You know it’s a big week when every news outlet, podcast, and blog drops an emergency or off-cycle update. That’s exactly what we saw this week with the Supreme Court’s tariff decision and the administration’s immediate reaction. This wasn’t exactly a surprise, prediction markets and most prognosticators had been pointing in this direction for a while, but now that it’s here we get to navigate the fallout.
Supreme Court Tariff Decision
For anyone who’s been living under a rock, the reason this decision is such big news is that tariffs have been the primary leverage (cudgel?) the administration has been using in what seems like every negotiation with foreign countries. The original legal basis the admin used to impose those tariffs was the International Emergency Economic Powers Act (IEEPA). The admin argued that the country was in a crisis and that under IEEPA, the president had the authority to impose tariffs. The court’s decision ruled that the president actually doesn’t have that authority and that the tariffs were effectively illegal.
Now, where does that lead? Well, first, all those tariffs that got paid potentially need to be refunded to the corporations that paid them (and for those corporations that already passed the cost on to consumers, that could mean a double payday). Unfortunately, the Supreme Court failed to weigh in on this specific topic for…reasons? So we’re in for a bit of chaos on this front as lawsuits get filed and the issue winds its way through the courts. This doesn’t exactly seem like the most efficient way to handle things, but I guess that’s just America at the moment. Anyone looking to make a bet on how this goes is taking a massive gamble. It will simply take too long to get a definitive answer, and there are too many opportunities for things to go in completely unexpected directions to make the risk worth it.
Second, and probably most salient, is what the admin is going to do next. They have already said they will impose a blanket 15% tariff under a different statute (one that limits the time these tariffs can be in place to 150 days). Long term, they seem poised to continue pulling the tariff lever in any way, shape, or form they can. It’s already being tossed around, and I hate to admit that I agree, but the infamous quote attributed to Andrew Jackson seems to echo loudly today:
John Marshall Has Made His Decision, Now Let Him Enforce It.
Andrew Jackson
The markets jumped on the news, with the major indices ending up on the day, although the move was rather tepid given how the market reacted when the tariffs were initially imposed. I, and many others, believe this outcome was largely priced in. What’s most likely holding things down is that no one really believes this is the end of the line for tariff. The future is just going to get messier and murkier. Keep an eye on the VIX this week. I expect it’s going to jump.
Section 230 and Meta Court Case
A hugely consequential court case for the future of the internet and big social media platforms is underway in LA, and this week we saw Mark Zuckerberg take the stand to defend Meta. The (extremely boiled down and oversimplified) crux of the case is that Meta made deliberate design choices that negatively impacted children’s mental health and wellbeing in order to boost engagement and retention. In the past, Section 230, the law that says platforms are not liable for the content users post as long as they take action when notified about illegal content, has been a shield protecting them from all sorts of liability. However, a while back, Clarence Thomas noted that design choices could be the avenue by which plaintiffs go after the platforms, and this case is the first true bellwether argument in line with that reasoning.
If the jury finds in favor of the plaintiffs, it will open up all platforms to intense scrutiny over their design decisions, potentially reshaping how they operate. Fundamentally, this would rewrite the entire premise of these businesses, and platforms like Reddit, Meta, X, YouTube, and TikTok would be forced to change. This, coupled with efforts across the globe to limit or block youth access to social media entirely, will almost certainly lead to top-line growth compression. It will be much harder for pure-play social media companies and stocks to justify their current multiples, and we’ll most likely see a sharp sell-off if this comes to pass.
Claude Continues its SaaS Rampage
Another week, another Claude feature causing a market panic sell-off. This week, the cybersecurity
industry was the latest to feel Anthropic’s wrath as they
announced the ability for Claude to scan codebases for potential security vulnerabilities.
Similar to the other sell-offs we’ve seen, this is overblown, especially in light of what this
feature actually does. Crowdstrike
Rapid Fire Observations
Some quick top-level thoughts on other big things that happened last week:
- Figma Earnings: Figma
released their Q4 and full-year reports. As I mentioned in my deep dive, I was looking here for signals on how their AI implementation plans were going and if they were continuing to see growth in NDR. I’ll be doing a more in-depth update, but the answers to both were very positive. They also announced their Claude Code integration, which sent the stock up 16% on the week. - Klarna Earnings: I mentioned last week I was looking to Klarna
earnings to get a signal on consumer strength. They reported Gross Merchandise Volume (GMV) surged 32% year-over-year to hit $38.7 billion, pushing their quarterly revenue past the billion-dollar mark for the first time at $1.082 billion (up 38% YoY). What’s really interesting is that their provision for credit losses actually dropped to 0.65% of GMV, and the company noted that 30-plus days past due delinquency rates are showing a consistently improving trend. It seems that consumers are still making their debt payments, which is a comforting macro signal. - Robinhood Letting Retail Buy Pre-IPO: Robinhood announced this week that they are launching a $1B fund to let retail investors buy pre-IPO shares. I won’t be getting into this one myself, but I’m interested in seeing how this fund fares and what the overall return profile will look like.
- Ads in AI: This is becoming the hottest battleground topic, seemingly supplanting benchmark scores, as Perplexity drops their advertising plans. I’ve firmly held the belief that Ads in AI is a bad idea. It will completely erode trust in an environment where user trust is paramount to continued usage. Burn the user once with bad info, and they’re less likely to come back while the drumbeat of negative news continues. I don’t like the UX of ads in AI, and I don’t like the slippery slope it will inevitably open in the generation of answers. It’s a bad idea all around. There’s a reason OpenAI viewed it originally as a last resort, and now that they’re going full bore on it, all the other players are virtue signaling that they’re not going in that direction. I say “virtue signaling” because I expect they all will eventually incorporate ads; they’re just waiting to see how OpenAI does it so they can learn from those mistakes before diving in themselves.
What’s Happening Next Week
Volatility. A lot of big things happening all at once.
- Nvidia earnings: Nvidia
, the largest company in the world by market cap, reports on Wednesday. I expect we’ll continue to see jaw-dropping revenue growth as the AI players continue to increase CAPEX. Let’s see how Jensen guides, but I bet it will be rosy no matter what. Will they continue to meet Wall Street’s lofty expectations? Things are more jittery and on a knife’s edge than in the past, so if they miss, things could get ugly fast. - Workday & Salesforce Earnings: Workday
has had a rough 2026 so far, down 33% YTD. Salesforce hasn’t fared much better at -27%. Both report earnings this week with their entire business model (and as I’ve argued in the past, probably their entire business identity) under threat from AI. I’m looking to see how they guide and what they’re seeing in terms of retention. Any sign of weakness here, and they’re going to get clobbered. - Tariff Updates: I expect we’ll get a deluge of news and updates on the tariff situation, although I don’t expect the picture will get much clearer in the next few days. I’m looking to see how the administration reacts and if it follows through on the blanket tariffs. The market open on Monday will be telling.
The Last Word
If there’s a throughline this week, it’s that the old playbooks are being thrown out the window. Whether it’s the Supreme Court upending the administration’s primary economic weapon, the LA courts opening the door to fundamentally alter how social media operates, or AI clobbering SaaS, structural change is happening fast. We are staring down the barrel of a highly volatile week. Keep your head on a swivel, don’t get shaken out by headline panic, and as always, watch what companies actually do, not just what the market thinks they’ll do.