Wall Street's Plan B

As you just read, Meta’s latest attempt to bankroll its AI ambitions isn’t exactly getting a like from investors. And the markets have shown that the tech giant has plenty of company.

Since CoreWeave’s debt troubles rattled Wall Street, investors have been questioning anew whether AI’s massive price tag will ever pay off. Semiconductor stocks plunged 11.4% last week, their worst weekly performance since April 2025.

But here’s a counterweight: At the same time, consumer staples gained 5%, energy climbed nearly 5%, and healthcare rose 3.5% to reach a record high. Rather than dwelling on AI boom and doom, turn to today’s earnings to understand where Wall Street is feeling optimistic.

Consumer staples

Investors are rediscovering the appeal of everyday necessities, which people keep buying even when the economy slows.

Take Procter & Gamble, the company behind brands like Tide and Pampers. Shares jumped 5.58% today—their biggest one-day gain since March 2020—after the company reported a 4% increase in quarterly sales and beat profit expectations. It also raised its full-year sales growth forecast, reflecting its acquisition of wellness brand Thorne.

But predictable demand doesn’t guarantee predictable profits: Cost-conscious consumers are limiting P&G’s pricing power, while rising commodity, energy, and transportation costs are expected to shave $1.4 billion off the company’s fiscal 2027 profits.

Defense

While AI companies are spending billions hoping to secure future demand, defense contractors already have customers lining up.

Amid escalating geopolitical tensions, Lockheed Martin reported an 11% increase in quarterly revenue today and raised its annual outlook. Its backlog surged 27% from the previous quarter to a record $292 billion, sending shares up 6.87%.

Still, political uncertainty and concerns about military budgets have weighed on defense stocks. Citi sees opportunity in the pullback, highlighting RTX and Huntington Ingalls as potential beneficiaries of a rebound.

AI adapters

Then there are the adapters: Companies that use AI to improve existing products can benefit without shouldering the tech’s massive infrastructure costs.

Spotify, for example, rallied 11.22% after forecasting a stronger-than-expected fourth-quarter operating profit of $921 million. The streaming giant is using AI to improve music discovery and personalization, potentially boosting subscriber retention. It also added 6 million paying subscribers last quarter, bringing its total to 306 million.

“People love getting rid of chores. But entertainment is the opposite. Nobody asks an agent to ‘summarize a song’ for them,” co-CEO Gustav Söderström told investors.

Zoom out

Diapers, drones, Drake: Wall Street is finding plenty of reasons to look beyond artificial intelligence for opportunities. Here’s hoping the momentum continues—and that by some stroke of luck, we’ll make it through a future earnings season without CEOs explaining how $50 billion in debt is great news.—SY