BUZZ Investing: Early-Year Strength Meets February Reset

U.S. equities navigated a volatile and increasingly risk-averse period from January 8 to February 11, 2026 (the “Period”), as early-year momentum gave way to aggressive selling pressure in early February. While markets entered the year on a constructive footing, building on January’s modest gains with the S&P 500 briefly surpassing 7,000 for the first time and small caps showing relative strength, broad indices faced renewed headwinds as investor scrutiny intensified around artificial intelligence investment cycles, capital expenditure burdens, and potential disruption to incumbent sectors. The S&P 500 declined notably in the first two weeks of February, reflecting sharp pullbacks in technology and software names amid fears that AI-driven shifts could erode margins and displace traditional models, while broader dispersion widened between perceived AI winners and losers. Against this backdrop, the BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) experienced amplified downside during the Period, falling 9.1%, consistent with its concentrated exposure to certain thematic market segments, including high-sentiment AI-linked equities undergoing rapid reassessment.

The sell-off in early February was driven by a confluence of factors that heightened caution after three years of strong equity performance. Concerns over escalating AI capital spending raised questions about near-term returns on invested capital and sustainability of profitability in related ecosystems. AI-related productivity gains shaped a narrative which fueled sharp declines in software, IT services, and adjacent sectors seen as vulnerable to disruption. At the same time, geopolitical tensions and evolving tariff discussions re-entered the narrative, prompting a rotation toward perceived defensive and commodity-linked areas of the market. Corporate earnings remained broadly constructive on an absolute basis, but investor reactions were increasingly asymmetric, with guidance scrutiny intensifying and valuation sensitivity rising. As the market digests these dynamics, dispersion may persist, rewarding companies that can validate growth narratives while pressuring those reliant on narrative momentum alone.

The BUZZ Index returned 1.75% during the month of January compared to a return of 1.45% for the S&P 500 Index during the same period. Year-to-date, the BUZZ Index leads the S&P 500 with returns of 1.75% and 1.45%, respectively, as of the end of January.

Micron and Intel Lead BUZZ Gains; Memory Tightness and AI Tailwinds Lift Semis

Micron Technology (NASDAQ: MU) and Intel Corporation (NASDAQ: INTC) were the leading contributors to BUZZ Index performance during the Period, advancing approximately 25 percent and 18 percent, respectively.

Micron benefited from persistent tightness in global memory markets and mounting evidence that AI-driven demand for high-performance chips would continue to outstrip available supply well into 2026 and beyond. The catalyst may have come from Samsung Electronics’ earnings update, where executives emphasized broad-based shortages across key memory categories and described 2026 as a potential “Golden Era” for the industry, with constrained supply growth and meaningful price increases expected early in the year. These comments reinforced the favorable pricing and margin environment for memory suppliers, and Micron’s established role as a major provider into data centers and AI infrastructure positioned it to potentially capture a significant share of this multi-year upcycle.

Intel posted solid net gains despite notable intra-period volatility following its fourth-quarter earnings release in late January. The company exceeded expectations on revenue and profitability but shares initially pulled back sharply on cautious near-term guidance and commentary around supply constraints and challenges in meeting surging AI-related demand. The stock recovered in the days that followed as investors shifted focus to the longer-term trajectory, including progress in regaining manufacturing leadership and expanding its footprint in the growing AI PC and high-performance computing markets. In our view, the overall advance reflected renewed confidence in Intel’s strategic turnaround and its potential to participate meaningfully in the broadening AI ecosystem, even as the company works through near-term execution hurdles.

Top BUZZ Index Contributors: January 8, 2026 – February 11, 2026

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

Hims & Hers and Opendoor Weigh on BUZZ Index as Structural Pressures Resurface

Hims & Hers Health Inc. (NYSE: HIMS) and Opendoor Technologies Inc. (NASDAQ: OPEN) were the leading detractors to BUZZ Index performance during the Period, declining approximately 50 percent and 26 percent, respectively.

Hims & Hers Health experienced one of the Period’s sharpest declines after the company halted sales of its compounded version of Novo Nordisk’s popular weight-loss drug Wegovy. The decision followed intense regulatory scrutiny from the FDA and a referral to the Department of Justice, as well as a lawsuit from Novo Nordisk alleging patent infringement, unsafe compounding practices, and deceptive marketing. These developments triggered a rapid loss of investor confidence in the sustainability of the company’s recent growth drivers, particularly as broader concerns around decelerating revenue and subscriber trends also resurfaced.

Opendoor Technologies posted a meaningful decline amid heightened risk aversion and spillover effects from the broader “AI scare trade” that pressured real estate-linked names. Investors grew increasingly concerned that advancing AI tools could disrupt traditional home-buying processes and fee-based models, weighing on sentiment across the sector even though Opendoor operates a technology-first iBuying platform. Recent price action appeared to reflect both profit-taking after a run of outsized gains and caution ahead of upcoming earnings that will be closely watched for signs of operational progress under new leadership.

Bottom BUZZ Index Contributors: January 8, 2026 – February 11, 2026

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

BUZZ Index February 2026 Rebalance Highlights

Resilient Conviction: Maximum Weight Stocks

The S&P 500’s modest year-to-date performance through the recent BUZZ rebalance has masked sharply higher dispersion and volatility beneath the surface. The “Magnificent 7” group of stocks has fallen roughly 4% so far in 2026, Bitcoin has retraced about 23%, and several former high-momentum names have suffered single-day drops exceeding 10%. Software stocks have endured one of their most severe stretches since 2008, driven by growing investor reassessment of how deeply artificial intelligence may disrupt traditional SaaS models and profitability paths, a phenomenon some market participants have dubbed “SaaSMageddon” to reflect the intensity of the drawdowns. Despite this pressure on recent leaders, the number of BUZZ Index constituents at the maximum 3% weight increased from 13 to 18 this month. Notably, Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN), all core Magnificent 7 members, have returned to the 3% maximum weight cap. AAPL was last capped at 3% in September 2025, MSFT in November 2024, and AMZN in November 2025. While mainstream commentary increasingly warns of a potential market top, sentiment data and BUZZ positioning indicate that conviction in select high-quality names may remain relatively durable.

Salesforce, Inc.

Salesforce, Inc. (NYSE: CRM) has been a defining name in enterprise software for more than two decades. From trading near $5 per share in the depths of the 2008–2009 financial crisis, the company transformed itself into the category leader in cloud-based customer relationship management as internet infrastructure matured and SaaS adoption accelerated. The stock’s journey has been marked by sharp cycles. After peaking near $300 in late 2021, CRM fell with the broader technology sector to around $130 per share. The emergence of generative AI sparked a renewed rally, fueled in part by Salesforce’s launch of Agentforce and other AI-native capabilities, which carried shares to approximately $360 by January 2025. Since then, the stock has given back roughly half its value, reflecting broader market concerns over the capital intensity of AI investment and questions about the pace at which increasingly sophisticated AI agents may encroach on traditional CRM workflows and value propositions. Despite the recent pullback, CRM re-enters the BUZZ Index this month at a 0.40% weight, indicating that some market participants retain confidence in the company’s ability to adapt its platform and remain competitive through significant technological shifts.

For more on rebalancing results and a full breakdown of index constituents added and removed for the month, view the BUZZ Index reconstitution report.

Definitions: The S&P 500 is a stock market index of 500 of the largest companies listed on stock exchanges in the United States. The Nasdaq Composite Index is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange. S&P Banks Select Industry Index comprises stocks in the S&P Total Market Index that are classified in the GICS asset management & custody banks, diversified banks, regional banks, other diversified financial services and thrifts & mortgage finance sub-industries. Markit CDX North America High Yield Index represents one hundred liquid North American entities with high yield credit ratings as published by Markit. COBE VIX Index is a real-time market index representing the market’s expectations for volatility over the coming 30 days.