The playbook continues: beat on earnings, disappoint on guidance, watch the stock fall. Walmart just joined the club.
Yashika Arora
Market Analyst
This Week So Far
Day S&P 500 Nasdaq Dow
Tue (Feb 18) +0.56%. +0.78%. +0.26%
Wed (Feb 19). Trading now. Trading now. Trading now
Markets bounced yesterday. The S&P climbed 0.56%, the Nasdaq gained 0.78%, breaking its five-week losing streak momentum. FOMC minutes showed a divided Fed — some officials even floated rate hikes if inflation stays sticky.
But this morning, the real story dropped before the bell.
Walmart reported Q4 2026 earnings at 6am CT. Heres what happened:
Metric Actual Expected Result
EPS $0.74 $0.73 Beat
Revenue $190.66B $190.43B Beat
Same-store sales +4.1% — Strong
E-commerce growth +27% — Strong
Revenue up nearly 6%. E-commerce still ripping at 27% growth. Higher-income customers flocking to Walmart. By any measure, this is a solid quarter.
The stock dropped 3% in premarket.
Why? The FY2027 outlook.
Walmart guided FY2027 EPS to $2.75-$2.85.
Street expected $2.96.
Thats a 5-7% miss on forward guidance. One number. Thats what matters now.
Sound familiar? It should.
Company This Week Earnings Guidance Stock
WMT Feb 19 Beat Missed by 5-7% -3%
PANW Feb 18 Beat by 10% Missed by 15%. -10%.
CSCO Feb 12 Beat. Margin guide weak. -11%
GIS Feb 18 — Cut outlook -7%
Four companies. Four earnings beats or inline results. Four stocks down on guidance.
This is the 2026 market: guidance > results.
CFO John David Rainey pointed to a few factors:
Tariff uncertainty — Trump's tariffs are still creating pricing pressure
Investment spending — Walmart is investing heavily in automation and e-commerce infrastructure
Conservative stance — New CEO John Furner (took over Feb 1) likely wants to set a low bar he can beat
The irony: Walmart is actually doing great. Market share gains across all income levels. E-commerce finally profitable. Advertising business (Walmart Connect) up 33%. They just hit $1 trillion market cap.
But "doing great" doesn't matter if you cant promise "will keep doing great."
Three days, three major stories:
Tuesday (Feb 18):
Markets bounced (S&P +0.56%, Nasdaq +0.78%)
Palo Alto dropped 10% despite beating earnings
FOMC minutes showed divided Fed, some floated rate hikes
Amazon +2% on Ackman stake increase
Nvidia +1.6% on Meta chip deal
Wednesday (Feb 19):
Walmart beats, guides low, drops 3%
Market waiting on PCE inflation data (Friday)
Nvidia earnings next week (Feb 25)
The pattern:
Good companies are still growing
But the market is punishing anything that suggests growth might slow
Guidance matters more than results
The "AI trade" is bifurcating — infrastructure (Nvidia) holds up, software gets crushed
Friday (Feb 21):
PCE inflation (Fed's preferred gauge)
Q4 GDP advance estimate
This is the big day — PCE will set the tone for March rate expectations
Next Week:
Nvidia earnings (Feb 25) — the most important print of the quarter
Blackwell guidance will determine if the AI infrastructure trade keeps working
Headlines this morning: "Walmart beats earnings expectations"
Reality: Stock down 3% on guidance miss.
This keeps happening because most people read headlines, not earnings reports. The guidance was on page 2. The stock move was on page 1.
HeyTheo shows you what actually matters — the metrics that move stocks, not the headlines that don't.
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1. Guidance is the only metric that matters right now. Beat earnings by 10%? Doesn't matter. Miss guidance by 5%? Stock down. This is the new normal until the market regains confidence in forward estimates.
2. "Quality" isnt protection. Walmart is literally a $1 trillion company with accelerating e-commerce, expanding margins, and market share gains. Still got punished. Nobody is safe from guidance risk.
3. The Fed is uncertain too. FOMC minutes showed officials floating rate hikes if inflation sticks. That adds another layer of uncertainty to forward guidance.
4. Wait for Nvidia. Next Tuesday's earnings will be the real test. If Nvidia guides strong on Blackwell, the tech selloff might stabilise. If they disappoint, expect more pain.
Walmart beat earnings. Stock dropped 3%.
Palo Alto beat earnings by 10%. Stock dropped 10%.
Cisco beat earnings. Stock dropped 11%.
The market is telling us something: it doesn't care what you did. It cares what youre going to do. And right now, nobody is confident enough in their forward outlook to satisfy investors.
Until that changes, expect more of the same: beats followed by drops, rallies followed by selloffs, and guidance driving everything.
Watch the guidance, not the earnings.
