The Monday pre-market saw all three major US stock index futures on an upward trajectory, while European major indices displayed mixed resultsThis marked a notable shift for the US markets, which had faced considerable turmoil in the previous week, primarily driven by data that raised alarms about the health of the American economyThe Purchasing Managers' Index (PMI) indicated a contraction in the US services sector for February, and the widely scrutinized University of Michigan Consumer Sentiment Index fell short of expectations, igniting fresh concerns among investors.

This week, attention in the financial markets is hyper-focused on Nvidia, with its quarterly earnings report for the 2025 fiscal year set to be released post-market on February 26. This will be Nvidia's first earnings report since the upheaval caused in the industry by the Chinese AI firm DeepSeekThe DeepSeek-R1 model, developed at a staggering cost of $5.6 million, is said to match the performance of ChatGPT, thereby challenging the market's perception of the AI computing power bubbleThe fallout from this revelation was immediate and severe for Nvidia, which saw its market capitalization plummet by $593 billion in a single day on January 28—a record loss for any US company on the stock exchange.

As fear and uncertainty began to wane somewhat, investors remain vigilant, specifically regarding two significant aspects of Nvidia's upcoming report: the tangible effects of export control policies on its data center business and whether the production timeline for the Blackwell chip can alleviate concerns surrounding potential technological bottlenecksAnalysts are projecting a 72% year-over-year revenue increase for the upcoming quarter, bringing it to approximately $38 billionHowever, they anticipate that growth rates may dip to a seven-quarter low, with gross margins potentially pressured by the complexities of chip system integration.

Interestingly, major clients such as Microsoft and Meta have expressed their commitment to sustain investments in AI infrastructure, counteracting some of the apprehensions circulating in the market

Advertisements

Coupled with the recovering demand for Hopper series orders, there is still a degree of resilience in expected short-term performanceNevertheless, the emergence of what can be termed a "low-cost AI" paradigm, spurred by DeepSeek, is in the process of redefining how the market values Nvidia's long-term growth potential.

As market analyst Lale Akoner from eToro succinctly puts it, “This undoubtedly stands as one of the focal points for the market this week; investors are very keen to discover whether news surrounding DeepSeek will disrupt the profit margins of companies in this domain in the future.” Currently, Nvidia shares have gained nearly 2% in pre-market trading, boosted by reports the company has secured more than 70% of TSMC's advanced packaging capacity for this year.

In other noteworthy pre-market developments, shares of Berkshire Hathaway were up by over 1%, following reports that the company's Q4 operating profit soared 71%, surpassing analysts' expectations thanks to a significant increase in insurance profitsFurthermore, Nike also experienced a rise of more than 2% as Jefferies upgraded its rating from "hold" to "buy."

Turning to corporate news, Apple Inc. announced on February 24 plans to invest over $500 billion in the United States over the next four years and create 20,000 new jobsThis initiative, touted as Apple's largest domestic investment plan to date, emphasizes advancements in artificial intelligence, chip engineering, and high-end manufacturingA crucial component of this strategy includes the establishment of a 250,000-square-foot server manufacturing plant in Houston, which is expected to go live in 2026. This facility will focus on producing core devices that support the Apple Intelligence ecosystem, thus generating thousands of technical jobsApple has also vowed to double the size of its Advanced Manufacturing Fund to $10 billion, allocating part of these resources towards the mass production of chips at TSMC's plant in Arizona, further solidifying the domestic supply chain's resilience.

Moreover, Apple intends to establish a manufacturing academy in Michigan to facilitate skill development by collaborating with small and medium-sized enterprises in AI applications and smart manufacturing training

Advertisements

This initiative aims to cultivate a new generation of skilled workers, with the company planning to add 20,000 research and development jobs, focusing on silicon engineering, AI algorithms, and software development to bolster its in-house chip design capabilities, which have recently made significant technical breakthroughs.

In parallel to these developments, Alibaba Group's CEO Wu Yongming announced on February 24 that the company will invest over 380 billion RMB in the next three years to build cloud and AI hardware infrastructure—an investment larger than its total expenditure in the previous decadeThis move signals a shift towards robust digital ecosystems and the increasing importance of AI and cloud computing in the business landscape.

In a project that may face delays, TSMC's second wafer fabrication plant in Kumamoto, Japan, is still on schedule to commence output in 2027. Despite the construction timeline possibly lagging behind initial projections, the Japanese subsidiary JASM is preparing to start building operations in 2025.

Meanwhile, GlaxoSmithKline announced the initiation of a £700 million stock buyback plan, with the first round of repurchases expected to commence on February 24 and complete by June 13. This reflects strategic moves to enhance shareholder value while bolstering market confidence in the company’s financial stability.

Lastly, Amgen's chairman and CEO Robert Bradway disclosed plans to invest $200 million in a new technology center in southern India, aimed at fostering advancements in AI and data science to support new drug developmentThis aligns with Amgen's ongoing strategy of leveraging innovative technologies to enhance operational efficiencies and expand its global footprint in the pharmaceutical industry.

Advertisements