February 14, 2026: AI Fear Rolls Through Sectors

Last week Dow Jones fell 1.2%, S&P 500 lost 1.4%, Nasdaq composite was down 2.1%. Sector rotation and AI disruption fears hit stocks, rolling across sectors. Software stocks continue to endure their worst rout since 2002. Shopify epitomized the volatility, falling 11% despite reporting 31% revenue growth and a US$2 bullion buyback program. Investors remain skeptical of legacy SaaS revenue growth and margins as AI giants like OpenAI and Anthropic threaten to disrupt traditional enterprise workflows. The “SaaSpocalypse” could stall expected 2026 IPO momentum, with firms like Visma and Liftoff Mobile delaying listings. Private equity giant Thoma Bravo is viewing the panic as a “bargain” opportunity, arguing that “AI is software” and public markets are failing to discern winners from losers. The AI and private co funding supercycle continues unabated. Anthropic raised US$30 billion at a US$380 billion valuation, fueled by a US$14 billion revenue run rate. Databricks raised US$7 billion in fresh capital. Stripe is eyeing a US$140 billion valuation in a new tender offer, marking a significant valuation rebound. Alphabet is tapping the bond market for US$20 billion to fund exploding Capex. Supply chains remain a bottleneck as memory chip prices soar; SK Hynix shares have surged 150% since September. To protect the AI boom, the Trump administration is reportedly planning tariff “carve-outs” for hyperscalers like Amazon and Google, tying exemptions to TSMC’s US$165 billion investment in U.S. domestic manufacturing. In Canada, Cohere hit a US$240 million ARR milestone, setting the stage for a potential 2026 IPO alongside SpaceX and OpenAI. Apple continued its quiet acquisition spree in Kitchener-Waterloo, snapping up database startup Kuzu. In the MicroCap space, Sophic client Cybeats is capitalizing on global SBOM mandates, with CEO Justin Leger highlighting the transition of cybersecurity from a regulatory hurdle to a foundational enterprise layer.

Sophic Client Cybeats Technologies Corp. (CYBT-CSE,CYBCF-OTCQB) MicroCapClub Business Breakdown.

Over the past year, Software Bills of Materials (SBOMs) have evolved from a regulatory requirement into a foundational layer of enterprise cybersecurity. Driven by mandates from U.S. federal agencies, the FDA, and the EU Cyber Resilience Act, organizations are no longer just generating SBOMs, they’re expected to manage them continuously. At the same time, enterprise procurement teams are embedding SBOM requirements directly into buying decisions, particularly across healthcare, industrial, energy, and critical infrastructure sectors. Combined with the growing volume of disclosed vulnerabilities, this is accelerating demand for solutions that provide real-time visibility, automated monitoring, and operational use of SBOM data. In a recent conversation, Justin Leger, CEO of Cybeats Technologies, emphasized the critical role of SBOM management in enhancing cybersecurity, while outlining the evolving regulatory landscape that is driving widespread adoption of SBOMs. He also detailed the Company’s SaaS business model, strong customer retention, competitive positioning, lengthy but strategic sales cycles, streamlined implementation processes, expert team, and significant growth potential amid challenges in the dynamic cybersecurity market. https://tinyurl.com/3uzy49mu

Shopify (SHOP-NASDAQ, SHOP-TSX) shares tumble amid software selloff.

Shopify shares were down around 11% by midday Wednesday, reversing a nearly 12% premarket jump that had followed the release of the e-commerce software maker’s latest financial results. That volatile trading likely reflects general investor fears about AI’s impact on software companies that have been triggering sharp selloffs in companies across the sector. The drop comes even as Shopify has moved quickly to work with AI companies like OpenAI and Google to help them develop shopping features for their AI apps. That could give it a piece of the market if AI-powered shopping takes off, but will likely weigh on margins in the near term due to the cost of the new AI tools. Shopify’s revenue rose 31% to US$3.7 billion in the fourth quarter of 2025, helped in part by Shopify adding more large merchants and growth in its payments business. Shopify said Wednesday it expects to continue that momentum, projecting a revenue growth rate in the low thirties for the current quarter. The company also announced a US$2 billion share buyback program, which it plans to launch later this month. https://tinyurl.com/yzfd29mh

Cohere’s US$240 million year sets stage for IPO.

As the top AI labs like Google, Anthropic, and OpenAI chase enterprise adoption, Canadian AI startup Cohere has been quietly cleaning up. The startup told investors in a memo that it surpassed its US$200 million annual recurring revenue target in 2025, hitting US$240 million with quarter-over-quarter growth of more than 50% throughout the year, per CNBC. Cohere was founded in 2019 and has the backing of enterprise tech investors like Nvidia, AMD, and Salesforce. The startup’s core tech is its Command family of generative AI models, which Cohere says are efficient enough to be deployed on limited GPUs — an attractive promise for enterprises looking to get a handle on cost and resource management. Cohere’s CEO Aidan Gomez said last October that the startup may IPO “soon.” If “soon” means in 2026, Cohere may be contending against OpenAI, Anthropic, and SpaceX/xAI, which are all reportedly weighing their own public debuts. https://tinyurl.com/3xsc7sr7

Apple strikes deal to acquire Canadian database software startup Kuzu.

Kitchener-Waterloo-based database software startup Kuzu has quietly signed a deal to be acquired by American technology giant Apple. Apple confirmed the deal in a disclosure to the European Union (EU) that was first reported by AppleInsider. That filing indicates that on Oct. 9, 2025, Apple struck an agreement to buy all shares and hire select employees of Kuzu, which develops “lightweight embedded database technology,” through an unnamed subsidiary, but does not share any further details. This appears to mark Apple’s second acquisition of a Kitchener-Waterloo startup since 2024, when it purchased DarwinAI, which had developed a platform that applies AI to visual quality inspection for manufacturers. https://tinyurl.com/munmck3u

Modem closes US$4.4 million pre-seed round to help developers ship faster.

Before AI, software developers already had to contend with a flood of information. As large-language models (LLMs) have sped up the pace of development, keeping all the context in one place and arranging it in order of importance remains a persistent challenge. Ben Vinegar, founder of Toronto-based Modem, knows this firsthand. As a former VP of engineering at Silicon Valley unicorn Sentry, he has a unique insight into the bottlenecks faced by developer teams. His new startup, which was founded last May, has attracted the attention of former colleagues and other veteran tech angels. Modem closed a US$4.4 million ($6 million) equity pre-seed round led by Silicon Valley firm Accel, with participation from Montréal’s Inovia Capital and several angel investors, including Cohere co-founder Ivan Zhang and Sentry co-founders David Cramer and Chris Jennings. https://tinyurl.com/mr4czfrm

Software selloff is disrupting some M&A and IPO deals, US bankers say.

A broad selloff in software stocks is starting to stall deal-making and IPOs in the sector as volatility makes valuations unreliable and potential buyers cautious, about a dozen financial advisers and dealmakers told Reuters. The months‑long rout deepened last week, with the S&P 500 software and services index posting its worst three‑month performance since May 2002, Evercore ISI equity strategists said. While the sector has clawed back some losses, it is still down about 25% from its October 28 record while the S&P 500 is up 1%. Bankers and investors interviewed link the slowdown in mergers and acquisitions and initial public offerings to a few related reasons. With software shares dropping sharply, the valuation benchmarks from peer companies, such as revenue multiples, are moving too quickly for either side to anchor a price, and buyers fear overpaying for assets that could be marked down again. The chill is particularly acute for IPOs. Blackstone-backed Liftoff Mobile decided to postpone its planned listing “given current market conditions,” it told Reuters in an email. Norwegian software firm Visma may delay a potential US$20 billion listing in London due to the selloff, two people familiar with the matter said. https://tinyurl.com/32n36fbf

Thoma Bravo seeks software bargains in ongoing SaaSpocalypse.

Public markets are not being discerning enough in the ongoing software selloff, according to one of Thoma Bravo’s top dealmakers, and the private equity firm is ready to take advantage of the panic. “To think that all software is the same, they’re missing the mark a bit,” managing partner Holden Spaht said in an interview on the new Bloomberg Deals television show, which aired Wednesday. “We think this could be a really exceptional buying opportunity.” Wall Street has been dumping software-as-a-service providers in recent weeks amid fears that the products they offer will become redundant in the age of artificial intelligence. The selloff — dubbed by some as the SaaSpocalypse — has been exacerbated by new AI tools coming out of startups such as Anthropic PBC. In his interview, Spaht said it was wrong to try and draw a clear line between SaaS companies and the new wave of AI applications coming to market. “AI is software, software is AI if you do it right,” he said. “All of our software companies are using AI, they’re selling AI, they’re developing AI.” https://tinyurl.com/3y2m232e

US IPO proceeds to quadruple to record US$160 billion in 2026 as dealmaking rebounds, says Goldman.

U.S. equity markets are set for a sharp rebound in IPOs in 2026, Goldman Sachs analysts said, forecasting proceeds quadrupling to a record US$160 billion as marquee names such as SpaceX, OpenAI and Anthropic edge closer to public listings. The Wall Street brokerage also expects the number of IPOs to double to 120 this year, as improving economic growth, stronger equity prices and easier financial conditions revive dealmaking appetite. The forecast marks the biggest year on record in absolute proceeds, the analysts said in a note issued on Friday, adding that IPO value would still only represent a small slice of overall U.S. market capitalization, reflecting the equity market’s growth over the past decade. Software and healthcare firms are set to dominate the IPO pipeline by volume while a handful of late-stage tech and artificial intelligence companies are expected to drive proceeds, according to the note. At the center of investor attention are a handful of ultra-valuable private companies, including Elon Musk’s SpaceX, artificial intelligence firm Anthropic and ChatGPT maker OpenAI, with their potential public debuts likely defining the scale and tone of the next IPO cycle. Listings by large private companies will shape the 2026 IPO market, analysts said, with proceeds ranging from roughly US$80 billion to almost US$200 billion, compared with a US$160 billion base case. https://tinyurl.com/3pr3bsdk

Alphabet reportedly set for US$20 billion US bond sale.

Alphabet is set to raise US$20 billion in the U.S. bond market, as part of a massive debt sale that will also see the company selling bonds in British pounds and Swiss francs, Bloomberg reported. The bond offering comes days after the Google parent company announced that it expected to double its capital expenditure spending to around US$185 billion this year. The tech industry has increasingly turned to debt financing to fund exploding spending on data centers and chips. Capital expenditures are slated to take up all of the projected free cash flow at Amazon, and most of it at Alphabet and Meta, according to the companies’ earnings and analyst projections. Alphabet increased the dollar bond sale to $20 billion after initially offering $15 billion, as debt investors showed intense interest, according to Bloomberg. Alphabet is also offering a rare 100-year bond in the UK. As of the end of last year, Alphabet had $126.8 billion in cash and cash equivalents, according to its most recent earnings filing. https://tinyurl.com/5jkhj2by

Anduril discusses new funding at US$60 billion-plus valuation.

Defense tech startup Anduril is in talks to raise billions in new funding at a valuation of at least US$60 billion including the new investment, according to a person with knowledge of the plans. The valuation would be roughly double the figure from its last private funding round in June. The funding would give the company more leeway to fund its first major weapons manufacturing facility and the development of an autonomous fighter jet. It expected to double its revenue last year, to roughly US$2 billion, from contracts with the Department of Defense and U.S. allies, but it is also burning cash. The eight-year-old startup, founded by former Palantir employees as well as virtual reality entrepreneur Palmer Luckey, has already raised billions of dollars over the years to develop or buy more modern software, drones and submarines that can win over government buyers. The company could further benefit from a shift in tone from the Trump administration toward more tech-leaning defense contractors, while it urges Anduril’s older, bigger rivals to curb stock buybacks and deliver weapons more quickly. Some of Anduril’s major backers have also been some of the Trump administration’s largest supporters in tech. Those include Peter Thiel’s Founders Fund, which has poured US$2 billion into the company over the years, as well as Andreessen Horowitz and Joe Lonsdale’s 8VC. The startup told investors last year it expected to burn between US$800 million and US$900 million last year. https://tinyurl.com/ycka8r9j

Anthropic says it raised US$30 billion.

Anthropic said Thursday it had raised US$30 billion in funding led by Singapore wealth fund GIC and Coatue Management, giving it a new valuation of US$380 billion valuation, including the funding. Other large investors writing checks into the round included Dragoneer Investment Group, Founders Fund, Iconiq and MGX. The company said it will use the new money for research, product development and infrastructure. Anthropic touted the growth of Claude Code, the company’s AI-powered coding tool launched last year. It has reached a revenue run rate of US$2.5 billion. The company’s overall revenue run rate is US$14 billion. The news comes as competitor OpenAI seeks to raise US$100 billion in fresh financing. https://tinyurl.com/4ucrthz5

Databricks raises US$7 billion in new funds.

Databricks said it had raised US$7 billion of fresh capital after hitting a US$5.4 billion annual revenue pace in the fourth quarter. The fundraising effort, which started in November and was split between US$5 billion of equity and US$2 billion of debt capacity, shows the company has been able to continue to tap the private markets ahead of a widely anticipated initial public offering. Its fourth-quarter revenue growth rate, more than 65%, would be among the fastest growing software firms if it were public. https://tinyurl.com/3d2ub5re

Stripe aims for US$140 billion valuation in new tender.

Stripe is preparing a potential tender offer that could value the payments company at more than US$140 billion, Axios reported. That would put the company’s valuation well above the US$107 billion mark at which it bought back shares from investors last fall. It marks a significant rebound from the US$50 billion valuation investors gave Stripe when it raised money in 2023. https://tinyurl.com/4ahs6447

MrBeast’s company buys Gen Z-focused fintech app Step.

YouTube megastar MrBeast announced on Monday that his company, Beast Industries, is buying Step, a teen-focused banking app. Step, which raised half a billion in funding and has grown to over 7 million users, offers financial services geared toward Gen Z to help them build credit, save money, and invest. The company has attracted celebrity investors like Charli D’Amelio, Will Smith, The Chainsmokers, and Stephen Curry, in addition to venture firms like General Catalyst, Coatue, and the payments company Stripe. https://tinyurl.com/dyuzu4df

Spotify’s revenue rises 7%, as ads fall again.

Spotify’s revenue grew 7% in the fourth quarter of 2025, the music streaming and podcast service reported, in line with the third quarter. A 4% drop in ad revenue partly offset 8% higher subscription revenue. But the company reported an improvement in its gross margin, which translated to an increase in its operating profit margin of several percentage points. Spotify’s operating profit rose 47% to 701 million euros. Spotify also reported 10% growth in the number of paying subscribers. Spotify stock was trading up 15% on Tuesday morning. Spotify’s ad business has suffered declining revenues for the past few quarters, despite promises from the company last spring that it was poised for growth. On a conference call with analysts on Tuesday, Spotify executives said the business should pick up in the second half of this year. https://tinyurl.com/5haras3y

Meta’s Auditor raised red flag on its data center accounting.

Meta Platforms’ auditor issued a cautionary note in the tech giant’s latest annual report, flagging the company’s accounting treatment of its US$27 billion data center project as a “critical audit matter.” Ernst & Young did not indicate it disagreed with Meta’s approach, but the designation signals that it was one of the most complex aspects of its audit. The project, known as Hyperion, was structured as a joint venture with Blue Owl Capital. Meta accounted for this as a so-called “variable interest entity.” Under accounting rules, a company must consolidate such an entity if it is deemed the “primary beneficiary,” meaning it has the power to direct the activities that most significantly affect the venture’s economic performance. Meta concluded it is not the primary beneficiary, allowing it to keep the project’s assets and debt off its balance sheet. EY said auditing that conclusion was “especially challenging due to the significant judgment required” to determine Meta was not the primary beneficiary. The EY comment was first reported on by The Wall Street Journal. https://tinyurl.com/2p9z4x2e

Ackman reports stakes in Amazon and Meta.

Hedge fund manager Bill Ackman’s Pershing Square Capital Management last year bought stakes in Meta Platforms and Amazon, adding to a portfolio already heavy with big tech stocks Alphabet and Uber. Ackman jumped into both stocks as they were underperforming. Amazon rose 5.2% last year, while Meta rose 12.8%, compared with the Nasdaq’s 20% rise. (Meta is up slightly so far in 2026 while Amazon is down 11%). In a presentation to investors posted on its website on Wednesday, Pershing Square described Meta as a “leader in the fast-growing digital advertising space and one of the clearest beneficiaries of AI integration” while Amazon was the “largest cloud business by market share…and the dominant retail e-commerce operator.” All its big tech investments “offer structurally higher growth than most companies in the S&P 500,” the presentation said. The hedge fund has about US$30 billion under management, a third of which is in one company, Howard Hughes Holdings. https://tinyurl.com/4rdnbhnz

Apple’s stock has worst day since April as iPhone maker faces FTC scrutiny, reports of Siri delay.

The stock dropped 5% on Thursday, wiping out its gain for the year and leaving it down almost 4% in 2026. The long-awaited artificial intelligence update to the iPhone maker’s Siri personal assistant has been internally pushed back to May and potentially later, Bloomberg reported Wednesday. The update was expected to launch within a couple weeks, but the company may roll the features out slowly over several months, the report stated. Apple told CNBC it is still on track to launch in 2026. https://tinyurl.com/znjncejm

US plans Big Tech carve-out from next wave of chip tariffs.

Donald Trump’s administration intends to spare companies including Amazon, Google and Microsoft from forthcoming tariffs on chips as they race to build the data centres powering the AI boom. The commerce department is planning to provide US hyperscalers with tariff carve-outs, which would be tied to investment commitments made by Taiwan-based chip group Taiwan Semiconductor Manufacturing Company (TSMC), people familiar with the matter said. The exemption scheme underscores President Trump’s determination to impose tariffs on chips and incentivise US domestic chipmaking, while offering some relief for the companies powering the US’s rapid AI expansion, which rely heavily on imported semiconductors. In January, the White House said it intended to impose “significant” duties on chip importers. The new scheme would allow TSMC to allocate exemptions for its US customers from this next set of tariffs. The carve-outs would be tied to the scale of the Taiwan-based group’s investments in the US. The complex plan is intended to push the world’s leading chipmaker to shift more production to the US. TSMC, which makes most of the advanced chips used for AI, has much of its manufacturing in Taiwan. But it has pledged to invest US$165 billion in building capacity in the US. The size of the potential rebate programme would be linked to the recent US-Taiwan trade agreement. The White House has agreed to slash tariffs on imports from the island to 15 per cent in exchange for a US$250 billion investment in the chip industry in the US. Under the deal, Taiwanese companies including TSMC that invest in the US will be exempt from the forthcoming tariffs in proportion to their planned US capacity. The White House said it would allow Taiwanese companies building semiconductor plants in the US to import 2.5 times the new facilities’ planned capacity tariff-free during the construction period, according to an outline of the trade deal released by the commerce department. Taiwanese companies that have already built plants in the US will be allowed to import 1.5 times their capacity. https://tinyurl.com/2e4wynwy

Memory chip squeeze widens gap between market winners and losers.

The relentless surge in memory chip prices over the past few months has driven a vast divide between winners and losers in the stock market, and investors don’t see any end in sight. Companies from game console maker Nintendo Co. to big PC brands and Apple Inc. suppliers are seeing shares slump on profitability concerns. Memory producers, meanwhile, are soaring to unprecedented heights. Money managers and analysts are now assessing which firms can best navigate the squeeze by locking in supplies, raising product prices or redesigning to use less memory. A Bloomberg gauge of global consumer electronics makers is down 10% since the end of September while a basket of memory makers including Samsung Electronics Co. has surged roughly 160%. The question now is how much is priced in. Memory chip shortages and pricing are being mentioned frequently by companies in earnings reports and conference calls. In one of the latest examples, Honda Motor Co. noted Tuesday that supply risks are emerging for memory components. Investors are hearing the alarm bells. Shares of Qualcomm Inc. fell more than 8% last Thursday after the smartphone processor maker signaled memory constraints will limit phone production. Nintendo slid the most in 18 months in Tokyo the day after it warned of margin pressure from the shortages. PC makers are among those hit the hardest. Both Lenovo Group Ltd. and Dell Technologies Inc. have dropped over 25% from their respective peaks in October. Worries that higher chip prices will dampen PC demand have also spread to Swiss peripherals maker Logitech International SA, which has declined nearly 30% from a November peak. As such, memory chip makers have been the standout winners among tech stocks. Shares of SK Hynix Inc., a key supplier of HBM to Nvidia Corp., are up more than 150% just since the end of September in Seoul. Among makers of more pedestrian chips, Japan’s Kioxia Holdings Corp. and Taiwan’s Nanya Technology Corp. are up over 270% each in that span, while Sandisk Corp. has climbed more than 400% in New York. https://tinyurl.com/3z76ycvz

OpenAI launches ChatGPT ads.

OpenAI said Monday it’s beginning to show ads in ChatGPT for some U.S. users. The ads, which OpenAI says are a test, will be shown to logged-in users with free subscriptions, as well as subscribers to OpenAI’s new Go tier, which costs US$8 per month. Free users can opt out of seeing ads in exchange for fewer daily messages, the company said. OpenAI said it decides what ad to show by matching ads submitted by advertisers to the topic of a conversation, in addition to previous chats and interactions with ads. For example, OpenAI said, if a user is searching for recipes, they might see ads for meal kits or grocery delivery services. Advertisers won’t be able to see chats or personal details about users, OpenAI said, and will only receive aggregate information about how their ads perform like number of total views or clicks. OpenAI is charging advertisers on a per-view basis. The company said Monday that it will “evolve” the ads business over time “to support additional formats, objectives and buying models and build new ways for businesses to interact with consumers in ChatGPT.” It also said it would add “guardrails to prevent narrow ads targeting,” but didn’t specify any rules or control measures. https://tinyurl.com/9j88dbcr

Spotify says its best developers haven’t written a line of code since December, thanks to AI.

Has AI coding reached a tipping point? That seems to be the case for Spotify at least, which shared this week during its fourth-quarter earnings call that the best developers at the company “have not written a single line of code since December.” That statement, from Spotify co-CEO Gustav Söderström, came alongside other comments about how the company is using AI to accelerate development. Of note, Spotify pointed out it shipped more than 50 new features and changes to its streaming app throughout 2025. And, most recently, it has rolled out more features, like AI-powered Prompted Playlists, Page Match for audiobooks, and About This Song, which all launched within the past few weeks. At Spotify, engineers are using an internal system called “Honk” to speed up coding and product velocity, the company told analysts on the call. This system allows for things like remote, real-time code deployment using generative AI, and specifically Claude Code. https://tinyurl.com/r8jx9af2

Essilor and Meta sell 7 million smart glasses in 2025.

EssilorLuxottica and Meta Platforms sold more than 7 million smart glasses in 2025, Essilor reported on Wednesday, a huge improvement on 2024. Essilor had reported a year ago that only 2 million smart glasses had been sold since the product was launched in 2023. EssilorLuxottica’s disclosure was the most detailed either of the companies has given about the glasses. Meta CEO Mark Zuckerberg said last month that sales of the glasses “more than tripled last year” without giving the actual figures. Zuckerberg has high hopes for the potential of the glasses, which include access to Meta’s AI assistant. Zuckerberg noted on the January earnings call that “billions of people wear glasses or contacts for vision correction [and]…it’s hard to imagine a world in several year where most glasses that people wear aren’t AI glasses.” https://tinyurl.com/2sp478sa

Defense Secretary Pete Hegseth visited Anduril and other defense manufacturing facilities as part of his “Arsenal of Freedom Tour.”

Anduril hosted the Secretary of Ware at their maritime manufacturing facility in Quonset Point, RI. At Quonset, we’re rapidly building Dive-LDs for the U.S. Navy and will begin scaled production of Copperhead and Dive-XL later this year. You can’t win with blueprints. https://tinyurl.com/5fkz7z7h

Target participates in OpenAI ads pilot.

Target said this week that it will be one of the first advertisers working with OpenAI as it launches ads in ChatGPT. Target also said that brands that advertise through its Roundel retail media business will be able to participate in the ads pilot. OpenAI launched ads for some U.S. ChatGPT users on Monday. To start, OpenAI is charging advertisers on a per-view basis, and will determine which ads are shown based on topics and keywords in users’ prompts. Generally, AI apps moving into showing ads have been seen as a potential threat to ad businesses like Target’s, though the early moves by OpenAI show they can still be involved as partners. In its most recent quarterly earnings report in November, Target said that its retail media business grew ad sales at a rate in the mid-teens, even as net sales declined. Roundel clients include General Mills, Clorox and Nestle, according to its website. https://tinyurl.com/2vxdrred