B (2:24)

That sounds like the beginning of a horror movie. What about Sandals Resorts. Instead, get yourself to those powder white sand beaches and turquoise waters.

C (2:31)

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B (2:40)

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C (2:47)

There is no better place to experience the Caribbean than at resorts founded by a family from the Caribbean. For the latest offers, visit sandals.com that's.

B (2:56)

Sandals.Com Cable television, department stores, print newspapers, all once lucrative business models that ultimately bit the dust could software be next? It's the existential question everyone's asking as software companies get absolutely pummeled on the stock market this week. There's widespread fear that new AI tools could automate tasks that previously required expensive software subscriptions, obliterating the value of the companies that sell them. The meltdown started when Anthropic added new legal legal tools for its cloud cowork agent. Aiming to win over in house lawyers seems harmless enough. But on Tuesday morning that triggered a major sell off in legal and financial data firms like LegalZoom, Thomson Reuters, Equifax and Intuit. Those jitters later spread to the rest of the software industry, hitting names like Salesforce, Workday, SAP and ServiceNow. By the end of the day, software companies had lost $300 billion in value and yesterday brought even more selling. All told, in index tracking, software stocks has shed nearly $1 trillion over the past. Some are calling it the SaaS apocalypse, the beginning of the end for the software as a service industry. Others say the fear of AI disruption is overdone and expect a bounce back once nerves have calmed. No matter what, as Bloomberg writes, the vibes have gone from bearish to doomsday. A JP Morgan analyst put a best saying that we are now in an environment where the sector isn't just guilty until proven innocent, but is now being sentenced before trial.

C (4:19)

Yeah, I'm going to dive into what some more analysts were saying because they were kind of popping off about this, one senior equity investment manager based in Paris told Bloomberg. There's clearly indiscriminate selling across the entire software cluster. Toby Ogg, which is a great name by the way, who is that analyst that you mentioned? He said that for software companies, better than expected results are no longer enough to convince the market, basically saying that it's almost ready, aim, fire at this point when it comes to selling software stocks because you dive into some of the financials of These companies, some of the earnings of these companies and they're doing all right. ServiceNow last week said it is accelerating net new ARR at a huge scale. Seems pretty bullish. How did the market react? It lost 12 billion in market cap and is since down about 10%. The SAS index is down 32% over the past year despite most companies meeting or beating earnings. All the while markets are up 15% over that same period. So there really is a lot of fear in the space right now that is pretty divorced from the actual fundamental businesses themselves.

B (5:19)

And I just, yeah, it's worth emphasizing that this software sell off is not this week news headline. It's a full year headline where they've been kind of on a downward trajectory. But then the anthropic legal tool dropped this week and then essentially it was just sell first, ask questions later. There are some who are pushing back on this software sell off saying it's way overdone. Like this is. This is very indiscriminate at this point. And one figure who thinks software stocks are getting unfairly pummeled is Nvidia CEO Jensen Huang, who is the essentially the king of AI right now. He called it the most illogical thing in, in the world. He said that AI is going to use existing tools to accomplish tasks rather than reinvent them. He said, would you use a hammer or invent a new hammer? So he's one of the bigger names saying maybe buy the dip.

C (6:07)

You know who else is a big name who is saying that this could be overblown is Sundar Pichai, Alphabet CEO. He said yesterday, I think it is an enabling tool speaking of AI, just like it has been an enabling tool for us across our products and services. So basically parroting the same exact argument that these tools are widely used for a reason. There's no need to go reinventing the wheel when the wheel works just fine. Where is all this money going though? Because if you are rotating out of software stocks, you must be rotating into something else and a lot of them are going into consumer staples. Bank of America said that buyers have been pouring into consumer staples stocks at the fastest pace on record. These are things you use every day. You know, food stocks, beverage, hygiene products, stuck stuff you need to live. So we're seeing a little bit more of that defensiveness from the market. Whereas before, over the past, you know, really decade or so, SAS stocks have been the de facto thing that if you wanted to grow your money, that's where you would put your money. Now the money is going to more defensive stocks.

B (7:06)

Yeah, I think it's worth putting a point on just how kind of shocking this is, because if you wanted to beat the S&P 500, you would go into a basket of software stocks because they were so dependable. It's a very sticky product if you're a company that buys Monday.com or salesforce. It is very that's very expensive, first of all, and it's also very annoying to change from that particular product. So if you wanted to beat the S&P 500, if, as an investor, you would put all of your money in software stocks, but over the past week, they've essentially wiped out all of their advantage over the broader index in the past five years, just in the past couple of days alone.

C (7:40)

SaaS Apocalypse is a apt way of framing it, I do believe. Moving on the Washington Post is 150 years old, but 13 years of ownership by Jeff Bezos might be enough to kill it. Yesterday, the storied paper was left wounded and bleeding after announcing mass layoffs. The book section shut down. International news desk hollowed out sports section a shadow of what it once was. When the dust settled, one third of the Post total staff was cut, according to company leadership. The idea is for the paper to rise from the ashes with a greater focus on national news and politics, with some additional business and health reporting and not much else beyond that. Matt Murray, the Post executive editor, said that the company had lost too much money for too long, as monthly traffic to the paper has nearly halved in recent years. Of course, the buck stops with Bezos, who bought the paper back in 2013. Flashback to 2024 he sounded tired but optimistic about the Post's chances of a turnaround, saying, we saved the Washington Post once and we're going to save it a second time. But to many observers, calling newsroom staff feels more like a death sentence than a lifeboat. Neil Former Washington Post editor Marty Baron called Wednesday's announcement among the darkest days in the history of one of the world's greatest news organizations.

B (8:56)

The knives were out for Bezos yesterday. In the New York Times, they wrote that the cuts are a sign that Jeff Bezos, who became one of the world's richest people by selling things on the Internet, has not yet figured out how to build and maintain a profitable publication on the Internet. There was an Atlantic headline that read the murder of the Washington Post. And the thrust of these arguments is that this is not inevitable. Yes, news and print media is on the decline, but you can thrive in this digital world. There are publications that are Doing really well. And it was a series of strategic errors by Bezos and the people that he hired that has laid this one storied publication low. If you just go back to 2016, 2017, the first Trump presidency, the Washington Post was absolutely killing it. It had more than 3 million paying subscribers. Now it's far below that level. Bezos poured money into this publication, expanded the newsroom by 85%. So there were boom times. They just did not capitalize on it.

C (9:49)

Yeah, and you mentioned politics, because a lot of what you're hearing from Washington Post leadership is the path to profitability runs through politics. But it looks like the Post has been kind of fighting with one hand behind its back. Nate Silver pulled data from a news aggregation site that basically tracks which news and politics stories other people are linking to. He kind of uses it as a way to figure out which outlets are driving coverage of big political stories. And over the past 30 days, New York Times is kind of dominating that. A 14% mindshare, if you will. Washington Post ranked fourth, only 5% mindshare. And that is a massive divorce from the historical norms. If you go back to that first Trump presidency, the Washington Post was actually ranking higher than the New York Times at that point, despite having a smaller newsroom staff. And basically, people are just reading between the lines and saying, Bezos has made a concerted effort to not cover Trump as much. He wants to survive this second Trump presidency rather than cover it in the way they did in the first Trump presidency. So that is one of the things that, if you're saying that politics is going to be where the profits come from, why are you making us not cover Trump as much as we did in the previous term?

B (10:58)

Yeah. One prime example of this that definitely hit the Post bottom line was in 2024, the Washington Post editorial page wrote an endorsement of Kamala Harris, and then Jeff Bezos killed that. And that led to an absolute exodus of subscribers. They lost 250,000 subscribers during the aftermath of when they canceled the Kamala Harris endorsement. So an absolute massive loss in subscribers. And you can help juxtapose what's going on at the Washington Post with what's happening around digital media more broadly, specifically the New York Times. The New York Times reported earnings Yesterday. They added 1.4 million digital only subscribers in 2025. They are on path to hit 15 million by the end of 2027. They're absolutely killing it. Bundle format. So they have subscript. They get people in through games. They get people in through their lifestyle verticals. They get people in through news. By the end of the fourth quarter, just over half of its total subscriber base paid for access to multiple products. That is just one area where critics of Bezos's regime at Washington Post say you had all the wind at your back and you didn't diversify your revenue sources like the New York Times like some upstarts like Semaphore, like, like, you know, more regional papers like the Boston Globe or the Philly Inquirer, who are absolutely killing it right now.

C (12:10)

I said the path of profit really lies through politics, but really it lies through the mini crossword in world. All right, moving on. As attention turns towards the super bowl, your friend who stinks at sports betting might have their eyes glued to another platform where they can also stink at sports betting Prediction Markets While platforms Polymarket and Kalshi have risen in status and popularity over the past years, the Big Game is set to bring a big spike in volume. Already, more than $161 million have been wagered on super bowl event contracts on Kalshi over far outpacing the 27 million bet on last year's Eagles Chiefs matchup. Kelsey says that 90% of the total volume it processes is on sports, as users flock to what is a de facto sportsbook with national availability. However, the fact that lots of money is being splashed around on these platforms is not necessarily a good thing for the people doing the splashing. According to a report from Equity Research analysts at Citizens, users on prediction market sites were losing proportionally more money than than their counterparts on traditional gambling sites like FanDuel and DraftKings. Kosi did push back on that report, saying that the data was, quote, flat out wrong and born of a conflict of interest. But it still left a black eye on a platform as it gears up for a skyrocketing demand ahead of Sunday's game. Neil, you can use these platforms to bet on everything from Jesus's return to what the US tariff rate on the EU will be by July 1st. And yet most people just use these platforms to gamble on sports.

B (13:39)

This this analysis does cut to the heart of the value proposition that Kalshee and Polymarket do promise. They say that we are a more level playing field than sportsbooks because when you're talking about DraftKings or FanDuel, you're playing against the house. So the pricing is not so good for you. Any time you go into a casino and leave $300 down, you know, you know how the house always wins. We instead offer it's just Peer to peer, you're playing against other folks. And then a user on X pointed out that, well, this is not surprising that people lose more on Cauchy and Polymarket prediction markets than on sportsbooks, because on sportsbooks you're flipping a coin, whereas on prediction markets, you are taking the other side of insider trades. And that's been a huge criticism of, of Polymarket and Kalshee. But diving into this analysis, it's pretty stark. And yes, we should, we should remind you that Kalshee did push back on this data, but the report from Citizens showed that the median prediction market wallet lost about 7% of the money wagered in the first 90 days of activity, compared with a 1% loss on other forms of gambling.

C (14:40)

And one sector of the prediction market that I want to call your attention to for the super bowl specifically is not the players on the field. It's actually the announcers in the booth. The NFL announcer mentioned markets are popping off this year. Basically, they are wondering whether certain phrases will be spoken on air. And you can bet on this. Phrases like Taylor Swift, what a catch. Concussion protocol, roughing the password. These all have their own little markets set up there. And we have seen this in the financial world already, where what, what people will say on earnings calls is bet upon. Brian Armstrong, who's the CEO of Coinbase, literally read the list out loud. He pulled up the polymarket list for what words people think he would say and read them all. So talk about, like, insider trading.

B (15:28)

Yeah. What's stopping it from just saying, hey, minions, like, go put $100,000 in all of these words?

C (15:34)

It's exactly the criticism. And so now that is infiltrating into the sports world as well. People don't like that you can just decide market outcomes in real time with one single person. So the league has kind of been mum on this so far. All NBC who's broadcasting the super bowl has been mum on this. But I think this is a snowball that is gathering steam because what do you mean that you're waiting for, you know, Jim Nance to say safety for $100,000? That is not necessarily what they want people betting on when it comes to the Super Bowl. All right, we're going to take a quick break and come back with Neil's numbers right after this.

B (16:11)

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C (16:22)

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B (16:31)

If your revenues are at least in the seven figures, get our free business guide demystifying AI at netsuite.com/brew that's netsuite.com/brew Toby is desperate for me to find a girlfriend because double dates with his landlord aren't going well. The point is, I am single, but I'm excited because I'm doing something about it. I just joined the league and it feels different. It's built for people who value their time and want dating to actually go somewhere. Instead of spending hours scrolling, I get a curated batch of profiles each day. Less noise, less back and forth. Only people who are worth my time. Because more isn't better, better is better. Join me on the league and find someone in yours. Download the app and apply today. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will spark two hours worth of arguments in your group chat. My first number is about the meteoric rise of food delivery, a mealtime doordashing revolution that has transformed the way Americans eat, budget, socialize and live. The pandemic supercharged the habit, and it has not gone away. According to the New York Times, the number of US Households getting food delivered has roughly doubled since the beginning of COVID to the point where in 2024, almost three of every four restaurant orders were not eaten at a restaurant. In a National Restaurant association survey, about one third of American adults said they order food delivery at least once a week. Some take it to the extreme. One San Diego woman told the Times that she orders about 200 to $300 worth of food delivery per week, which on the low end would account for about 20% of her $50,000 annual salary. Another 36 year old man said he decided to cut back after scanning his credit card report and realizing he spent one third of his money ordering in. This generated loads of debate online. Critics use these anecdotes to argue that the widely discussed affordability crisis was mostly just people being financially irresponsible and spending beyond their means. After all, no one needs to Uber eats $300 a week. Others push back, saying that food delivery is indispensable for super busy parents or other folks who may not have the time to sneak out of the house for dinner. Toby, whichever side you fall on, there's no denying that food delivery has become an economic and cultural force.

C (18:40)

I'm going to take the side of the people who are arguing on behalf of food delivery because basically they're saying that I have more time to socialize with my friends or take care of my kids because I have the ability to order doordash or Uber eats or something like that. But then I'm also going to immediately undercut myself and say that a lot of people are using it to replace, you know, social traditions. Like you used to sit around a table and eat dinner with your friends or your family. Now a lot of people say that they forced the fact that they're getting their food delivered. They go eat on the couch or something like that. You just don't have that same ritual anymore. So I think the social component, not even talking about the monetary component, has far reaching implications literally based on how we are gathering around to do like a very fundamental thing which is share a meal with someone else.

B (19:31)

One activity it's definitely seems to be killing. Not killing, but hurting is cooking. There is this report from the Wisconsin School of Business. They found that when food delivery platforms entered counties in the United States, residents spend an average of 9% less time cooking each day than they did before food delivery companies came in.

C (19:49)

I'm spending 9% spent less time cooking these days. But it's because my knife skills have improved. I've been practicing on it even though I am wearing a bandage right now because I recently got my.

B (19:57)

I've seen your dice. It's pretty tight. For my next number, Amtrak dipped its toe into the fashion world selling a tracksuit. Get it? That'll cost you $279. The two piece branded tracksuit went on sale last week through Monday with a price tag that almost matches the cost of a one way Amtrak ticket from New York to Boston. The goal is to drum up excitement for the next gen, a seller, Amtrak's newest high speed trains that launched last summer in the Northeast. The outfit is designed to embody the quote, premium comfort, modern design and elevated experience of the new trains. The tracksuit is the handiwork of Anastasia Lukinskaya, a student at the New York School of Design. When Amtrak introduced its new trains last year, it held a competition in partnership with the School of Design to determine the look and Anastasia proved victorious in the ready to wear category. But is anyone actually buying the new Amtrak merch? One exec told the Washington Post that yes, they surpassed their goal, but declined to share specific civics. Toby is NBD Fashion Authority. Would you wear an Amtrak branded tracksuit?

C (20:54)

The fact that I'm the Fashion authority in this group says more about maybe you than actually me. I do think it is cool. I've oscillated back and forth on this, but there is sort of this kind of irony to it that makes it more of a collector's item than people would probably like to admit. I think back to 2020, when the US Postal Service dropped, did a merch drop and people kind of went crazy over it because there is something very funny about government agencies kind of like trying to make streetwear in a way. And I do think that's where Amtrak nailed it. Here is the fact that the silhouette is something that kids would wear. Like this baggy tracksuit look is very much in right now. So the fact that it has the Amtrak branding on top of that cool silhouette, I think people would buy it and wear it ironically, but also maybe not ironically.

B (21:41)

You know, there's something that Gen Z and millennials agree upon. It's high speed rail.

C (21:44)

Yeah, they love trains.

B (21:45)

They just love trains. Ok, for my final number, a whole lot of you are taking a break from work to work on yourselves. Call it a skill cation or curiosity leave. In Hilton's 2026 trends report, 72% of people said they want to take time off from their jobs to explore a personal passion, skill or hobby. And according to the booking platform, get your guide. More Americans said they'd prefer to come back home from their trip with a new skill than a physical souvenir. More than one third of Gen Z said they want to learn a new hobby on vacation. While the site saw a 66% rise in workshop bookings last summer compared to the year before. Hospitality companies are seizing on the opportunity. Airbnb launched an experiences feature last spring to help travelers level up, while hotels in places like Sea Island, Georgia offer classes such as Mastering the art of Falconry, whether it's learning how to surf, cook, weave, birdwatch, do yoga, take photographs. Tourists seem to be shifting away from the pina colada stained beach read toward adventures that will have them coming home as a better version of themselves. Toby, Eat, pray, Love is now. Eat, pray, grind.

C (22:47)

I know, and that is what some skeptics are saying, that skillcations are not good for you because what do you mean? That productivity culture is somehow bleeding into your off hours vacation days.

B (22:57)

But that's so cynical.

C (22:59)

I know it's cynical, but like, it is true.

B (23:00)

Like, what do you mean?

C (23:01)

You just relax, Just sit on the beach and relax. But there is some, you know, psychological reasons why skill locations sometimes feel more relaxing than just doing nothing. 1. If you are going out and doing stuff, not just sitting on a lounge chair all day, you get more physically tired, so you often end up sleeping better at night too. You have mental distraction from the things that are grabbing your attention back to work. So like instead of checking your email, you go on a falconry mission. I don't even know what you call when you're learning falconry, but you're not thinking about work anymore. And then also just the sense of accomplishment when you learn a new skill like that is very psychologically satisfying for people. So I am team skill location. I think that is unsurprising to people I don't really like just just chilling on the beach. Falconry though is not something I've checked off my list. Now let's sprint to the finish with some final headlines. Google reported earnings yesterday and crushed it. Seriously. Annual revenue exceeded 400 billion for the first time. Quarterly revenue hit 114 billion. Cloud revenue, which came in slightly soft at rival Microsoft, were up 48% year over year at the Goofy. And yet if you glance at its stock after hours, you'd see red. Because hey, big spender. Google expects capital expenditures of between 175 and $185 billion in 2026, up from 90 billion last year, and the most any company has pledged to spend on chips, data centers, and everything else to support their AI ambitions. The market is getting nervy about that sort of spending of late, but Google has an effective solution for those worries. Lots and lots of people are actually using its AI. Its Gemini app now has over 750 million monthly active users, 100 million more than it had in October. Neil. While its big tech brethren are getting pulled over for speeding tickets, Google got off with a warning because it's doing pretty dang well.

B (24:52)

You're hearing calls that this is the best business the world has ever seen. It's doing $400 billion in annual revenue, 25% margin, 18% sales growth. It's spending the GDP of small countries on data centers. It is diversified across tech and media and advertising. And this is just an insane business that, that, that has very few comparisons. I do want to talk about YouTube, though, because YouTube is absolutely killing it. YouTube eclipsed more than $60 billion in sales last year. That's more than every entertainment company on earth besides Disney. YouTube shorts averages 200 billion daily views. That means the on earth is watching 25 YouTube shorts every single day.

C (25:37)

The fact that YouTube makes more money than Netflix. Netflix is the streaming king. And yet YouTube is the actual streaming king because it's just a moneymaking machine.

B (25:48)

Finally, if you've procrastinated on nabbing a reservation for Valentine's Day dinner, fear not. A fast food chain is ready to step in. McDonald's is launching a Valentine's Day McNugget Caviar Kit, available for free on February 10th.

C (26:01)

10Th.

B (26:01)

That combines a $25 gift card to buy McNuggets with a 1 ounce tin of Siberian sturgeon caviar. With a high low pairing, McDonald's is taking its cue from social media, where videos of nuggets topped with fish roe have been popular for years. It's a long shot attempt to grab a bigger slice of the Valentine's Day market. Valentine's Day is huge for restaurants. It's the second busiest night for dining out only after Mother's Day. But fast food chains like McDonald's aren't necessarily the first places you think of for a romantic dinner. McDonald's and its peers like White Castle, Papa John's and Chick Fil A are leaning into iron humor to at least put their name in the conversation.

C (26:35)

All the jokes that stem from this is honey, I got us the hottest reservation in town and you sit down at McDonald's and have a little caviar on a nugget. I will not speak ill of caviar on nuggets, though it is good. Like the little salty combination with the crispy nugget. We've had it at a New York City restaurant. Coconut. It's delicious. Like, I love a little creme fraiche on there as well. So this is a good idea. Obviously, it's just more for the memes than anything, but. But McDonald's, if you wanted to expand it nationwide or if you need someone to taste test it, I'm your guy.

B (27:08)

I mean, this is going to sell. I need to get. I need to get this. I actually do really want this, but it's a crazy value. You get it for free. But the sturgeon costs $85. And the $25. How many McNuggets do you think $25 will get you?

C (27:23)

It's like 160.

B (27:24)

I would say 166.

C (27:25)

Unfortunately, I order a lot of McDonald's because I should not know that.

B (27:30)

Okay. That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. If you want to get in touch, send an email to Morning Brew daily at Morning Broadcom or DM us on Instagram at Daily Show. Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair makeup is busy with homework on vacation. Devin Emery is our president, and our show is a production of Morning Brew.

C (27:53)

Great. So did I, Neil. So let's run it back tomorrow.