Morning Brew Daily – February 5, 2026

"AI Sparks Software Stock Meltdown & Bezos Axes 30% of Washington Post Staff"

Hosts: Neal Freyman & Toby Howell

Episode Overview

In today’s episode, Neal and Toby tackle the week’s most dramatic business shakeups: a catastrophic sell-off in software stocks amid AI disruption fears and a wave of layoffs gutting the Washington Post under Jeff Bezos. Additional segments cover the explosive rise of prediction markets ahead of the Super Bowl, the evolving landscape of food delivery and “skillcations,” and quirky business headlines like Amtrak’s fashion debut and McDonald’s caviar McNugget kits for Valentine’s Day. Throughout, the discussion blends sharp analysis with the hosts’ signature wit.

Main Stories & Discussion Points

1. AI-Induced Software Stock Meltdown

Starts at 02:56

• What Happened:
  Major software stocks plunged, shedding nearly $1 trillion in market value over the past week following AI developments. The immediate trigger was Anthropic’s launch of legal tools for their AI cloud cowork agent, which led to panic selling in companies like LegalZoom, Thomson Reuters, Equifax, Intuit—and eventually across the entire SaaS sector.

  • "By the end of the day, software companies had lost $300 billion in value and yesterday brought even more selling." – Neal (03:36)
  • "Some are calling it the SaaS apocalypse, the beginning of the end for the software as a service industry." – Neal (03:57)

• Market Sentiment:
  Analysts described the rout as indiscriminate and not fully related to business performance:

  • "There's clearly indiscriminate selling across the entire software cluster." – Toby (04:24)
  • Even companies like ServiceNow, which reported strong earnings, saw their market cap plummet.

• Notable Quotes from Leaders:

  • Jensen Huang (Nvidia CEO) on the selloff:
    "He called it 'the most illogical thing in the world.' He said that AI is going to use existing tools...Would you use a hammer or invent a new hammer?" – Neal (05:46)
  • Sundar Pichai (Alphabet CEO):
    "I think it is an enabling tool...there's no need to go reinventing the wheel when the wheel works just fine." – Toby (06:10)

• Money Flows:
  Massive rotation out of growth software stocks and into defensive consumer staples (e.g., food, hygiene), per Bank of America.

  • "Buyers have been pouring into consumer staples stocks at the fastest pace on record." – Toby (06:28)

• Historical Context:
  For years, the software sector had been a sure bet for beating the S&P 500, but in days, all of that outperformance vanished.

  • "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." – Neal (07:26)

2. Washington Post Mass Layoffs under Bezos

Starts at 07:40

• What Happened:
  The Washington Post, after 13 years of Bezos's ownership, announced layoffs impacting a third of its staff (with entire sections like the book section being shut), aiming to refocus on national news and politics.

  • "The book section shut down. International news desk hollowed out. Sports section a shadow of what it once was." – Toby (07:45)

• Business Rationale & Criticism:
  Leadership cited steep financial losses and declining traffic. However, critics targeted Bezos's strategic choices.

  • "You had all the wind at your back and you didn't diversify your revenue sources like the New York Times." – Neal (11:09)
  • "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.'" – Toby (08:47)

• Politics-First Strategy—But With a Catch:
  Although the Post aims to bank on political coverage, it’s lagging in influence:

  • Nate Silver’s analysis: "New York Times...14% mindshare, Washington Post ranked fourth, only 5% mindshare." – Toby (09:49)
  • "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?" – Toby (10:40)
  • Example: “In 2024, the Washington Post editorial page wrote an endorsement of Kamala Harris, and then Jeff Bezos killed that. And that led to... 250,000 subscribers during the aftermath.” – Neal (11:08)

• Comparison to The New York Times:

  • NYT added 1.4M digital-only subscribers in 2025, on track for 15M by 2027, excelling with bundles (news, games, lifestyle) and diversified revenue streams.

3. Prediction Markets & Super Bowl Betting

Starts at 12:10

• Surge in Volume:
  Platforms like Polymarket and Kalshi see record per-event betting volume for the Super Bowl.

  • "Already, more than $161 million have been wagered on Super Bowl event contracts on Kalshi, far outpacing the $27 million on last year’s matchup." – Toby (12:20)

• Controversy—Are Users Losing More?
  Equity Research analysts at Citizens report prediction market users lose proportionally more than on traditional sportsbooks, though Kalshi disputes the data.

  • "The report from Citizens showed that the median prediction market wallet lost about 7% of the money wagered in the first 90 days...compared with a 1% loss on other forms of gambling." – Neal (14:12)

• Funny/Controversial Markets:
  Users are betting on what phrases NFL announcers will say (e.g., "Taylor Swift," "what a catch"), raising questions about market manipulation.

  • Brian Armstrong (Coinbase CEO) once read the list of bettable phrases aloud during an earnings call. – Toby (15:07)
  • "What’s stopping it from just saying, ‘Hey, minions, go put $100,000 in all these words?’" – Neal (15:28)

Neil’s Numbers: Data Stories of the Week

Starts at 16:11

1. Food Delivery’s Lasting Impact

• US households getting food delivered has doubled since COVID; nearly 3 of 4 restaurant orders are now eaten outside the restaurant (via delivery or takeout).
  • "In 2024, almost three of every four restaurant orders were not eaten at a restaurant." – Neal (17:06)
• One anecdote: a woman in San Diego spends $200–$300 a week on delivery, ~20% of her $50,000 salary.
• Debate: Is this contributing to the “affordability crisis” or justified as a timesaving tool for busy people?
• Decline in cooking at home (average 9% less time spent cooking after delivery platforms enter a county).
  • "Residents spend an average of 9% less time cooking each day." – Neal (19:31)

2. Amtrak’s $279 Tracksuit

• Amtrak entered the fashion world with a $279 branded tracksuit—more costly than a one-way NY-Boston train ticket.
  • "The tracksuit is the handiwork of Anastasia Lukinskaya...at the New York School of Design." – Neal (20:14)
• Hosts debate the appeal and irony of government agency streetwear.
  • "There is something very funny about government agencies kind of trying to make streetwear." – Toby (21:09)

3. The Rise of ‘Skillcations’

• 72% of Hilton's survey respondents want to take time off work to learn a new skill or hobby.
  • "Tourists seem to be shifting away from the piña 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." – Neal (22:40)
• Some skepticism about productivity culture “bleeding into your off hours,” but noted mental health/relaxation benefits of active vacations.

Quick Business Headlines & Memorable Moments

Starts at 23:44

• Google Earnings:

  • $400 billion in annual revenue, $114 billion last quarter. Cloud revenue up 48% year-over-year.
  • "This is the best business the world has ever seen...It’s diversified across tech, media and advertising." – Neal (24:52)
  • YouTube passes $60B in sales, more than Netflix or any streamer besides Disney; 200 billion daily YouTube Shorts views.

• McDonald’s Valentine’s Day “McNugget Caviar Kit”:

  • Limited-time offer pairs a $25 nugget gift card with $85 caviar.
  • Hosts joke about the "ironic" romance and the oddity of fast food in the Valentine’s space.
    • "I will not speak ill of caviar on nuggets, though—it is good...I love a little crème fraiche on there as well." – Toby (26:36)
    • "How many McNuggets do you think $25 will get you?" – Neal (27:23)
      "It’s like 160." – Toby (27:24)

Notable Quotes

• On Software Stock Selloff:
  "We are now in an environment where the sector isn’t just guilty until proven innocent, but is now being sentenced before trial." – JP Morgan analyst, cited by Neal (03:53)

• On Bezos & The Post:
  "They wrote that the cuts are a sign that Jeff Bezos...has not yet figured out how to build and maintain a profitable publication on the Internet." – Neal (08:56)

• On the Culture of Food Delivery:
  "No one needs to Uber Eats $300 a week. Others push back: food delivery is indispensable for super busy parents or...who may not have the time to sneak out of the house for dinner." – Neal (17:33)

Segment Timestamps

• [02:56] – Software stock crash/A.I. disruption
• [07:40] – Washington Post layoffs & Bezos’s press legacy
• [12:10] – Prediction markets & Super Bowl betting
• [16:11] – Neil's Numbers (food delivery, Amtrak fashion, skillcations)
• [23:44] – Quick news (Google earnings, McDonald’s caviar nuggets)

Tone & Takeaways

The hosts maintain an accessible, conversational tone with doses of humor (“Eat, Pray, Grind”; “They just love trains”). There’s skepticism about overblown gloom in software stocks and about blaming food delivery for personal finances, while also poking fun at trends like government-sponsored streetwear and luxury fast food. Listeners gain big-picture business insight and a preview of how tech, media, and consumer habits are rapidly pivoting as 2026 unfolds.