Morning Market Brief | Feb 19, 2026 | No Landing Scenario and AI Civil War

Technology, AI, and Semiconductors • Meta & Nvidia Partnership: Meta has agreed to deploy millions of Nvidia processors over the next few years. This includes the new "Blackwell" generation chips and, for the first time, Meta will use Nvidia’s CPUs in its standalone servers. • Nvidia’s Investment Moves: Regulatory filings (13Fs) revealed that Nvidia exited its stakes in Applied Digital and Recursion Pharmaceuticals, causing their shares to drop. Conversely, Nvidia disclosed a new stake in Synopsys, sending its stock higher. • AI "CapEx Bubble" Debate: There is growing debate regarding the massive capital expenditure (CapEx) by tech giants. While some investors fear an "AI bubble" and are rotating into other sectors, others, like Battery Ventures (which just raised $2.5 billion), believe the market is simply maturing and that AI will expand the total software market. • Anthropic’s New Model: AI startup Anthropic launched a new model (Claude 4.6) capable of performing complex, multistep actions on a computer, such as filling out forms and coordinating between tabs. • Apple’s Wearables: Apple is reportedly accelerating the development of AI-powered hardware, including smart glasses (targeted for 2027), new AirPods with cameras, and a wearable pendant. Corporate News and M&A • Warner Bros. Discovery & Paramount: Warner Bros. has agreed to reopen negotiations with Paramount. Paramount has been given a short window (until Monday) to submit a "best and final" offer that is superior to a previously agreed-upon deal to sell parts of the business to Netflix for $27.75 per share. • Madison Square Garden Sports: The board unanimously approved exploring a spinoff of the New York Knicks and New York Rangers into two distinct publicly traded companies. Analysts estimate the Knicks could trade at $10 billion and the Rangers at $4 billion. • eBay Buys Depop: eBay announced it is acquiring the fashion marketplace Depop from Etsy for $1.2 billion in cash. eBay also reported earnings that beat revenue estimates. • Stock Movers: ◦ Palo Alto Networks: Shares fell over 6% after cutting its profit outlook due to heavy spending on acquisitions. ◦ Carvana: Shares dropped ~15-22% after missing adjusted EBITDA estimates. ◦ DoorDash: Shares fell 5% after missing EPS estimates and providing a weaker-than-expected outlook. ◦ Wingstop: Shares jumped (up to 20% intraday) after beating earnings expectations. US Economy, Politics, and Policy • 2026 Tax Cuts: The Trump administration is highlighting new tax cuts for 2026, including no tax on tips, overtime pay, or Social Security for seniors. The plan also includes a $6,000 "senior bonus" deduction and deductibility for auto loans on US-made cars. • Government Shutdown: A partial government shutdown affecting the Department of Homeland Security (DHS) entered its fifth day. The standoff is over demands to reform ICE, specifically regarding the use of masks by agents and the requirement for judicial warrants. • Japan-US Trade Deal: Japan plans to invest $36 billion in US energy and critical minerals projects, including a natural gas plant in Ohio and an oil export facility in Texas, as part of a new trade agreement. • Fed Minutes & Inflation: Federal Reserve minutes signaled renewed concern about "sticky" inflation. Some policymakers suggested they might need to raise rates if inflation stays above goal, dampening hopes for immediate cuts. • NYC Taxes: New York City’s Mayor has proposed a property tax hike if the state Governor does not pass a wealth tax to address budget shortfalls. Geopolitics • Iran Tensions: The US has moved significant military assets to the Middle East, including dozens of fighter jets and two aircraft carrier strike groups, amid stalled nuclear talks. While the White House states diplomacy is the first option, markets are pricing in a higher risk of military strikes, pushing oil prices up ~4%. • Russia-Ukraine Talks: Peace talks in Geneva, mediated by Jared Kushner and Steve Witkoff, have stalled. Ukrainian President Zelensky accused Russia of dragging out negotiations, while the US is reportedly pressuring Ukraine to make a deal. Meanwhile, Russia continues to hold firm on territory demands. • ECB Leadership: Christine Lagarde is expected to step down as ECB President before her term ends in October 2027, reportedly to allow French President Macron and the German Chancellor to choose her successor before French elections. Commodities and Sports • Soybeans: Brazilian soybean production is expanding, intensifying competition with the US. However, a post by President Trump suggested China might increase its US soybean purchases to 20 million tons, sparking record trading volume in futures. • NFL Changes: The NFL is rebranding the Pro Bowl to "The Pro Bowl Games," featuring flag football instead of tackle, as part of a push to include flag football in the 2028 Olympics.