Unity stock falls alongside Take-Two, Roblox after Google’s Project Genie launch

Investing.com -- After a challenging 2025 where artificial intelligence concerns weighed heavily on application software stocks, 2026 offers potential for improved sentiment as AI-related risks appear less significant than initially feared. Morgan Stanley has identified several standout performers poised to benefit from this shifting landscape.

While broad upward estimate revisions remain limited, selective opportunities exist within the sector. Here are the top application software companies positioned for success in 2026:

HubSpot

Despite maintaining high-teens growth throughout 2025, HubSpot Inc (NYSE:HUBS) experienced significant multiple compression, with shares down 55% on a next-twelve-months basis. As one of the few established platform plays serving SMBs, HubSpot’s value proposition becomes increasingly important for customer retention as businesses seek to extract value from AI insights across the front office.

Upmarket momentum and multi-hub consolidation provide long runways for growth, while credit consumption is emerging as a potential upside driver based on strong AI product engagement. Trading at approximately 4.5x EV/Sales, HubSpot offers compelling value compared to broader SaaS at 5.5x.

HubSpot has seen several analyst actions, with Stifel and BMO Capital lowering their price targets, citing software multiple compression and SMB concerns, respectively. In contrast, Citi reiterated its Buy rating and opened a 30-day upside catalyst watch on the company.

Klaviyo

Shares compressed roughly 40% on an EV/NTM Sales basis during 2025 amid concerns about growth durability and potential pressure from ’agentic commerce.’ However, Klaviyo Inc (NYSE:KVYO) is entering an emerging platform status with its Service offering, a suite of tools specifically built for direct-to-consumer brands—a historically underinvested niche.

Management suggests full adoption of the expanded portfolio could drive a 2-3x ARPU uplift, positioning Klaviyo for estimate upside while maintaining best-in-class growth of at least 21-22% in 2026.

In recent news, Klaviyo reported that its customers generated a record $3.8 billion in Klaviyo Attributed Value during the Black Friday weekend, a 27% year-over-year increase. The company also appointed Chano Fernandez as co-CEO to share leadership responsibilities with co-founder Andrew Bialecki.

Wix

Despite delivering accelerated revenue growth against tough price-benefitted comparables, Wix.Com Ltd (NASDAQ:WIX) saw its EV/NTM FCF multiple compress by over 50% through 2025.

Multiple catalysts for 2026 include Base44 becoming a more material driver to the model, with management setting a floor for blended business profitability at mid-20s FCF margin, and the launch of a new Self-Creators product to re-engage growth in Wix’s largest customer segment.

Trading at approximately 6x EV/CY27 FCF, improved execution could attract investors back to this stable core business.

Wix.com announced its Board of Directors has authorized a $2 billion share and convertible note repurchase program for fiscal years 2026-2027. The company also launched Wix Harmony, a new AI-powered website builder.

Amplitude

Upgraded to Overweight from Equal-weight, Amplitude Inc (NASDAQ:AMPL) stands to benefit from capturing increased digital product user behavior data as GenAI accelerates development of mobile and web applications.

The company has worked through optimization headwinds from Covid-era contracts while experiencing tailwinds from broader digital product development. Multi-product adoption presents a long runway for growth, with Agents offering an opportunity to better tie the portfolio together.

A recent development saw Amplitude report that its annual recurring revenue (ARR) showed 15.8% year-over-year organic growth in its latest quarter. The company also announced the acquisition of InfiniGrow, an AI marketing analytics company, to enhance its platform’s capabilities.

BlackLine

Named as the Back Office Top Pick, Blackline Inc (NASDAQ:BL) shows strong probability of positive estimate revisions and accelerating growth following three years of strategic changes.

Q3 results demonstrated strength with new customer bookings up 45% year-over-year and average new deal size up 111%. Management now expects gross bookings growth of 15% in Q4 and 20% in FY26, with constant currency ARR projected to accelerate from 7% to 10-11% by Q4 2026.

BlackLine acquired WiseLayer, a company specializing in AI-powered agents for finance and accounting, to integrate into its platform. Separately, activist investor Engaged Capital announced its intention to nominate four director candidates to the company’s board.

Descartes

With trough shipping volumes likely in the past, organic growth is expected to accelerate into FY27/CY26 as Descartes (NASDAQ:DSGX) continues gaining market share, laps easy year-over-year comparisons, and benefits from a professional services refresh cycle.

Following a recent 7% workforce reduction, increasing operating leverage should drive accelerating adjusted EBITDA growth to 15%+ and EPS growth to 20%+.

Navan

Positioned as an AI beneficiary, Navan Inc (NASDAQ:NAVN) is leveraging technology to accelerate growth by automating customer service and travel agent functions, leading to market share gains.

With proprietary travel content and data creating a defensible moat, the company offers an attractive opportunity at 4x CY27 Sales, below peers at 5x, while maintaining 20%+ growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Rocket Companies (NYSE:RKT) stock fell 12% Friday after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chairman and following disappointing results from PennyMac Financial Services (NYSE:PFSI).

The mortgage originator’s shares tumbled alongside other companies in the sector, with loanDepot (NYSE:LDI) dropping 4% and UWM Holdings (NYSE:UWMC) declining 9% during the session. The sector-wide sell-off came as investors processed Trump’s announcement that Warsh would replace current Fed Chair Jerome Powell when his term ends in May 2026.

PennyMac Financial Services, which provides mortgage services similar to Rocket, reported that its Servicing segment net revenue fell 22% YoY to $153.9 million, significantly below analyst estimates of $233.3 million. The segment handles loan servicing for newly originated loans under holding for sale and loans serviced for others.

The double blow of potential changes in monetary policy leadership and weak industry results appeared to weigh heavily on investor sentiment toward mortgage companies, which are particularly sensitive to interest rate expectations and housing market conditions.

Warsh, a former Federal Reserve governor who served during the 2008 financial crisis, has previously advocated for monetary policy normalization, raising questions about the future direction of interest rates and their impact on the mortgage industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- U.S. stocks fell Friday, as investors digested the news that President Donald Trump has nominated Kevin Warsh to be the next Federal Reserve chairman along with more heavyweight corporate earnings.. 

At 09:45 ET (14:45 GMT), the Dow Jones Industrial Average fell 140 points, or 0.3%, the S&P 500 index dropped 22 points, or 0.3%, and the NASDAQ Composite slipped 90 points, or 0.4%.

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Warsh nominated for Fed chair role

Trump has nominated former Fed governor Kevin Warsh for the role of chairman of the Federal Reserve, potentially starting in May when the role is vacated by current chair, Jerome Powell.

In his post on Truth Social announcing Warsh’s nomination, Trump outlined the reasons why Warsh’s past experience will equip him to be a "GREAT" chairman.

"He has conducted extensive research in the field of Economics and Finance," Trump wrote, crediting Warsh for issuing an independent report to the Bank of England "proposing reforms in the conduct of Monetary Policy in the United Kingdom".

He also noted Warsh’s previous tenure in the Federal Reserve, last time as a member of the Fed’s board of governors between 2006 and 2011. 

Warsh -- who had lost out to current Chair Jerome Powell for the post in 2017 -- has largely aligned himself with Trump’s calls for lower rates in the past year, but was a long-time critic of the ultra-loose monetary policy pursued by the Fed since the financial crisis, including the central bank’s expanded balance sheet.

"Warsh is a net negative for markets given his extremely hawkish comments in the past about QE and his desire to implement a ’regime change’ at the Fed," said analysts at Vital Knowledge, with a note. "It’s not clear what exactly ’regime change’ means, but there has NOT been the same type of clamoring in markets for a wholesale, revolutionary shift in the Fed as there has been at the White House, and investors are nervous about too much tinkering."

This nomination is set to clear out a major point of uncertainty for Wall Street, as investors fret over the long-term trajectory of lending rates in the country.

But Warsh’s potential nomination also comes amid heightened concerns over the Fed’s independence, especially amid growing calls from the White House that the central bank cut rates aggressively. 

Additionally, Trump publicly endorsed a bipartisan spending deal negotiated by Senate Republicans and Democrats that would avert a looming government shutdown, posting support on Truth Social and urging cooperation.

The compromise would fund most federal agencies while leaving contentious immigration issues for further negotiation.

Reports said Democrat and Republican leaders had also agreed to the deal, although it remained unclear when Congress will vote on the matter. Lawmakers have until midnight, Friday, to release more spending for the federal government. 

Apple’s iPhone sales beat expectations

In the corporate sector, there are more earnings from the likes of Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), American Express (NYSE:AXP), Verizon (NYSE:VZ), Regeneron Pharmaceuticals (F:REGN) and Aon (NYSE:AON) due later in the session.

After the close Thursday, Apple (NASDAQ:AAPL) comfortably beat profit and revenue expectations for the holiday quarter, its fiscal first quarter, enjoying its best quarterly iPhone sales growth performance in over four years.

iPhone sales jumped 23.3% year-on-year to $85.27 billion, marking the biggest increase since the fourth quarter of 2021.

The tech giant also forecast higher-than-expected revenue growth of up to 16% for the March quarter, powered by strong demand for its iPhones and a sharp rebound in China and accelerating demand in India.

Still, Apple’s shares slipped over 1% lower as sales in other parts of the company were less positive.

Wearables and accessories, which include things like the Apple Watch and AirPods, fell by roughly 3%. Sales of Mac computers were down by just over 7%.

Elsewhere, Verizon (NYSE:VZ) stock rose after the telecoms giant reported fourth-quarter earnings and revenue that exceeded expectations, while providing an upbeat outlook for 2026 that signals the beginning of a strategic turnaround. 

SanDisk (NASDAQ:SNDK) shares surged after the storage-chip maker delivered a significant profit beat and raised guidance, as demand for data-center and AI-related memory products outpaced forecasts.

Chevron (NYSE:CVX) stock rose after its oil major’s fourth-quarter profits fell but came in ahead of estimates as it focused on cutting costs and making its operations more efficient to contend with lower crude prices throughout 2025.

Regeneron Pharmaceuticals (F:REGN) stock dropped after the U.S. drugmaker’s fourth-quarter earnings fell, even though it was helped by strong demand for its eczema treatment, Dupixent. 

Visa (NYSE:V) stock slipped lower despite the credit card company beating first-quarter earnings and revenue expectations, as some investors reacted to a shortfall in total transactions processed and persistent caution around broader consumer spending trends.

Gold falls sharply lower

Gold prices fell sharply Friday, retreating from record levels following the news that President Trump has nominated Warsh for the next Federal Reserve Chair later in the day.

Warsh s seen as less dovish than other potential candidates, and this resulted in the U.S. dollar bouncing, to the detriment of commodities denominated in the greenback. 

Spot gold slid 5.2% to $5,091.77 an ounce, after earlier briefly dropping below $5,000/oz, while gold futures for April fell 4.2% to $5,112.90/oz.  

That said, prices have risen more than 16% so far in January, heading for a sixth straight monthly gain and the largest monthly advance since 1982.

Other precious metals also cooled on Friday after logging wild swings this week. Spot silver slid 12% to $100.083/oz, tumbling from a Thursday record high, while spot platinum slid 12% to $2,288.25/oz. 

Oil prices edged higher, bouncing after earlier losses, and adding to a three-day rally, on track for hefty weekly gains as traders focused on potential U.S. military action against Iran. 

Brent futures slipped 0.5% to $69.94 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $65.77 a barrel.

Both benchmarks were set to gain over 7% this week.

The Organization of Petroleum Exporting Countries and allies, known as OPEC+, is set to meet on Sunday, with recent reports indicating that the cartel is likely to keep its output unchanged.

Ambar Warrick and Ayushman Ojha contributed to this report

Investing.com -- Wolfe Research raised its price target on Nvidia to $275 from $250 saying rack-scale systems, higher average selling prices and sustained margins will drive earnings well beyond current expectations.

Nvidia recognizes revenue when it sells completed boards to cloud service providers, after manufacturing and packaging at TSM and board assembly at Foxconn.

Those boards account for about 75% of the final rack price, according to Wolfe’s supply chain checks.

Reported prices are about $3 million for GB200 NVL72 racks and $4.3 million for GB300 NVL72, with next-generation Rubin racks seen at $5 million to $6 million.

Wolfe estimates Blackwell rack shipments reached about 1000 units per week by the end of calendar 2025 and will hold that pace through 2026, implying 50000 to 60000 racks for the year.

It expects Rubin to ramp in the second half of 2026 without delays, helped by design changes that simplify assembly, and models a similar 1000-per-week run rate.

Wolfe forecasts about 55000 Blackwell racks and 20000 Rubin racks in 2026, rising to 55000 Rubin racks and 15000 Rubin Ultra racks in 2027. It expects Nvidia to continue shifting its mix toward rack-scale systems, with slower growth in HGX and other standalone platforms.

Those volumes translate into about 7.2 million data center GPU units in 2026, up 35% year on year, and 9 million units in 2027, up 25%. Wolfe models data center revenue exceeding $450 billion in 2027, driven by unit growth and roughly 20% higher ASPs as Nvidia moves from Blackwell to Rubin.

For Rubin Ultra, Wolfe assumes rack pricing of about $10 million, reflecting a doubling of GPUs per rack. It said this is conservative, noting that higher pricing could add $10 billion to $12 billion in revenue for every additional $1 million per rack above its estimates.

Wolfe expects Nvidia to sustain pricing power and gross margins around 75%, citing continued generation-on-generation performance gains and limited competitive pressure at the high end.

It sees 2027 estimates of $457 billion in data center revenue and $11.50 in EPS, with a bull case of $500 billion and $12. The new target values the stock at about 23 times bull-case earnings.

Investing.com -- London’s FTSE 100 edged higher on Friday as markets weighed U.S. President Donald Trump’s pick of Kevin Warsh to lead the Federal Reserve, with European shares advancing and the pound slipping below $1.38.

As of 1403 GMT, the blue-chip index rose 0.3%% and the British GBP/USD fell 0.4% against the dollar to 1.3752.

DAX index in Germany gained 0.8%, the CAC 40 in France rose 0.6%.

UK round up

AstraZeneca PLC (ST:AZN) will pay Chinese drugmaker CSPC Pharmaceutical Group up to $18.5 billion in a licensing deal for experimental obesity and weight-related drugs, CSPC announced Friday.

The agreement includes an upfront payment of $1.2 billion, with potential additional payments of up to $17.3 billion if certain milestones are met. This deal expands on existing collaboration between the companies in areas including artificial intelligence.

In other market news, Airtel Africa Plc (LAGOS:AIRTELAFRI) shares fell approximately 6%, reversing early gains despite reporting strong third-quarter results. The telecommunications company posted a 31.0% increase in EBITDA to $836 million in constant currency terms, with margins expanding to 49.6%, up 278 basis points year-over-year. The results were driven by strong revenue growth in Nigeria and mobile money services.

Meanwhile, Antofagasta PLC (LON:ANTO) shares dropped more than 4.8% following a downgrade by UBS from "buy" to "neutral." UBS cited limited near-term growth momentum after the Chilean copper miner’s shares surged approximately 135% over the past 12 months on a total shareholder return basis in U.S. dollars, outperforming copper prices by roughly 90% and the COPX index by about 40%.

In the financial sector, Schroders PLC (LON:SDR) has held high-level discussions about potential partnerships to boost growth in its private capital business, according to Reuters. The British asset manager reportedly explored deals for Schroders Capital with French investment firm Wendel and London-listed Bridgepoint Group. These previously undisclosed talks, which took place several months ago, have since been paused for reasons that remain unclear.

Regarding monetary policy, Deutsche Bank expects the Bank of England to keep its Bank Rate at 3.75% in its February decision. The German bank forecasts a 7-2 vote split, with external Monetary Policy Committee members Alan Taylor and Swati Dhingra likely to favor a rate cut. Deutsche Bank analysts pointed to signs of economic resilience in the UK despite a fragile labor market, where unemployment has reached 5.1% in the three months to October.