Welcome to the Weekly Compounder Update series. Each week I break down the news, earnings, and market moves that matter most for the companies we track at Arbalist Money, with a focus on quality compounders. The goal is to cut through the noise and highlight the developments that count for long-term investors.
General News
- Big Tech vs. Washington. U.S. lawmakers pressed Amazon, Microsoft, and Google over H-1B visa practices while floating a potential $100,000 visa application fee (TechCrunch, Reuters). This will not dent earnings for these names today, but it raises the risk of higher hiring costs and tighter pipelines for skilled workers.
- Firms are already reacting. Some tech companies have warned H-1B employees not to leave the U.S. while the issue plays out (TechCrunch). When talent gets stuck in place, it slows innovation and ultimately impacts competitiveness. I have seen it before in tight labor markets.
Company Spotlights
S&P Global (SPGI) & Moody’s (MCO)
What happened: On September 18, FactSet reported Q4 EPS of $4.05 vs. $4.15 expected and issued cautious FY26 guidance of $16.90–17.60. Management flagged softer client spending in certain analytics products. Shares of FDS sank 16% on the report, dragging down SPGI and MCO more than 4% on fears the caution could apply to them as well. The weakness continued this week, with MCO and SPGI down more than 1% and 4%, respectively.
Why it matters: While credit ratings remain the core profit engine for SPGI and MCO, ESG data and AI-driven analytics are the growth levers. If budgets tighten, those high margin areas will likely feel it first which could stall growth. Since both of these companies trade above 30x earnings, any hint of a slowdown will amplify the downside.
My take: These are wide-moat cash machines with regulatory barriers and sticky customer relationships. At current multiples, volatility is part of the game. But given the durability of ratings and the long-term demand for premium data, I see pullbacks like this as attractive entry points. See my SPGI vs MCO comparison.
Costco (COST)
What happened: Costco posted Q4 revenue of $86.2B (in line with expectations) and membership fee revenue jumped ~14%, aided partly by a price hike that took effect September 1, 2024. Same-store sales, meanwhile, rose 5.7%, falling short of consensus at 5.9%. The stock was punished, falling around 3% on the comp miss.
Why it matters: At nearly 50x 2025 earnings, Costco is priced for perfection. A 20bps comp miss in same store sales is enough to spark selling even when the business is firing on all cylinders. That’s the problem with owning a loved stock at a premium multiple.
My take: Costco Q4 performance was solid. Costco remains a wide-moat compounder. But the valuation is stretched, forcing more discipline. And if we see comps weaken further, we could see a real pullback. I would argue, until then, patience is warranted. Check out my Costco analysis for more.
Disney (DIS)
What happened: Disney reinstated Jimmy Kimmel after suspending his show following backlash tied to remarks made after Charlie Kirk’s death. That decision sparked another round of political headlines. At the same time, Disney hiked streaming prices (CNBC) and used Destination D23 to highlight its upcoming content slate, including a Toy Story re-release (CNBC).
Why it matters: Streaming is Disney’s growth engine. Price hikes will test whether subscribers value the content enough to stay, especially as controversy around Kimmel risks adding brand distraction. With linear TV in decline, streaming ARPU and retention are the key metrics to watch. The bigger question is whether Disney’s brand resilience can offset the headline risk without bleeding into its other businesses.
My take: Disney’s IP pipeline remains world-class, and the parks division continues to be a cash cow despite its cyclical nature. But the company can’t afford streaming churn at a time when margins are under pressure. Next quarter will be a litmus test for Disney’s pricing power and brand resilience. See my Disney write-up.
Qualcomm (QCOM)
What happened: Qualcomm introduced a new PC chip with enterprise-grade security features (Reuters).
Why it matters: Qualcomm’s core handset market is mature and cyclical. PCs and autos are the next frontier, and enterprise adoption is especially sticky. Qualcomm is banking on AI-driven chips for PCs and autos to offset the slower growth coming from handsets. By leaning on its edge in low-power design and 5G integration, Qualcomm is positioning itself to win contracts in a market with recurring upgrade cycles. Success here would mean one step closer to a less concentrated revenue mix and the “second act” investors have been waiting for.
My take: This is the kind of pivot investors have been waiting for. No. This will not transform results overnight, but it expands Qualcomm’s growth runway beyond handsets. At around 15x forward earnings, expectations remain low particularly relative to other AI-exposed names. But if enterprise adoption gains traction, the upside could be meaningful. See my Qualcomm analysis.
Accenture (ACN)
What happened: Accenture beat Q4 revenue estimates ($16.98B vs. $16.89B) but announced an $865M restructuring plan. The move includes about 11,000 job cuts and a pivot toward AI consulting. Shares slipped as investors worried about restructuring costs as well as possible H-1B visa fee headwinds (Reuters, Barron’s).
Why it matters: Accenture plays in one of the most competitive spaces in professional services. To stay competitive, Accenture must stay ahead of shifting client demand. And right now, demand is shifting to AI. The restructuring is going to impact margins near term, but it positions Accenture to remain the go-to advisor for Fortune 500 companies.
My take: This is likely the right move for Accenture. AI consulting spend is still in the early innings, so this is a wait-and-see story. But with the stock already down more than 30% YTD, much of the skepticism is arguably priced in. If enterprise AI budgets materialize as expected, Accenture’s scale and global reach put it in a reasonable position to benefit.
Watchlist Movers Snapshot (+/- 3%)
Here are the most notable movers from our compounder watchlist this week. Amazon, Costco, and S&P Global all pulled back on headlines, while Fair Isaac gained momentum.
Closing Thoughts
The purpose of these updates is not to recap headlines but to stay focused on the businesses that matter. Quality compounders are built to endure, yet they still operate in a world where earnings, regulation, and headlines move markets. Following these developments week to week helps us see where moats are holding, where sentiment is stretched, and where opportunity is forming.
Staying informed lets us act with conviction when volatility creates better entry points. That is the value of keeping up with the news on these names.
👉 I’ll be back next week with another roundup.
