The Tech Divorce

JAN. 29, 2026

The Mag 7 isn't a squad anymore. It's a custody battle. We break down who gets the Cookiez.

MARKET PULSE

The market hit a milestone yesterday. S&P 500 touched 7,000 for the first time ever.

Then Jerome Powell held rates steady at 3.5%-3.75%, said inflation is "elevated," and reminded everyone that uncertainty is still running the show.

The celebration lasted about 30 minutes.

Today?

Absolute carnage in tech… and the Magnificent 7 got absolutely battered.

The Magnificent 7 is having a civil war.

INSIDER EDGE

THE GREAT TECH DIVERGENCE

Yesterday after the bell, three of the biggest names in tech dropped earnings at the same time. Same day. Same market. Completely different outcomes.

Down 12% today.

Here's the thing: they actually beat on earnings ($4.14 vs $3.97 expected) and revenue ($81.3B vs $80.3B expected). Didn't matter.

Azure cloud growth came in at 39%, down from 40% last quarter.

One percentage point. That's all it took.

Capex hit a record $37.5 billion in Q2 alone. The street wanted accelerating growth. They got margin compression and a gross margin at its narrowest in three years (68%).

The AI spending is real.

The returns? Still TBD.

Up 8% today after jumping as high as 10% after hours.

Zuck delivered across the board. EPS of $8.88 crushed the $8.19 estimate. Revenue of $59.9 billion beat the $58.4 billion consensus.

And then the capex bomb: Meta is guiding $115-135 billion in AI spending for 2026. That's nearly double the $72 billion they spent in 2025.

The Metaverse jokes are dead. This is now an AI advertising machine and the market is eating it up.

Beat on earnings ($0.50 vs $0.45 expected). Beat on revenue ($24.9B vs $24.8B expected). But posted its first-ever annual revenue decline in company history. Full year revenue dropped 3% to $94.8 billion. Net income cratered 61% in Q4 to just $840 million.

The stock popped 2% after hours on robotaxi hopium, then gave it all back today, down 1.2%. Elon promised Dallas, Houston, Phoenix, Miami for robotaxi rollouts in H1 2026. We've heard this before.

THE TAKEAWAY

The "Mag 7" isn't a monolith anymore. Over the past 12 months, the group has returned only +8.9%, lagging the broader market. Meta and Microsoft have been the weakest. The easy money "buy all tech" trade is over. Stock picking is back.

Strip out the Mag 7 contribution and S&P 500 Q4 earnings growth drops from +9.2% to +6.3%. Tech is still carrying the index, but the divergence is widening.

GOLD WATCH

GOLD: TAKING A BREATHER OR TOPPING OUT?

Gold hit an all-time high of $5,600 yesterday. Then it did what gold does after a parabolic run: it puked.

Down over 4% today to $5,140. The fastest pullback since October.

What happened?

The Fed held rates at 3.5%-3.75% as expected. Two officials wanted to cut immediately, but the majority said inflation is still too hot. Trump basically said he doesn't care if the dollar dies. Geopolitical tensions with Iran are escalating. All of this should be bullish for gold.

But when an asset runs 60%+ in a year and hits 50+ all-time highs, profit-taking is inevitable. The RSI has been above 80 for weeks. Overbought doesn't mean "sell," but it does mean "respect the volatility."

Down 4% to $5,140. Fastest pullback since October.

The setup going forward: The structural bull case is intact. Central banks are still buying. ETF inflows are strong. The dollar is at 4-year lows. Fiscal concerns aren't going anywhere. World Gold Council says a 15-30% surge is possible if we hit a "doom loop" scenario of falling yields and elevated geopolitical stress.

But short-term? This pullback could have legs. Support sits around $4,800-$5,000. If you're looking to add, that's your zone. Don't chase the high.

VIBE CHECK

THE MARKET'S IDENTITY CRISIS

The S&P 500 touched 7,000 for the first time in history yesterday. A milestone that should've had champagne popping. Instead, it felt like a funeral.

Here's the vibe check:

The index closed basically flat after the Fed's press conference. Today it's down 0.7%. The Nasdaq is getting mogged, down 1.6%. Real Estate, Healthcare, and Consumer Staples are all red. Energy is the only sector with aura right now, up 0.7%.

The problem: The market is bifurcated. IBM is up 7%. Caterpillar is up 4%. Old economy names are eating. Meanwhile, Microsoft is having its worst day in years.

This is what a rotation looks like. Money is flowing out of high-multiple AI bets and into value plays that actually produce cash flow. Meta alone is planning to spend $115-135 billion on AI capex this year.

The Suits keep glazing AI spending as "investment for the future." The market is starting to ask: "When does the future arrive?"

THE BLUEPRINT

HOW TO PLAY THIS

IF YOU'RE LONG TECH

Trim the winners. Meta looks strong today, but one bad quarter and it gives it all back. Microsoft is in freefall, down 12% and testing support levels not seen in months. Don't be a Squatter holding bags hoping for a bounce.

IF YOU'RE LONG GOLD

This pullback is healthy. The trend is your friend until it isn't. $4,800-$5,000 is the buy zone if you want to add. Stop loss below $4,500 if the thesis breaks.

IF YOU'RE SITTING IN CASH

The S&P just failed at a major psychological level (7,000). That's not necessarily bearish, but it's a signal to be patient. Let the earnings dust settle. Apple reports tonight. Alphabet and Amazon next week. The picture will get clearer.

The Macro Backdrop

This is a market that wants to go higher but keeps tripping over its own feet. The path of least resistance is still up, but the easy gains are behind us. 2026 is going to be a stock picker's market. The index-huggers will get mid returns. The ones who do the work will eat Cookiez.

BOTTOM LINE

Tech is divorcing itself. Microsoft beat and still got destroyed. Meta crushed and is flying. Tesla is stuck in limbo between car company and "physical AI company."

Gold got too hot and is cooling off. That's not bearish. That's normal.

The S&P touched 7,000 and immediately face-planted. The Landlord isn't cutting rates anytime soon. And the market is starting to realize that spending $100+ billion per company on AI infrastructure requires actual returns at some point.

Don't panic. But don't get complacent either.

This is the part of the cycle where the winners separate from the losers. Pick your spots. Respect your stops. And remember: the Cookiez only count when you take them.

Tonight: Apple earnings after the bell. If Cook delivers, tech might bounce. If not, the rotation accelerates.

Set your alerts. Touch grass. We'll be watching.

DISCLAIMER

This newsletter is for entertainment and educational purposes only. We are not financial advisors. We are a bunch of apes who figured out how to use a Bloomberg Terminal and a group chat at the same time.

Nothing here is financial advice. We don't know your risk tolerance, your portfolio, or how many times you've panic-sold at the bottom. Do your own research. Talk to an actual licensed professional before you YOLO your savings into anything we mention.

Past performance doesn't guarantee future results. The market doesn't care about your feelings, your conviction, or your "diamond hands." If you can't afford to lose it, don't trade it.

We may hold positions in securities mentioned. Trade at your own risk. Eat Cookiez responsibly. 🍪