TOP STORY
📈 Coinbase Surges 16% Despite Worst Quarter in 2 Years

🔴 This week, the stock market posted its worst week of the year as AI fears continued to intensify. Across the indexes:

• The S&P 500 was down 1.39%

• The Nasdaq 100 was down 1.37% (it’s 5th loss in a row)

• The TSX rose +1.86%

🤖 Much of the discussion this week centered around the “SaaSpocalypse” (which we covered in detail 2 weeks ago) as investors worry that AI will displace white-collar workers (and therefore software stocks like Salesforce and Intuit), with Microsoft’s AI chief saying that most white-collar jobs will be “fully automated” within 12 to 18 months.

✨ The one silver lining was the inflation report on Friday, which showed inflation slowed to 2.4% in January, its lowest reading since May, and a bigger slowdown than economists expected (a key data point for the interest rate cut decision in March).

😬 And while lower inflation is generally good news for a rate cut, FedWatch still has the probability of ‘no cut’ at 90%, so I wouldn’t get your hopes too high that the Fed will come save the day…

😰 But despite this week’s big drop, looking at 2026 overall, there’s a big disconnect between how the market is performing and how investors are feeling. Even though the S&P 500 is only down -0.33% year-to-date, the year has felt much rougher for many investors, in part due to the collapse of many popular retail stocks:

• Hims & Hers Health ($HIMS) is down 48% in the past month

• Reddit ($RDDT) is down 43% in the past month

• Pinterest ($PINS) is down 45% in the past month

✅ We’ll dive into why later in the buzz, but let’s start things off on a much-needed positive note…

📈 Amidst the bloodbath this week, one stock emerged as an unlikely winner, up 16% on Friday despite posting its worst quarter in two years: Coinbase ($COIN).

🤿 So without further ado, let’s dive into Coinbase’s earnings and its share price surge, plus a rundown on some of retail’s biggest underperformers.

📊 Coinbase’s Worst Quarter in 2 years

🔍 One of the world’s largest crypto exchanges, Coinbase, officially reported its Q4 2025 earnings this week, and to put it lightly… it’s had brighter days:

• ❌ Revenue hit $1.78 billion vs. $1.85 billion expected, down 22% year-over-year

• ❌ Earnings per share hit $0.66 vs $0.92 expected, down 80% year-over-year

• ❌ Coinbase posted a $667 million net loss, ending an eight-quarter profitability streak

🚀 But despite the dismal results, the stock surged 16% on Friday, ending the week in the green, with CEO Brian Armstrong saying he’s “more bullish than ever.”

💰 The Pivot to the “Everything Exchange”

💰 Coinbase earns most (56%) of its revenue from exchange trading fees, and most of what’s traded on its platform is crypto. That means when crypto trading is up, its revenue goes up, and when crypto trading is down, its revenue goes down.

🎢 This model has long been the driver of Coinbase’s volatile financials, which piggybacked off the trading movements of the crypto industry as a whole.

😰 And recently, with major cryptos like Bitcoin ($BTC) and Ether ($ETH) plummeting by 41% and 55% over the past 6 months, Coinbase’s trading-fee business model was hit hard.

📉 And as crypto falls, Coinbase’s stock price has also suffered, with the stock falling 53% over the past 6 months.

🔄 But Coinbase has been making moves to diversify its revenue streams, with a recent push into prediction markets and derivatives (in addition to its current crypto and equity offerings) and a heavier emphasis on its stablecoin business.

💬 According to CEO Brian Armstrong:

⭐️ Coinbase is now being seen as the “Everything Exchange,” something that helped push the stock higher despite crypto fears.

📊 Analysts Maintain Buy Rating Despite Rough Quarter

💹 The “Everything Exchange” strategy is clearly resonating with analysts.

🎯 Despite the brutal Q4 miss, analysts saved the day for Coinbase, with top analysts maintaining their buy ratings.

🔥 Most notable was Bernstein, which maintained a $440 price target, saying investors are “overlooking the exchange’s resiliency” and that the stock is “too cheap to sell.”

✅ Other analysts maintained their buy rating on Coinbase stock even as they lowered their target price. While the average price target has dropped from ~$400 three months ago to $270, the majority of analysts still have a buy rating on the stock, with Brian from Deutsche summing up the sentiment:

💡 On the flip side, some analysts, like at Mizuho Securities, remain cautious that a push into other markets outside of crypto will “cannibalize on crypto sales” in the medium-term and could lead to more volatility.

🚗 And while the stock ended this week in the green, it’s still 63% down from it’s all-time-highs… and with crypto in the shape it’s in Coinbase investors likely still have a bumpy road ahead.

⚠️ But unlike Coinbase’s rally, other retail favourites continued to get absolutely crushed this week...

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RETAIL FAVOURITES FALL
📉 The Collapse of Hims, Reddit, and Pinterest

😰 I mentioned earlier that the S&P 500 is only down -0.33% this year, but for many investors, it may feel like the market is completely collapsing.

💡 Ronan made a great post about this on Blossom this week, saying, “the market isn’t down, you’re too risky.”

📉 Part of the reason why is that many of the popular retail stocks, which gave us eye-watering gains in the past few years, are facing sharp reversals in fortune, so let’s dive into 3 of them today, look at why they’re falling, and what this means for investors.

📊 I’m hoping this section can be a great reminder of the importance of diversification… as even when the market is basically flat, overexposure to a few names can lead to sharp swings in your portfolio!

💊 HIMS Down 47% This Month Amid Legal Woes

💊 First up is HIMS, the popular telehealth platform that connects consumers with licensed healthcare professionals for online prescriptions.

📈 From September 2024 to September 2025, HIMS went on a wild bull run, soaring over 300% as hype soared around the company, particularly its weight-loss drugs which competed with Ozempic and Wegovy. This led investors to price the company like a high-growth obesity-drug platform.

😬 But as often is the case, valuation got ahead of fundamentals, and as competition and regulatory uncertainty increased, the stock crashed as quickly as it soared, falling 70% from all-time-highs.

📉 This month the stock was hit especially hard, falling 48% after facing a lawsuit from Novo Nordisk (the creator of Ozempic) which seeks to ban Hims & Hers from selling compounded versions of its weight-loss drugs.

❌ The FDA has also taken action against the company, announcing Friday that it planned to take “decisive steps” to crack down on the sale of compounded GLP-1s, such as those sold by the company.

🤷‍️ This leaves the future of HIMS very uncertain and shows how quickly growth stocks can swing when the narrative changes.

💡 This isn’t to say HIMS is a good or bad investment, but is a good reminder to make sure you understand the risks you're taking on when investing heavily in a single stock.

😬 Reddit Falls 43% This Month Despite Surging Ad Revenue

⭐️Next up is Reddit ($RDDT), which soared over 140% from April 2025 to the end of the year as Reddit delivered strong growth quarter after quarter, including its most recent quarter in which revenue soared 70% to $726M (vs $665M expected).

🤖 This month, Reddit also saw a sharp reversal as investors worry about AI search cannibalizing time on Reddit, and slowing advertiser growth in 2026.

🤔 Ironically, AI was part of the reason for Reddit’s soaring stock price, with the stock jumping after licensing deals with OpenAI and Gemini, leading to articles claiming “Reddit Is Winning the AI Game.”

⏰ But as users spend more time on AI, they’re spending less time on Reddit, and the threats to Reddit’s ad revenue are proving greater than the opportunity from data licensing.

💡 But amid the massive drop, there are many who believe the fears are overblown and who argue that Reddit is now undervalued (including the controversial Jim Cramer) and is just falling victim to the ‘AI jitters’ which have plauged the market this year.

Reddit’s CEO emphasized their strong position in recent earnings, saying:

🔍 It’s worth noting as well that Reddit is betting on becoming an AI search destination itself, but that hasn’t been proven yet. Its main AI tool is Reddit Answers, which grew from 1 million to 15 million weekly users in just 9 months, but is not yet being monetized.

😬 Pinterest Falls 45% This Month Amid AI Threats

🤖 Last but not least, Pinterest ($PINS). Similar to Reddit, investors are also worried about AI’s threat to the social media company. These threats are coming from a few angles:

• Pinterest's value prop is centered around human-curated discovery, and users have been reporting increased frustration with ‘AI-slop’ causing users to abandon the platform

• Competitors are developing AI that connects directly to products, removing the need for an intermediary ‘discovery’ app.

• Experts fear that platforms with deeper pockets, such as Amazon, Meta, and OpenAI, will offer "superior" AI-powered clones of Pinterest's core functionality.

😰 But unlike Reddit which is seeing soaring ad revenue amid AI threats, Pinterests ad revenue is falling, with net income for the most recent quarter plunging 85% to $277 million from $1.85 billion the prior year.

💰 Pinterest blames this in part on tariffs, as it is more exposed to ad spend from retailers (which are the most exposed to tariffs) and is going ‘all-in’ on an AI-first pivot to combat AI threats.

🎢 So what is the takeaway from all these rollercoaster stories?

📊 Well, even with the S&P 500 roughly flat this year, investors concentrated in high-momentum retail favorites like HIMS, Reddit, or Pinterest are experiencing bear-market-level losses.

📉 Many of these stocks were soaring on strong narratives instead of fundamentals. But once the narrative shifted, the stocks saw a sharp reversal.

💡 The same characteristics that drive the 100%+ gains, momentum, investor enthusiasm, and future expectations also make these names extremely sensitive to sentiment changes.

📊 So if you haven’t already, make sure to check your portfolio for concentration risk, and if you’re chasing these 100%+ gains, make sure you know the game you're playing…

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