Podcast Summary: The Compound and Friends

Episode: HALO Stocks, Spotify Beats, Robinhood Reports
Date: February 10, 2026
Hosts: Josh Brown (“A”), Michael Batnick (“B”)

Episode Overview

This episode dives into the current dominant investing theme of 2026: "HALO" stocks—companies with Heavy Assets and Low Obsolescence risk—and explores key earnings from Spotify and Robinhood. Josh and Michael debate AI’s disruptive impact on the tech sector, shifting market leadership, investor behavior, and the health of various industries. The hosts combine timely, data-driven analysis, their trademark candor, and a dose of market humor.

Key Discussion Points and Insights

1. Riding the Market Wave & Current Sentiment

• Josh opens the episode in high spirits, claiming:

  “I have the market in the palm of my hand. I've never felt more alive and connected with the tape as I do today.” (00:20)

• Michael keeps it grounded:

  “You're doing great work... This is the most exciting tape that we've had in a long time. It's been bold.” (01:50)

2. “HALO” Stocks — Defining the 2026 Theme

• HALO = Heavy Assets Low Obsolescence
• These are companies largely insulated from fast-moving AI disruption, unlike asset-light software names.
• Josh breaks down the thesis:

  “Ask yourself... can an LLM replicate what this company makes or sells or can it not? ...If the answer is no, then my friends, you have a HALO stock on your hands.” (05:53)

• This reverses a 15-year market preference for asset-light, high-margin businesses now more exposed to AI risk, especially SaaS and software.
• HALO stocks span several sectors: energy, materials, consumer staples, healthcare, and industrials.
• Examples: Delta Airlines, Pepsi, Walmart, JNJ, Chevron, Coca-Cola, Merck, Caterpillar.

3. The Rotation and Broadening: Or Just “HALO” in Action?

• The hosts critique the use of “rotation” and “broadening” to describe what's arguably a more structural shift in market leadership.

  "People are looking at their holdings and they're saying, is Anthropic about to [mess] this company's life up or not?" (09:34)

• Investors are “HALO refugees,” fleeing SaaS/software risk for companies with difficult-to-replicate physical assets.
• Data Point: 149 stocks in the S&P 500 are within 5% of 52-week highs, many of which fit the HALO profile. (12:17)

4. AI and Software Crushed: The Bear vs. Bull Debate

• Bear Case:
  • Referencing Goldman Sachs’ analogy:

    “Software stocks are like newspaper stocks in 2002... an average decline of 95% between 2002 and 2009.” (14:14)

  • Fear is so intense that even stellar earnings can't offset worries about AI-driven obsolescence.

    “Even if earnings deliver, we're still not giving these stocks the same multiples." (15:27)

• Bull Case:
  • Counterpoints from J.P. Morgan and Morgan Stanley: Sell-off is overdone, flush is almost complete, and some sectors (e.g., cybersecurity) remain essential.

    “Positioning in IGV has now been completely flushed... almost nobody left to sell.” (22:11) "Retail came running in and bought the dip, dude. Retail is no longer the dumb money." (22:44)

5. Overreactions and “Gel-Mann Amnesia”

• Michael describes the absurdity of Schwab and Raymond James stocks dumping 10% on an Altruist AI tool launch, relating it to "Gel-Mann Amnesia," a phenomenon where we trust reporting on topics we don't know after seeing mistakes in areas we do.

  "It's when you see something in the newspaper that you're an expert on... and you say that's the dumbest thing I've ever heard, and then you believe the next page." (25:00)

6. Sector and Market Breadth Data

• Energy (+20% YTD), Materials (+16.4%), Consumer Staples (+12.3%) leading in total return, all fitting HALO archetype. (28:53)
• Small and mid-caps (with real assets) are outperforming, while staples like Coke are historically overbought.
• Even UPS now “best in market” due to their HALO status. (39:18)

7. Margins, Macro, and Market Health

• Discussion of falling gross margins in mega caps due to AI “arms race” spending.

  “Gross margins among the top 50 stocks... fallen from 55.7% to 50.6% in one month... the lowest since 2012.” (37:09)

• Despite this, the hosts see the HALO shift plus strong consumer/industrial spending as bullish for the broader market.
• Breadth at new highs—historically a bullish set-up.

  "It's hard to make the case that the market is peaking when you have so many stocks going up." (34:48)

• Caution: the new market winners must deliver on earnings to sustain this.

8. Earnings Deep-Dive: Spotify

• Spotify’s business fundamentals are strong despite negative sentiment:
  • 300M+ users engaged in “Wrapped” campaign (Q4 2025).
  • Metrics: Revenue up 13% YoY, gross profit up 20%, operating income up 50%, 293M premium subscribers. (58:40-59:23)
• Market is skeptical about streaming saturation and competition for attention.
• Josh:

  “Spotify is one of the last things I could personally cancel... it is so important in my life.” (57:56)

• Takeaway: Spotify is a “monster business” but high valuation and regulatory barriers may deter acquisition.

9. Earnings Deep-Dive: Robinhood

• Robinhood is still heavily dependent on options and crypto trading revenue.
  • Crypto remains significant, contrary to some narratives.
  • Margin interest income surged: $196M in 90 days. (46:27)
  • Net interest revenue: $411M, user deposits growing.
• Headwinds:
  • Monthly active users declined 1.9% (Q4).
  • Operating expenses and compensation rising.
  • Bear Case: user blowups and cannibalization risk from new products—e.g., prediction markets.
  • Quote:

    “I just think... that is, I'm making this up, 3% of their users... I don't think all the users... But you just showed me the margin number. That can't be three [percent]." (50:03-50:16)

10. Riff on “DeGen DAO” and Tragic Growth Stocks

• Many hot “2021” stocks (GameStop, AMC, Peloton, Zoom, DocuSign, Block, etc.) have suffered 70-80% catastrophic declines and never recovered—classic cautionary tale for stock pickers. (53:21-53:35)

11. Other Market Themes: Travel & “Event” Stocks

• Travel/hospitality (“HALO-adjacent”) crushing it: Marriott and Hilton at highs; Expedia lagging due to susceptibility to AI disruption. (61:54-64:57)
• Josh notes Marriott/Hilton’s branding/loyalty model as “asset-light” but protected—leaning on both old and new themes.

12. “Make the Case”: IMAX as a HALO Winner

• Michael’s only personal stock: IMAX
  • Strong brand, growing international exposure, tracking to best year ever.
  • Demographics: young, diverse audience.
  • Huge event movies (e.g., “Odyssey,” “Dune 3”) expected to deliver record returns. (65:37-68:59)
  • IMAX outperforms thanks to unique, non-replicable assets (giant screens, global franchise).

13. “Mystery Chart” — Broker-Dealers as a Locus of Volatility

• Josh presents a sub-industry ETF comprising broker-dealers and exchanges (e.g., Goldman, Schwab, Robinhood, CME, NASDAQ).
  • Notes that AI and volatility could create “fireworks” in this group.

Notable Quotes

• Josh Brown:
  • “People are looking at their holdings and they're saying, is Anthropic about to [mess] this company's life up or not?” (09:34)
  • “Claude cannot give you a Diet Pepsi or a bag of Fritos.” (11:14)
  • “Spotify is one of the last things that I could personally cancel.” (57:56)
• Michael Batnick:
  • “Retail is no longer the dumb money. They've bought a lot of successful dips.” (22:47)
  • “It's Gel-Mann Amnesia... you see something in the newspaper you're an expert on... you laugh, then flip the page and believe it.” (25:00)
  • “Their bear case is the bull case for the 65% of companies that are beneficiaries of all this.” (38:06)

Timestamps for Key Segments

• 00:13–02:45: Opening, Market “feeling,” HALO stock theme introduced
• 05:01–09:57: Defining HALO stocks; asset-light vs asset-heavy; AI risk
• 14:14–17:56: Goldman vs. Morgan Stanley—AI risk and software stock outlook
• 24:44–25:26: “Gel-Mann Amnesia” and market overreactions
• 28:53–31:14: Sector performance—Energy, Materials, Staples outperform
• 33:14–37:09: Mega cap margins, capex, and potential overbuild risk
• 43:02–50:16: Robinhood earnings—crypto, options, margin, user trends
• 54:35–59:23: Spotify—earnings, user growth, competitive/media landscape
• 61:54–64:57: Travel stocks—Marriott, Hilton, Expedia analyzed
• 65:37–69:28: Michael’s “Make the Case”: IMAX as a HALO stock
• 69:45–71:50: “Mystery Chart”: Broker-dealers and market dispersion

Tone and Final Thoughts

The episode maintains an energetic, conversational tone, blending hard data with humor, skepticism, and frank bewilderment at market extremes. The hosts emphasize that, while AI disruption fears dominate sentiment and have battered software, the real winners in 2026 are companies with capital-intensive assets and entrenched, non-replicable status. HALO is the theme to watch, but both hosts caution that market narratives and sector leadership can change on a dime—especially if corporate earnings start to disappoint.

Bottom Line: The “HALO” theme could define the remainder of 2026, but careful stock selection and skepticism about both hype and hysteria remain essential.