloff may throw “a lot of babies out with the bathwater” (06:23), and companies with strong buybacks and capital allocation will reward patient investors.

“It feels like one of the most random sell offs…because I’m not actually seeing this anywhere.” – Ryan (10:47)

2. Amazon & Alphabet Earnings: Growth, CapEx, and Concern

Timestamps: 12:20–36:40

Amazon’s Q4 (Immediate Reaction)

• Strong Growth, Sizable CapEx
  • AWS up 24% YoY ($35.6B revenue, fastest % growth in years; added $6.8B YoY) (13:03)
  • Retail steady, ads up 22%
  • Massive CapEx guide: $200B in 2026, “80-90% of that” likely AWS (14:56)
• Market Reaction:
  Amazon stock down 10% after hours; market wary of CapEx surge (13:03, 14:56).

Alphabet’s Q4

• Impressive Numbers Across the Board
  • Search +17%
  • Cloud +48% (accelerating)
  • Subscriptions +17% (now sizable)
  • YouTube ad +9% (strong despite comparison to election cycle) (30:22)
• Huge CapEx Plans:
  Alphabet guiding for a near doubling of CapEx, ~ $185B (21:41)
• Cloud Backlog Caution:
  Concern over ballooning AI/cloud commitments—are they real, or strategic mirages? (30:22)

CapEx Debate: Risk or Opportunity?

• Investor Worry:
  Massive reinvestment across Amazon, Alphabet, Meta, prompted sell-offs; Wall Street frets over returns and whether AI spend is value-destructive (21:07).
• Ryan’s Contradiction Point:
  Investors can’t have it both ways—selling SaaS for potential AI disruption and selling Big Tech for investing in AI. “How can you sell off on a big investment in AI, and then sell the stocks because they’re going to get hurt by AI?” (22:26).

“If you just stripped out the capex guide…[Amazon’s] a really solid quarter all around…24% year over year growth in cloud is their fastest in three years off their largest base.” – Ryan (17:51)
“They don’t care about the numbers. It’s space. It’s the future. It’s Musk.” – Ryan (55:52)

• Alphabet as the Strongest CapEx Bet:
  Brett argues Google’s CapEx is more justified given ROI paths in Cloud, Gemini, Workspace, YouTube, etc. (34:45).

3. SpaceX–xAI MegaMerger: Outlandish Ambition, Unanswered Questions

Timestamps: 50:39–59:29

• Deal Details:
  $1.25T combined valuation ($1T SpaceX, $250B xAI); ambition to “make a sentient sun, understand the universe, extend the light of consciousness to the stars” (52:04, quoting Musk).
• Reality Check:
  xAI brings little revenue. The “plan” is to launch Starship dozens of times/year to put data centers for AI (Grok) into space—a capital-intensive, unproven vision (54:15).
• Engineering & Financial Scepticism:
  Brett and Ryan doubt feasibility given untested Starship launches, uncertain economics of space data centers, and no meaningful Go-to-Market yet for Grok (55:01).
• IPO Angle:
  Rumors SpaceX/xAI wants immediate S&P 500 inclusion—unlikely by normal rules, but not impossible with Musk in charge (52:04).
• Tesla Shareholders Take Note:
  "If you are a Tesla shareholder, the thought of merging with this should not excite you.” — Ryan (55:01)

“We are seeing rumors that SpaceX wants immediate inclusion into indices at IPO. Someone really wants to keep the stock price high…” – Brett (52:04)
“They don’t care about the numbers. It’s space. It’s the future. It’s Musk. That’s all he needs to do.” – Ryan (55:52)

4. Bitcoin, Bubble Watch, and Other Earnings

Timestamps: 40:40–50:39; 59:29–end

• Bitcoin Dive:
  Down 15% in a day, hitting $63k (41:14).
  • Skepticism: Hosts question if the “adoption story” has actually changed and highlight rumors of Binance’s insolvency.
  • “It’s magic beans produced with electricity and computers.” – Brett (47:57)
• Palantir:
  Flawless earnings not enough—stock still in a ~30% drawdown, underscoring the problems with high-multiple stocks (59:54).
• Roblox:
  Up 20%, cash flow tremendous, actual income negative due to astronomical stock-based compensation (62:11).
• Nintendo, Uber, Reddit:
  Miscellaneous coverage: Switch units fine but stock's down, Uber may be a buy on further drawdowns, Reddit business "interesting" but not fully researched (64:11–65:11).
• Endgame:
  “Software meltdown of 2026” lightning round: Which SaaS company would you buy? “Adobe. It’s cheap but…they’re all so different.” (68:28)

Notable Quotes & Memorable Moments

• On the SaaS Crash:
  “It’s amazing how, in the watchlist, it’s exciting and then in the portfolio it’s just dreadful.” – Ryan (02:05)
• On CapEx Paradox:
  “Isn’t it ironic that people are like, well, we don’t know what the return on that CapEx is going to be, but also AI is going to disrupt enterprise software and we’re going to sell off all the stocks because of it?” – Ryan (22:08)
• On Space IPO Hype:
  “This marks not just the next chapter, but the next book in SpaceX and xAI’s mission: scaling to make a sentient sun, to understand the universe and extend the light of consciousness to the stars!” – Musk, as quoted by Brett (52:04)
• On Bitcoin’s Conviction Test:
  “Here’s the rule of thumb: if you have to rely on someone else to say something when whatever the security you own is dropping… it’s testing your conviction.” – Ryan (47:02)
• On SaaS Company Selection:
  “I’ll tell you what they do, Brett. They grow. They grow the top line.” – Ryan (69:13)

Segment Timestamps

• Software Stock Meltdown: 01:22–12:20
• Amazon & Alphabet Earnings (and CapEx): 12:20–36:40
• Bitcoin & Random Bubble Watch: 40:40–50:39
• SpaceX–xAI MegaMerger: 50:39–59:29
• Quick Hits (Roblox, Nintendo, Uber, Palantir): 59:29–end

Summary & Takeaways

• The SaaS software reckoning is not just about changing tech but distorted expectations. Despite scary drawdowns, some legendary platforms could deliver.
• Big Tech’s willingness to commit staggering CapEx is making markets nervous—returns on these investments are yet to be proven, but the cloud wars and AI arms race aren’t slowing down.
• The proposed SpaceX-xAI mega-IPO is equal parts sci-fi and financial high-wire act—if anyone can sell Wall Street on building “the sentient sun,” it’s probably Elon Musk.
• Bitcoin’s volatility and the “fundamental value” debate rage on, while meme stocks and big multiple darlings like Palantir are reminders of market psychology’s pendulum.
• The best investment compass is understanding the core business, not just price swings or Twitter hype.

For listeners and investors, this episode is a masterclass in maintaining perspective—and humor—amid tech market storminess.