The Week by the Numbers
"Uncertainty is the friend of the buyer of long-term values." — Warren Buffett
Broadcom's AI Revenue Doubled in a Year — and the CEO Isn't Done
Broadcom reported $8.4 billion in AI semiconductor revenue for its fiscal first quarter, up 106% year-over-year and above its own forecast, driven by custom AI accelerators and networking chips ordered by Google, Meta, OpenAI, Anthropic, and two other hyperscalers. On the earnings call, CEO Hock Tan raised the stakes further, predicting that AI chip sales would reach "significantly in excess of $100 billion" in fiscal 2027 — a number that made analysts do a double take. For context, Broadcom's total revenue was around $36 billion just three years ago. The AI capital expenditure cycle is not slowing down. If anything, Broadcom's backlog suggests we're still in the early innings.
Source: Broadcom Inc. — Q1 FY2026 Earnings Release
The Services Sector Is Quietly Hitting Multi-Year Highs
February's ISM Services PMI registered 56.1 — the highest reading since November 2022 and well above the 53.5 consensus estimate. It's the 20th consecutive month of expansion for the sector, and for the first time since March 2021, all 10 sub-indexes reported expansion simultaneously. Services account for roughly 70% of U.S. economic output, so this print carries more weight than the manufacturing numbers that tend to dominate the headlines. Beneath a week of war coverage and oil prices, the underlying economy is running remarkably hot.
Source: Institute for Supply Management — Services PMI Report, February 2026
Target's Stores Are Still Losing Shoppers — But February Changed the Conversation
Target reported a 3.9% comparable store sales decline in its fiscal fourth quarter — the fourth consecutive quarter of falling foot traffic — as middle-income consumers pulled back on apparel and home goods. But new CEO Michael Fiddelke buried the lead: February sales turned "healthy and positive" for the first time in over a year. The company is also building something new alongside its struggling stores: membership revenue more than doubled year-over-year, same-day delivery surged 30%, and advertising revenue posted double-digit growth. Target in 2026 is trying to be two companies at once. The market will eventually make it choose.
Source: Target Corporation — Q4 2025 Earnings Release
Jobless Claims: The Labor Market Isn't Buckling — It's Just Barely Breathing
Initial jobless claims for the week ending February 28 came in at 215,000 — slightly above the prior week's 212,000 but still near the low end of recent ranges. Continuing claims rose by 46,000 to 1,868,000, suggesting the unemployed are taking a little longer to find new work. This labor market has a consistent pattern: very few people are getting fired, and not many are getting hired. That equilibrium has kept the unemployment rate stable, but it leaves no margin for error — and tomorrow's February nonfarm payrolls report, with expectations clustered somewhere between 60,000 and 130,000, could finally force a reappraisal.
Source: U.S. Department of Labor — Unemployment Insurance Weekly Claims
AI Is Great for Chips. It's Quietly Destroying Software Stocks.
The iShares Expanded Tech-Software Sector ETF is down roughly 19% year-to-date, even as Nvidia, Broadcom, and other AI hardware names surge to records. The market is making a specific bet: that large language models will erode the revenue streams of established enterprise software companies — Salesforce, ServiceNow, Adobe, and their peers — the same way streaming eroded cable. These aren't small companies; together they represent trillions in market cap. And the AI boom creating the largest capex cycle in tech history may simultaneously be hollowing out the business models of the companies that used to charge for the software AI is increasingly replacing. It's still a thesis, not a fact. But the market is pricing it like it's settled.
Source: iShares / CNBC