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Matt Phillips2h

ServiceNow slips despite beating Q4 earnings expectations

Cloud software giant ServiceNow delivered better-than-expected Q4 sales and earnings after the close of trading on Wednesday, though the shares slipped in after-hours trading.

The company reported:

Revenue of $3.57 billion, higher than the $3.53 billion analyst consensus estimate published by FactSet.
Adjusted earnings of $0.92 per share vs. the $0.88 analysts expected.
Subscription revenue of $3.47 billion vs. the $3.42 billion predicted.
Raised guidance for Q1 subscription revenues of between $3.65 billion and 3.655 billion, compared to the $3.58 billion FactSet consensus estimate.
Non-GAAP gross margins of 80.5%, a little light compared to the 81.1% FactSet consensus estimate.

Despite the better-than-expected results, the stock was down after-hours. ServiceNow also announced an expanded AI partnership with Anthropic, in which it will enmesh Anthropic’s Claude models more deeply into its products, alongside its financial results.

Such efforts to more closely associate itself with the AI boom have fizzled so far. ServiceNow shares have plunged 45% over the last year. And investors clearly remain skeptical after the Q4 numbers.

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Matt Phillips2h

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Max Knoblauch2h

Southwest climbs on stronger-than-expected 2026 earnings guidance

Southwest Airlines posted its fourth-quarter and full-year earnings after the bell on Wednesday. Its shares climbed more than 4% in after-hours trading.

The airline, one of the big four US carriers, guided for revenue per seat mile to climb “at least 9.5%” in the first quarter, and costs per seat mile to rise 3.5%. It forecast a 1% to 2% boost in capacity for Q1.

For the full year ahead, Southwest said it expects adjusted earnings of $4 per share, ahead of Wall Street estimates of $3.22.

The carrier, which flew its last open-seating flight on Tuesday, posted Q4 adjusted earnings of $0.58 per share, slightly above the $0.57 per share expected by Wall Street analysts polled by FactSet. Southwest’s passenger revenue rose 7.6% to $6.79 billion in the fourth quarter, beating estimates of $6.77 billion.

Tesla beats on EPS and revenue, says it has invested $2 billion into xAI

Tesla reported Full Self-Driving subscription numbers and a list of cities where it says Robotaxi is expanding in the first half of 2026.

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Tasha Matsumoto, Luke Kawa

Stocks waver as all eyes are on Big Tech earnings

The S&P 500 finished flat as investors awaited tonight’s postmarket earnings from Meta, Microsoft, and Tesla.

BISHOP'S STORTFORD, ENGLAND - JANUARY 25: Snowfall in the Essex countryside on January 25, 2021 in Bishop's Stortford, Essex, United Kingdom.

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Matt Phillips4h

Seagate soars after earnings as Wall Street gushes

Seagate Technology Holdings soared Wednesday, with a nearly 20% gain shortly after 2 p.m. ET that put the once staid maker of hard disk drives on track for one of its best days of the last decade.

Seagate reported strong earnings results after the close of trading on Tuesday, prompting a parade of positive published comments from Wall Street analysts.

The Street gushed over high sales prices and customer orders for data centers and cloud computing providers stretching out to 2028. Analysts were also heartened by the rollout of Seagate’s next-generation hard disk product, known as heat-assisted magnetic recording (HAMR), which has now been “qualified” or approved for use by major US cloud service providers. Some examples:

Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”

Morgan Stanley: “We continue to be amazed by the strength of this HDD [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given CSP [cloud service provider] data storage demand.”

Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.”

Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”

Wedbush Securities: “The company has qualified HAMR at all US customers as minimizing any concerns around STX’s execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX’s continued ramp of HAMR.”

Seagate’s remarkable surge raises the prospect of a reacceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard disk drives, the low-cost data storage products that are nonetheless crucial for managing the torrent of data that AI usage is producing.

The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282%, respectively. If anything, the rally seems to be picking up steam, with Seagate up 62% year to date and Western Digital up about the same amount not even a month into 2026.

Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”

Morgan Stanley: “We continue to be amazed by the strength of this HDD [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given CSP [cloud service provider] data storage demand.”

Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.”

Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”

Wedbush Securities: “The company has qualified HAMR at all US customers as minimizing any concerns around STX’s execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX’s continued ramp of HAMR.”

Seagate’s remarkable surge raises the prospect of a reacceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard disk drives, the low-cost data storage products that are nonetheless crucial for managing the torrent of data that AI usage is producing.

The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282%, respectively. If anything, the rally seems to be picking up steam, with Seagate up 62% year to date and Western Digital up about the same amount not even a month into 2026.

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