MARKET RECAP
🥳 Market Has Its Best Week of the Year After US-Iran Ceasefire Sends Stocks Flying

🕊️ After a month of war-driven volatility, markets caught a massive break this week thanks to new developments in the US-Iran conflict (this time positive).

🤝 On Wednesday, a two-week ceasefire was announced between the U.S. and Iran, brokered by Pakistan, sending markets flying high. The S&P 500 surged +2.5% in a single trading session, the Nasdaq jumped +2.8%, and Brent Crude plunging over 13% in a single day leading to its largest decline since 2020, and ending the week below $100/barrel for the first time in weeks.

🛢️ Oil and Gas stocks like ExxonMobil ($XOM) and Chevron ($CVX) got crushed on the news, falling 5% each, while basically every other sector surged.

📈 The S&P 500 ended the week up +3.56%, marking its best week of the year to-date, now almost fully recovering from its lows near the beginning of the war. Other major indexes followed the lead:

• The Nasdaq 100 rose +4.45%

• The TSX rose +1.77%

🥶 A Deal Sitting On Thin Ice

🍾 Now, before we pop the champagne, a few things are worth flagging:

🚢 First, the Strait of Hormuz is still not fully open, and there are still concerns over the free flow of oil going forward. Only a handful of ships have crossed through the Strait since the ceasefire was announced, and Iran has reportedly been charging up to $1 million per ship for any vessel that does cross.

😬 There are also worries around the ceasefire itself, with the biggest point of contention being around Lebanon, where Israel fired massive strikes right after the ceasefire. (According to Iran, the recent ceasefire covers Lebanon, but Israel doesn’t agree.)

🇺🇸 The US Navy also began sending destroyers into the Strait for the first time since the war began, with Trump saying American forces have started “clearing” it, which Iran says violates the ceasefire, threatening to attack the ships.

🤝 As a saving grace, late in the week, JD Vance and a U.S. envoy arrived in Pakistan for peace talks with Iranian officials, but after 21 hours, neither side could reach an agreement, with Vance saying afterwards in a press conference:

☮️ So while markets are pricing in sustained peace, this recent break in the war may still only be a pause, and a real peace deal is looking hard to come by.

🤞 So unfortunately it looks like, yet again, we’ll have to hold our breath and wait and see what new headlines the week ahead brings…

🗞️ But apart from the ceasefire, the biggest market stories this week actually came from the AI world. Specifically with Anthropic and Palantir. So let’s dive in…

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TOP STORY
📉 Palantir Plunges 14% After “Big Short” Michael Burry Tweet

🎯 Michael Burry, the “Big Short” hedge fund manager who famously bet against the housing market before the 2008 crash, has openly been short Palantir ($PLTR) since Fall 2025, and this week, he was directly responsible for a big drop in Palantir’s stock price.

💣 On Wednesday, Burry posted a simple tweet on X saying that Anthropic is “eating Palantir’s lunch,” leading to an 8% drop in Palantir’s stock price in a single day, and $23 billion wiped off in market cap.

🇺🇸 President Trump defended Palantir on Truth Social after the feud broke out, praising the company for its “great warfighting capabilities,” which briefly led to a rise in the stock price.

🥊 But Burry doubled down right after:

💡 And for those unfamiliar with options trading, the short version is he's betting Palantir's stock will keep falling, and he just extended that bet out to 2027.

📉 By the end of the week, Palantir was down 14%, with the company officially down 24% year-to-date so far in 2026. So is Burry actually onto something, or is this just one hedge fund manager talking his book?

🐻 The Bear Case

🤖 At the heart of Burry's argument is that Anthropic is simply doing what Palantir does, but cheaper, faster, and without the army of consultants. Anthropic grew from ~$9 billion to ~$30 billion in annual recurring revenue in a matter of months, and is now capturing over 73% of spending among companies buying AI tools for the first time.

👷 Palantir's business model, by contrast, is built on expensive "Forward Deployed Engineers", software engineers who embed directly with a single client, building and configuring solutions on-site for months at a time. Even in Palantir's own annual filings, these engineers are classified as "professional services."

🧑‍💻 According to Burry, a big chunk of what Palantir charges for isn't software, it's people, and Anthropic is disrupting that.

⏳ It took Palantir 20 years to reach $5 billion in annual revenue. Anthropic is getting there on pure software margins. Burry’s bet is that Anthropic will build AI that can do what Palantir’s human-heavy model already does, but cheaper and faster, and at a fraction of the cost to scale.

🐂 The Bull Case

🛡️ But of course, not everyone agrees with Burry.

📈 For starters, bulls point to Palantir's most recent earnings.

• U.S. commercial revenue grew 137% year-over-year in Q4 2025, with total revenue up 70%.

• The company is guiding for 61% growth in 2026, a number that, when it was announced, was described as "crushing consensus expectations."

• Last year, Palantir signed a contract with the U.S. Army worth up to $10 billion, consolidating 75 existing contracts into a single decade-long agreement.

🥪 For Palantir fans, those aren’t the signs of a company getting its lunch eaten.

💬 Dan Ives, Global Head of Tech Research at Wedbush called Burry’s take ”wrong and a fictional narrative,” arguing Palantir is a “core AI winner” and its Foundry platform is becoming a dominant enterprise platform.

📊 Analysts at Morgan Stanley agreed, and are “growing in optimism” about Palantir’s offerings, while one analyst at UBS was even more openly bullish, saying:

🤔 The bull argument for most analysts is that Palantir provides deeply integrated mission-critical government and enterprise work that requires domain expertise, security clearances, and years of political relationships. Which is something that AI can’t simply replace anytime soon.

❓ As always, only time will tell which argument is the winner. But Anthropic’s carnage didn't stop at Palantir this week… another sector went into a freefall after Anthropic’s annoucement if it’s new Mythos model: Cybersecurity.

ANTHROPIC HAVOC CONT.
🔒 Cybersecurity Stocks Plunge Following Anthropic’s “Claude Mythos” Preview

🤖 Palantir wasn’t the only stock feeling the heat from Anthropic this week… cybersecurity stocks were also hit hard with HACK, the Amplify Cybersecurity ETF, falling -8%.

🚀 On Tuesday, Anthropic unveiled Claude Mythos Preview, a new AI model that, by its own description, is “strikingly capable at computer security.”

🔍 Through a new initiative called Project Glasswing, Anthropic gave a select group of ~40 companies (including Microsoft, Google, Amazon, Apple, CrowdStrike, and Palo Alto Networks) access to Mythos Preview for ”defensive security work,” using it to autonomously scan their code for vulnerabilities without human touch.

💥 According to Anthropic, Mythos has already identified thousands of zero-day vulnerabilities (flaws unknown to the software developers) across every major operating system and web browser. In one case, it even found a vulnerability in OpenBSD (one of the most popular security-first operating systems) that had gone undetected for 27 years.

⚠️ Anthropic says it will not be making Mythos publicly available because the model is too capable at finding and exploiting security flaws to release to the general public. So for now, it is only available as a controlled, partners-only Claude offering.

📉 “The Cyber-pocalypse”

😬 Now, we’ve heard a lot about the “SaaS-pocalypse,” or the idea that AI could wipe out traditional software businesses (something we covered here).

📉 But now with Mythos, it looks like we might have a ”Cyber-pocalypse” on our hands as well, with Cybersecurity stocks crashing hard this week on the news. To name a few:

• CrowdStrike ($CRWD) fell -5%

• Cloudflare ($NET) fell -21.1%

• Qualys ($QLYS) fell -13.4%

😬 The news was serious enough that Federal Reserve Chair Jerome Powell and Treasury Secretary Bessent reportedly discussed Mythos directly with a major U.S. bank CEO, adding to the fears.

🛡️ The Counter-Argument

🤔 But not everyone is convinced the selloff makes sense.

🔒 The core argument for the cybersecurity stock advocates is that more AI in the world means a dramatically larger attack surface. Every AI agent running inside a company is a new potential entry point for attackers. Every piece of AI-generated code still needs to be secured.

✨ If Mythos can find vulnerabilities autonomously, so can the hackers, meaning the demand for companies like CrowdStrike and Palo Alto may actually go up, not down.

🤝 There's also an irony worth noting: CrowdStrike and Palo Alto Networks are both Project Glasswing partners. They're not just victims of Mythos, they have access to it. The same tool the market is using to justify selling them off is already in their hands.

💡 As Anthropic itself acknowledged:

❓ Whether traditional cybersecurity companies can adapt fast enough, or whether Mythos makes them obsolete, is the question the market is still trying to figure out, and like Palantir, remains another open question for investors.

IN OTHER NEWS
🗞️ Other Top Headlines, Presented by Beevis

🤖 To make sure I’m keeping you guys fully updated, I had Beevis (Blossom’s AI Investing Assistant) pull a few of the other top headlines this week that I wasn’t able to cover!

🏥 Healthcare insurers surged on Medicare rate news

• On Monday, managed care stocks exploded higher as a defensive play. UNH was up 9.37%, Humana up 7.94%, and CVS up 6.74%, all in a single session. The catalyst was a Medicare Advantage rate hike announcement from CMS, which gave the sector a significant earnings boost just as investors were rotating into defensives during the Iran uncertainty.

💾 Memory stocks absolutely ripped on Wednesday

• The ceasefire bounce had a clear favourite: memory chips. Micron surged more than 9.5% on the day, while Sandisk and Seagate both popped more than 8%, and Western Digital jumped more than 7%. These stocks had been crushed by supply chain uncertainty tied to the Iran conflict, so the ceasefire unlocked a massive release valve 🔓

🤖 META drops $21B more on AI infrastructure

• META committed another $21 billion in AI cloud infrastructure through CoreWeave, on top of a prior $14.2 billion deal, making Meta CoreWeave's single largest customer. The new deal also uses Nvidia's brand new Vera Rubin GPU system, which analysts flagged as a signal that Meta is operating at the absolute frontier of AI compute.

💡 Goldman Sachs says tech is a "best opportunity" buy right now

• Goldman noted this week that the IT sector's P/E is now below consumer discretionary, staples, AND industrials globally, which almost never happens. They said this isn't a 2000-style bubble situation, and that valuations have room to re-rate higher if the ceasefire holds. Basically: the war created a rare entry point in tech according to Goldman.

🗞️ I’ve been finding Beevis’ daily market summaries super helpful to keep up with the news relevant to my portfolio (since it’s personalized to your actual holdings). If you haven’t had a chance to check it out, try it out here!

^{(note the link says ‘coming soon to mobile’ but it’s already live if you visit the ‘portfolio tab’ in the app)}

FROM THE BLOSSOM COMMUNITY
⭐️ Top Discussions of the Week

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