SOTS 2nd Hour: Big Tech’s Capex Plans, Amazon Stock Plunges, Musk’s Net Worth Passes $850B 2/6/26

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Carl Quintanilla (0:23)

Investing involves risk, including risk of loss. Fidelity Brokerage Services LLC, member NYSE SIPC.

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Accept Discover?

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In a little place like this?

SPEAKER_6 (0:39)

I don't think so, Jennifer.

Phil LeBeau (0:40)

Oh, yeah, huh?

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Discover's accepted where I like to shop.

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Right, so we shouldn't get the parachute pants?

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These are making a comeback.

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I think.

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Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen Report.

Sara Eisen (1:06)

Good Friday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Coming up this hour, a sell-off at Amazon, adding to a brutal week for tech. As the company forecasts $200 billion in spending this year, we're gonna look at the carnage in the space, and whether or not Amazon's drop is a buying opportunity. Plus, more cracks in the electric vehicle story as Jeep parent Stellantis tanks on a business reset. Details on that story. And we'll talk to DraftKings CEO Jason Robbins about the big money being wagered on this weekend's Super Bowl.

Carl Quintanilla (1:42)

First though, consumer sentiment is just crossing the table. Let's get to Rick Santelli. Hey Rick.

Rick Santelli (1:47)

Yes, good morning Carl. These are our February preliminary reads in a couple of weeks. They will get marked a little bit more clearly, more accurately. 57.3 is our headline Michigan number, well above 55 expectations.

Sequentially higher than 56.4, the highest read since August of last year. Curve conditions, similar. A giant pop, 58.3, sequentially following 55.4, best since October of last year. Expectations, better than we were expecting of 56.6, but sequentially lower, at least up to this point, if there's no revisions from 57 last month. However, it's still a very solid read, best since July of last year. Now, let's get to the inflation reads. A big drop of one-year inflation, which in many people's opinions was running a little hot on Michigan. 4% last look, 3.5 on this look. That would be the lightest since January of last year. And finally, the five- to ten-year inflation outlook. Expected 3.3, last look at 3.3. Comes in one-tenth hotter at 3.4. 3.4 would equal where we were in November to find a higher read. You're in October at 3.9. So definitely these have moderated from where they were several months ago. Interest rates, well, we did touch a brief 4.15%, but now we hover at 4.21, which would be up three on the day, down three on the week. Sara, back to you.

Sara Eisen (3:24)

Okay, thank Rick. I like this little tidbit in the release. Sentiment surged for consumers with the largest stock portfolios, while it stagnated and remained at dismal levels for consumers without stock holdings, which I think tells part of the story of consumers right now. Rick Santelli on the better consumer sentiment data and also lower inflation expectations, really important. But guys, the biggest story of the week, both in the markets and I think in the economy too, because this is going to have a big impact, it's just how much big tech, Magnificent 7, is spending on the AI build out, those CapEx numbers, which are now much more heavily scrutinized by Wall Street. They are just ginormous and I know we talk about it, but the $660 billion.

David Faber (4:06)

Did you say ginormous?

Sara Eisen (4:07)

Ginormous. Yeah, I'm bringing it back. Are you my English professor?

David Faber (4:13)

Well, occasionally I like to police the language.

Sara Eisen (4:16)

Okay, they are. Okay, you know how ginormous they are?

David Faber (4:19)

Tell me.

Sara Eisen (4:19)

$660 billion is about the economy of Sweden.

It's like a little less than in Argentina. I mean, that's just what they're spending this year. They're increasing. So that's going to impact the economic data. Remember last year, we saw AI investment probably add 1% of growth to GDP in the first half of the year. So look, it's not as big of a consumer spending as far as the overall economy, but it is getting to be a bigger part of the overall economy. Now, what's interesting obviously this week is that with all of that extra spending, I think last year the market would have been euphoric about it, and this year not so much. We saw $1.35 trillion in loss of market cap in some of these big names, Microsoft, Nvidia, Oracle, Meta, Amazon, Alphabet. So I know we've been talking about this, but question is what the market needs to see to see those spending numbers pay off. But no doubt, economists are trying to figure out what it's going to mean for growth, what it's going to mean for employment. Ultimately, it does take construction workers to build these data centers and to build out the AI story and just how much it's going to change.