Q4 Earnings Split the Market as CPI Approaches and Software Weakens

Pre-Market Context

Q4 earnings concluded with a clear divide.

Companies that adapted to shifting trade dynamics stabilized margins and execution.

Companies exposed to tariff-sensitive demand showed revenue pressure and weaker forward visibility.

The result is a structurally split tape.

Participation is narrowing. Leadership is selective. Index-level clarity remains limited.

Earnings Breakdown

PINS — Growth Without Monetization Expansion

Revenue came in slightly below expectations while net income declined materially year-over-year. User growth remained stable.

Advertising sensitivity to retail margin compression continues to weigh on monetization. Management is shifting focus toward SMBs and international exposure to reduce reliance on large U.S. retailers.

Structure takeaway:

Top-line stability without margin expansion limits upside repricing. The stock requires evidence of improving monetization to shift structure constructively.

ROKU — Transition to Operating Leverage

Revenue expanded double digits with positive net income for the full year. Platform revenue continues to lead growth.

The shift from growth-only narrative to operating leverage changes the structural profile. Forward guidance implies margin expansion rather than purely user expansion.

Structure takeaway:

Improving profitability supports higher-quality participation if pullbacks hold support.

COIN — Revenue Diversification vs Balance Sheet Volatility

Revenue missed expectations while trading volume expanded significantly year-over-year. Subscription and services revenue continued to grow.

Mark-to-market crypto exposure remains a structural volatility driver. Equity pricing remains sensitive to underlying crypto beta.

Structure takeaway:

Diversification improves stability, but price structure will continue to reflect crypto volatility cycles.

RIVN — Cost Compression Phase

Losses narrowed versus expectations with positive gross profit achieved for the first time. Liquidity remains substantial.

The upcoming R2 platform materially reduces production cost structure.

Structure takeaway:

The transition from niche premium EV manufacturer to scaled operator is underway, but execution remains the gating factor. Structure must confirm sustained margin expansion.

Semiconductor & Trade Framework

Recent U.S.–Taiwan trade adjustments signal longer-term supply chain repositioning rather than short-term policy shifts.

Tariffs were reduced, trade barriers adjusted, and domestic production commitments outlined. However, the feasibility of large-scale semiconductor relocation remains uncertain.

Implication:

Domestic semiconductor infrastructure remains strategically important. Structural positioning within the group depends on policy execution rather than headlines.

Market Structure

QQQ

Lower highs are confirmed on the daily timeframe.

The 50-day moving average is acting as resistance. Volume expanded on weakness.

Software deterioration accelerated this week, contributing to index pressure.

Preparation framework:

A confirmed reclaim of resistance would shift short-term structure.

Continued rejection maintains downside pressure.

No anticipation of inflection — only response to confirmation.

CPI — Event Risk

Consensus expectations remain centered around modest month-over-month inflation readings.

Options markets are pricing a measurable move in the S&P 500.

Current backdrop:

• Fragile growth structure

• Defensive rotation building

• Software under pressure

• Energy leadership intact

Preparation:

Higher-than-expected inflation would likely reinforce defensive positioning.

Softer readings could stabilize risk assets if resistance levels are reclaimed.

The reaction at key levels will matter more than the data headline.

Sector Rotation

Energy — Relative Strength

Order flow remains constructive across integrated energy and services. Trend structure remains intact relative to the broader tape.

Leadership remains valid unless higher highs and higher lows begin to fail.

Consumer Defensive — Stability

Defensive participation increased during recent index weakness.

In higher-volatility conditions, capital rotation toward earnings stability is typical. Relative strength within this group warrants monitoring.

Industry Groups

Constructive Structure:

• Integrated Energy

• Oil & Gas Services

• Select Semiconductors

• Drug Manufacturers

Deteriorating Structure:

• Software Infrastructure

• Software Applications

• Asset Management

• Capital Markets

Selective exposure remains necessary. Broad index momentum is absent.

Execution Principles

• Respect confirmed lower highs

• Avoid bottom anticipation

• Prioritize relative strength

• Reduce exposure in deteriorating structure

• Let event reactions confirm bias

The market is divided.

Preparation remains centered on structure, probability, and disciplined response.

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