Investment Review №339. Playing Defense

Anthropic, CrowdStrike, Zscaler

Anthropic’s launch of Claude Code Security triggered an emotional sell-off across the cybersecurity sector—but investors are conflating apples with oranges. This product is strictly a developer tool for static code scanning; it does not replace core infrastructure or network defense, the bread-and-butter of traditional cybersecurity stalwarts. In reality, pristine code ≠ runtime security. No code analyzer stops phishing, credential theft, insider social engineering, or DDoS attacks. Meanwhile, AI-driven code generation accelerates dev cycles, ballooning cloud workloads that firms like CrowdStrike (CRWD) and Zscaler (ZS) must defend in real time. The market’s knee-jerk drop post-launch doesn’t break the long-term bull case for the sector.

Share of Incidents by Attack Vector (%)
Source: Verizon DBIR 2024, ENISA Threat Landscape 2025
Note: Vectors are not mutually exclusive — a single incident may involve multiple.

 

Deere & Company

Deere’s 1QFY26 sets a moderately positive tone. Equipment revenue rose 18% YoY to $8bn ($9.6bn total), beating company volume guidance, but net income fell 25% YoY to $656m on margin pressure and an unfavorable sales mix. Large machinery remains weak, particularly in North America, with rising production costs further squeezing profitability. Small ag and construction equipment show resilience, powered by lawn/garden demand recovery and robust infrastructure activity, including data center construction. Management calls 2026 a “cycle trough”, expecting mid-single-digit total equipment growth, supported by a robust backlog and neutral price/cost dynamics, even after $1.2bn in tariffs. 

PT: $570; Recommendation: Hold.

 

DE Price Performance
Source: FactSet

 

Paramount Skydance, Warner Bros. Discovery, Netflix

On February 23, 2026, the final day of the 7-day window, Paramount Skydance presented Warner Bros. Discovery’s (WBD) board with an enhanced all-cash buyout offer. Unofficial sources peg it at ~$32/share.

In December 2025, WBD agreed to sell its studios (Warner Bros.) + streaming (HBO, Max) to Netflix for $27.75/share (~$82.7bn), spinning off the TV assets into Discovery Global, distributed to WBD shareholders. 

On February 10, 2026, Paramount countered with a $30/share (~$108bn) offer for the entire company, absorbing Netflix’s $2.8bn breakup fee and a $0.25/share quarterly ticking fee. The WBD board rejected that offer on February 17 as insufficient, allowing Paramount to improve its bid.

If the $32/share figure is confirmed, Paramount’s bid would likely outstrip the Netflix deal for shareholders, given the uncertain value of the Discovery Global spin-off. Netflix then has 4 business days to respond. WBD shareholders are set to vote on the final deal on March 20, 2026.

WBD Share Price
Source: FactSet

 

Nebius Group

On February 12, 2026, Nebius Group N.V. (NBIS) reported 4Q25 results and 2026 guidance. The company missed consensus on revenue and adj. EBITDA, while its 2026 guidance came in slightly below expectations. ARR more than doubled sequentially to $1.25bn, beating last November’s forecast of $0.9–1.1bn. 2026 ARR guidance remains $7–9bn, unchanged, but contracted capacity targets rose from 2.5+ GW to 3.0+ GW by year-end. Investors responded positively, pushing shares up >12% post-release. Confidence was supported by management’s clear CAPEX financing strategy, relying on a modest debt component. 

 

Dynamics of Key Financials of Nebius Group N.V.
Source: FactSet, Nebius Group N.V., Freedom Broker

 

Walmart

Walmart reported 4Q revenue of $129.2bn, beating consensus, with >5% YoY top-line growth and global online sales up 24%. Looking ahead, management expects FY27 revenue growth to slow to 3.5–4% YoY, while operating profit growth should remain stronger at 6–8%, though operating margins stay low at ~5%. Market reacted negatively, sending shares down 9% from $135 highs ahead of the report, with the stock now trading at a P/E >45x, well above online retail leader Amazon (AMZN). 

WMT Revenue and Revenue Growth
Source: FactSet