ADDX GO Market Morning Wrap - 26th Feb

Stock Market

Key Events

• Consensus estimates project $NVDA NVIDIA to report $42 billion in Q4 revenue, with growth slowing to 73% year-over-year. However, investors remain divided on the company’s outlook. Bears argue that NVIDIA is facing the “curse of high expectations”, alongside rising cost pressures from DeepSeek’s lower-cost AI alternatives, potentially bursting the AI bubble. Bulls, on the other hand, believe strong demand and a recent period of stock stagnation suggest greater upside potential. Additionally, intensifying AI competition could ultimately benefit NVIDIA. Analysts at Morgan Stanley suggest that if NVIDIA’s revenue surpasses expectations, Asian AI stocks could rise 3–15%, while a miss could trigger a 5–10% decline.
• Late Tuesday night (Beijing time), $BABA Alibaba officially open-sourced its Wanxiang 2.1 video generation model, featuring two distinct versions. The 14-billion-parameter model is tailored for professional creators, while the 1.3-billion-parameter version is optimized for consumer-grade GPUs, such as NVIDIA RTX 4090, requiring just 8.2GB of VRAM to generate high-quality 480p videos. Performance tests indicate that Wanxiang 2.1 rivals some closed-source models with five times the parameter count.
• $SMCI Super Micro Computer soared 23% in after-hours trading following the release of delayed Q2 earnings. The company reported $5.678 billion in revenue for fiscal Q2 2025, up from $3.665 billion a year ago, with net income rising to $321 million from $296 million in the same period last year.
• On Tuesday, $CSCO Cisco announced an expanded partnership with NVIDIA (NVDA.US) to develop a unified AI technology architecture across their product portfolios. As part of this collaboration, NVIDIA will integrate its Spectrum-X Ethernet networking technology with Cisco’s Silicon One and SuperNIC solutions. Cisco will also serve as the exclusive chip partner for NVIDIA’s Ethernet networking platform.
• $LLY Eli Lilly announced price reductions for smaller-dose versions of its blockbuster weight-loss drug Zepbound in an effort to make the treatment more affordable for uninsured patients. The company will lower prices for the 2.5mg and 5mg Zepbound vials to $$349 and$$499 per month, respectively, reflecting a $50 price cut per dose. Following the news, Eli Lilly shares rose 2.31%, while $HIMS Hims & Hers Health —a company benefiting from generic weight-loss drugs—plunged 22.32%.

Forex

Key Events

• Federal Reserve official Thomas Barkin stated on Tuesday that he would adopt a wait-and-see approach regarding the central bank's rate policy until inflation decisively returns to the Fed’s 2% target. Barkin emphasized that prevailing uncertainties—whether driven by shifts in Trump administration policies or other factors—necessitate a cautious stance as the Fed navigates its inflation battle. Given the current environment, he sees little room for significant monetary policy adjustments and prefers to observe how these uncertainties unfold before making any moves. He also reaffirmed that interest rates should remain moderately restrictive until officials gain greater confidence in inflation returning to target levels.
• U.S. Treasury Secretary Besant highlighted concerns over a labor market increasingly concentrated in the public sector, with private-sector employment stagnating. He reiterated that tariffs are a critical component of the administration’s privatization agenda, aimed at boosting U.S. industrial capacity, creating jobs, generating government revenue, and correcting global supply imbalances. Besant reaffirmed the target of reducing the fiscal deficit to 3% by 2028, while dismissing speculation about dismantling key government institutions. Analysts suggest that any future tariff implementations will likely weigh fiscal considerations against the need to control inflation.
• According to Reuters, the newly appointed House Federal Reserve Oversight Task Force is preparing to intensify scrutiny of the Fed’s decision-making process. The committee aims to conduct a broad review of the central bank’s rate policy, including whether controlling inflation should take precedence over supporting employment. The special congressional task force is set to hold its first public hearing in early March.

Cryptocurrency

Key Events

• The crypto market experienced significant turmoil on Tuesday, with Bitcoin (BTC) plunging to $86,050, its lowest level since November, while Ethereum (ETH) dropped 11% to $2,313, marking its weakest price since October. Bitcoin has now fallen nearly 20% since Trump’s inauguration. Analysts attribute the downturn to a combination of macroeconomic uncertainties, speculation-driven volatility in memecoins, and eroding investor confidence, rather than a single catalyst.

Market Events and Most Anticipated Earnings Releases