Weekly Investment Update (01/30/2026)

Early earnings reports offered a mostly positive tone, with AI-related spending emerging as a consistent theme. Meta guided revenue well above expectations, citing AI-driven gains in engagement and monetization. Apple surprised on margins despite supply cost concerns, while Microsoft and others highlighted continued investment in infrastructure and productivity-enhancing tools.

Across sectors, companies pointed to growing demand for AI capabilities, both as a source of revenue and as a driver of internal efficiency. Data center, semiconductor, and software companies all emphasized rising order activity tied to AI workloads, while industrial and logistics firms cited early productivity gains from automation and AI adoption.

While macro risks remain, corporate results so far point to resilient demand, improved margins in key areas, and a clearer link between AI investment and business results. These developments continue to support the broader earnings outlook and long-term growth narrative.

Gold and Silver Rally as the Dollar Softens, but Long-Term Dollar Drivers Remain Intact

What is happening: Gold surged past $5,500 per ounce this week, reaching a new all-time high and extending a powerful rally that began in late 2024. The move marks a strong start to 2026 and places gold at the center of broader strength across precious metals. Silver’s appreciation has been even more extreme, exhibiting a parabolic price pattern that has drawn increased investor attention.

The U.S. dollar has depreciated over the same period, as measured by the Trade Weighted Dollar Index, though the decline remains modest by historical standards and relative to metals. The currency is roughly 15% below its 2022 peak and about 12% lower than at the start of 2025.

Stepping back, the dollar is coming off a prolonged period of strength that began after the Global Financial Crisis and culminated in a 20-year high in 2022 amid elevated inflation, aggressive rate hikes, and heightened market volatility. Even after the recent decline, the dollar remains strong relative to long-term history.

Why it matters: The key question for markets is not simply that gold is rising or the dollar is weakening, but what is driving those moves.

The U.S. dollar has historically functioned as a defensive, safe-haven currency, often strengthening during periods of market stress. From late 2021 through 2022, the dollar surged as inflation accelerated, interest rates rose rapidly, and investors sought safety amid market volatility. Against that backdrop, some degree of dollar weakness today is unsurprising; inflation has moderated, interest rates are falling, global growth expectations have improved, and investor risk appetite has increased, reducing demand for safe-haven currencies.

It is possible that the size of the move is being amplified by concerns around the U.S. fiscal trajectory, questions about central bank credibility and leadership, and a gradual shift by some foreign central banks away from U.S. assets due to geopolitical considerations. These dynamics have fueled narratives around potential dollar debasement.

However, if true debasement were underway, the decline in the dollar would likely be far more severe. Bond yields and inflation expectations would likely be rising sharply, and equity markets would likely be under pressure. None of those conditions are present, suggesting that the move is cyclical. Importantly, the long-term structural underpinnings of the U.S. dollar as the world’s reserve currency remain intact.

As interest rates fall and the dollar weakens, it is common to see gold rise. Gold can also benefit if investors and central banks choose to diversify from one reserve asset into another. Indeed, central bank gold purchases have increased in recent years, though this trend began in late 2021 and followed a period of below-average buying.

What stands out today is the sheer magnitude of the move. Dollar weakness alone does not fully explain gold’s surge, and silver’s correlated participation makes it unlikely that the rally is driven purely by safe-haven demand. Momentum appears to be playing a meaningful role.

Initially, that momentum trading likely came from quantitative strategies and hedge funds. More recently, ETF inflows have accelerated sharply, suggesting that individual investors have become the marginal buyers pushing prices higher.

From a portfolio perspective, Bessemer does not maintain a strategic allocation to gold or commodities as they do not generate cash flows and are therefore difficult to value and compare to equities and bonds. Stocks and bonds also compound over time and tend to generate higher returns for investors. That said, portfolios can still benefit from rising commodity prices through exposure to individual companies, either through equity or credit holdings, or tactically through ETFs, as well as through an allocation to alternatives, including real assets and hedge funds.

Fourth-Quarter Earnings Highlight Continued Importance of AI Investments, Active U.S. Consumer

What is happening: Fourth-quarter earnings season is in full swing this week with 44% of the S&P 500 providing results thus far, including four of the Magnificent 7 companies. Mega-cap technology and AI-related names are poised to continue as key drivers of overall S&P 500 earnings. However, the materials and financial services sectors are forecasted to show the second and third highest EPS gains, respectively, as growth continues to broaden. The latest consensus S&P 500 expectations call for 8.2% year-over-year EPS growth, which would mark the 10th consecutive quarter of gains.

For the quarter, Meta earned $8.88 per share on revenue of $59.9 billion, a 24% year-over-year increase. Ad revenue was more than $2 billion ahead of consensus and 1Q 2026 midpoint revenue guidance also exceeded consensus estimates. Meta shares gained more than 10% on Thursday. Apple reported strong results as iPhone sales topped $85.3 billion, the highest ever, as upgrades to premium-priced Pro and Pro Max models exceeded prior rates and forecasts. Apple posted all-time records across every geographic segment — as well as in its Services unit — with overall revenue increasing 16% to $143.8 billion.

Similarly, Microsoft posted solid overall EPS of $5.16 on total revenue of $81.3 billion, including a 39% increase in its Azure cloud business. However, fears over a combination of slower future growth at Azure coupled with higher AI capex eroded investor enthusiasm. Microsoft’s share price dropped more than 10% on Thursday. Tesla reported a 61% drop in profits as it also lost its position as the world’s top electric vehicle maker. Capital and corporate resources shifting from car production to robots has caused some skepticism. Tesla shares fell about 3.5% following its Wednesday earnings announcement.

Outside of technology, Southwest Airlines, Royal Caribbean, and C.H. Robinson Worldwide were a few names that also posted positive results this week as robust consumer spending and AI productivity gains drove solid returns. Alternatively, names such as SAP, Las Vegas Sands, and United Rentals were lower this week as softer-than-expected revenues, margin compression, and subpar guidance contributed to losses. Despite pockets of weakness, most quarterly results continue to highlight a resilient environment for corporate profitability across many sectors.

Why it matters: The fourth quarter of 2025 will be a critical inflection point for equity markets as investors reassess the pace and magnitude of AI-related deals, capital expenditures, and innovation that propelled markets last year. After a year of aggressive capital investments being announced, companies will increasingly be required to convince investors that large increases in capex will translate into sustainable profit growth, resilient margins, and above-average returns on invested capital. This reassessment is likely to occur against a backdrop of heightened market volatility as expectations are refined and repriced. Many sectors and individual stocks are entering the year with elevated valuations that leave little room for disappointment. As a result, fourth-quarter earnings and forward guidance could offer an early signal to help investors handicap which companies can grow into, and ultimately justify, current valuation multiples. 

For long-term investors, fourth-quarter results will also highlight a growing bifurcation in market outcomes, with clear winners separating themselves from the broader pack. Companies that can demonstrate tangible returns from innovation and disciplined capital deployment are likely to be rewarded, while laggards posting uneven results may struggle to maintain investors’ confidence. This divergence in results may become more pronounced as 2026 progresses. Broad market gains that may have masked differences in underlying fundamentals may become less of a factor. Consequently, stock selection, fundamental research, and active management will be more relevant and useful for investors.