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Ticker Reports for February 10^th

SPOT $475.69  (+14.67%)

DPRO $7.34  (-4.68%)

NOW $106.57  (+2.60%)

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(From Banyan Hill Publishing)

Spotify Just Crushed Earnings—So Why Is the Stock Still Down 34%?

Spotify Technology (NYSE: SPOT) delivered a strong earnings report that reinforces the company’s leadership in audio streaming. It also signals that the company’s new initiatives will be a catalyst for future growth. For investors, that means it’s a good time to look at SPOT stock, which was down more than 34% for 2026 in early February.

Heading into earnings, the SPOT stock chart showed clear signals of being oversold. The earnings report supports a bounce higher, particularly as money is beginning to flow back into technology stocks.

As of the market close on Feb. 9, the stock price was below its lower Bollinger band, and the relative strength indicator was firmly in oversold territory. The 17% bump in the first hour of trading pushed the stock back to its 20-day simple moving average (SMA).

With positive subscriber momentum backed by Spotify’s foray into new products, including video and audiobooks, this is a solid entry point for investors looking for growth in 2026.

Analysts Have Been Leading the Way

Prior to the company’s earnings report, SPOT stock dropped sharply after KeyCorp lowered its price target to $720 from $830. That was slightly below the consensus price target of $724.16. KeyCorp wasn’t alone. Since the beginning of the year, many analysts have lowered their price targets for SPOT stock.

However, this is a time when investors have to separate the action of lowering the target from what the new target is. In this case, most of the targets are well above the stock’s $414.74 price as of the market close on Feb. 9. Several analysts also had a price target above the consensus price target.

It’s also important to note that, even with the lower price targets, most analysts have maintained a rating of Buy or its equivalent. In fact, the Spotify analyst forecasts show that 34 analysts rate SPOT stock, with 26 giving it a Buy or equivalent rating and only eight a Hold or equivalent rating.

Spotify Is Firing on All Cylinders

Revenue came in at 4.53 billion euros (approx. $5.27 billion), slightly above the €4.52 billion ($5.14 billion) estimated. However, the bottom line was the real story. Spotify delivered adjusted earnings per share (EPS) of €4.43 (approx. $5.16), which was significantly higher than the estimate for €2.78 (approx. $3.16).

The company also added 38 million monthly active users (MAUs). That brought the total number of MAUs to 751 million, which is up 11% year-over-year (YOY). Premium subscribers grew to 290 million, a 10% gain YOY. More importantly, growth in both segments occurred across all regions.

But with about two-thirds of the company’s subscribers still on the free plan, this quarter’s results show that Spotify is becoming more efficient at making money from each person while keeping its costs under control.

This showed up in the company’s operating margin, which came in at 15.5%, significantly higher than the 11.2% from the prior year’s quarter. This efficiency is being driven by a combination of pricing and mix.

Premium revenue grew—not only because of more subscribers, but also because Spotify was able to hike prices, strengthening the bottom line. Spotify is also demonstrating an ability to manage costs. Gross margin came in at 33.1%, higher than the company’s guidance of 32.9%.

However, investors are forward-looking, and that’s why they’re looking at ad revenue. Ironically, that was a weak spot in this report. But the idea is simple. This quarter was about increasing subscription numbers. This will allow Spotify to charge higher ad prices. Analysts believe that could lead to $1 billion in additional revenue in the next 12 months.

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Draganfly Is Becoming a Key Defense Drone Partner—Faster Than Expected

2026 could be a breakout year for drone companies, as industries across sectors move to execute on long-anticipated plans to shift toward unmanned operations in construction, logistics, agriculture, and much more.

Shares of drone companies as a group are already off to a promising start this year, with the REX Drone ETF (NASDAQ: DRNZ) already up by about 7% year-to-date (YTD).

Within this burgeoning industry, tiny $41-million firm Draganfly Inc. (NASDAQ: DPRO) could be worth watching in particular.

Despite its small size, Draganfly’s drones have already proven attractive for military applications both domestically and abroad. The firm is engaging in strategic partnerships to leverage its influence beyond its capacity on its own.

Further, Draganfly’s rapid revenue growth (more than 14% year-over-year in the last reported quarter), competitive cash position, and plans for expansion position it well to continue to capitalize on opportunities. 

Partnership With Air Force Is Light on Details, But Promising Nonetheless

The primary and most recent catalyst for investors to move on DPRO shares may be Draganfly’s early-February announcement that it will provide key drones and training services to U.S. Air Force Special Operations Command units in partnership with DelMar Aerospace. While the company did not include specifics about the value of the contract or other terms, investors may still see the news as proof that Draganfly’s drones have risen above those of competitors for certain essential Air Force operations.

The nature of the training will be to prepare drone operators to employ uncrewed systems in a variety of environments, suggesting that the federal government may expect to continue to partner with Draganfly in the future outside of training scenarios as well.

International Defense Applications Continue to Build

Outside of the U.S. military, Draganfly is also gaining traction with other governments around the world. The company has seen significant success in the Asia-Pacific region in recent months, beginning with a November contract through an unnamed established defense contract for its Commander 3XL drone systems for an international military application. Draganfly followed up in December 2025 with an announcement that it would partner with Babcock International Group and Critical Infrastructure Technologies to further expand into the region.

Draganfly is also seeing success in Europe thanks to its partnership with Search and Rescue Sweden to provide tools and services relating to missing-person recoveries, wilderness rescues, and police missions. That announcement came in mid-January after the company had already completed joint flight testing and validation with its partners.

Like the U.S. Air Force announcement, all of these reports are slim on details about the financial impact of these contracts for Draganfly and its investors. In that way, investors will likely have to wait until the company reports its next earnings in March for a fuller picture of the implications. In the meantime, those optimistic about the trajectory of Draganfly’s international business might consider buying prior to this earnings confirmation.

Production Ramp-Up in Motion

Draganfly is also preparing to meet an anticipated surge in demand from military partners by ramping up its production capacity to reach $100 million in 2026, with plans to continue to build on that as well. The company is also building in protections around tariffs, manufacturing and delivery, supply chain concerns, and other factors that should allow it to continue to produce without interruption amid changing external environments.

A 20-fold increase in Draganfly’s production is vital to scaling its operations, and the prospect of additional new military contracts could achieve just that. This may be one reason why analysts are increasingly taking notice of the small drone name.

With a new bullish rating from Northland Securities in January, all four Wall Street analysts reviewing DPRO shares in the last year view them positively.

They also expect the stock price to increase by about 118%, based on a consensus price target of $16.75. If the company can indeed capitalize on rising interest from military customers and maintain its sales growth trajectory amid risks, including dilution potential and continued profitability struggles, investors getting in now may be well rewarded in the months to come.

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ServiceNow’s Massive Fall: Analysts Eye +70% Gains Amid AI Risks

So far, 2026 has been a bad time to be a software stock. The iShares Expanded Tech-Software Sector ETF (BATS: IGV) is a good proxy for software industry performance. As of the Feb. 9 close, the fund is already down nearly 20% in 2026.

This steep decline comes as markets fret over the emergence of new artificial intelligence (AI) software development tools. There is a belief that as software becomes easier to develop using AI, incumbent players in this space will face significant competitive pressures. Still, investors seem to be selling almost everything in software, with little regard to the true threats facing each individual firm.

These broad-based, somewhat indiscriminate sell-offs can be an opportunity, allowing investors to get in on top-tier stocks at basement prices. One software behemoth in particular is worth discussing.

Despite posting impressive financial results, the stock fell approximately 55% from its all-time high by the second week of February. Let’s break down the positives and negatives surrounding ServiceNow (NYSE: NOW) and gain an updated perspective on the tech stock. 

ServiceNow: 2025 and 2026 Numbers Paint Impressive Picture

ServiceNow had a strong 2025 on the financial front. Revenue grew by 21%, and adjusted operating margin increased by over 150 basis points to over 31%. Free cash flow rose by 34%, with free cash flow margin coming in at 34.5%. This was a huge, over 300 basis point expansion versus 2024.

The company’s outlook for 2026 is impressive as well. It expects subscription revenue growth between 19.5% and 20%. This includes a 1% contribution from its Moveworks acquisition, indicating that ServiceNow’s core business will see growth between 18.5% and 20%. While a deceleration from previous years, this growth is strong. 

ServiceNow also sees operating and free cash flow margins expanding to 32% and 36%, respectively. This comes as the firm is using AI internally to decrease costs. Additionally, the annual contract value (ACV) for the Now Assist AI agent doubled in Q4 to $600 million.

The company is targeting over $1 billion in Now Assist ACV in 2026. Overall, these numbers are very good, with the company continuing to expect near 20% growth and margin expansion.

AI Is a Double-Edged Sword for NOW

Still, reading between the lines raises some concerns. The company sees growth decelerating, even though it has a rapidly growing AI product in Now Assist. This epitomizes one of the key debates around ServiceNow and other software incumbents. The argument against ServiceNow isn’t about new AI tools replacing its offerings. ServiceNow’s software is deeply embedded in the enterprises that use it, so this isn’t notable risk, at least near-term.

However, the main way ServiceNow grows revenue is through companies adding more employees or “seats” to their ServiceNow subscriptions. The catch-22 is that the best way for ServiceNow’s customers to benefit from AI is by using fewer people to do the same or more work. If AI allows a company to reduce headcount or slow headcount growth, ServiceNow’s seat-based business model could face a structural growth headwind.

ServiceNow is introducing more consumption-based pricing. This is where the company earns revenue when an AI agent completes a task, for example. However, this has unfavorable economic consequences. Consumption-based revenue is less predictable and, particularly when derived from AI, introduces more variable costs. This takes the form of paying inference costs when employees use AI tools, which could put long-term pressure on margins.

Another risk for software stocks is that the release of new AI tools is likely only to increase. Recently, the release of these tools alone has been enough to send software stocks down.

Wall Street Sees Huge Upside in NOW

Notably, Wall Street analysts are highly bullish on ServiceNow. The consensus price target near $193implies approximately 86% upside in the stock. The average of targets updated after the company’s latest earnings report is moderately lower, near $182. This figure still implies around 75% upside.

The concerns around ServiceNow are far from trivial. Still, the stock has fallen to a level that feels overly pessimistic. This provides an opportunity in the long term. 

But, further AI product releases could put more pressure on ServiceNow shares until the company proves that the market has overestimated their impact.

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