Author: Shenchao TechFlow

U.S. stocks staged a "comeback" on Tuesday (February 24).

The three major indices closed higher:

• The Dow Jones Industrial Average rose nearly 400 points, an increase of 0.8%, closing around 49,250 points.
• The S&P 500 rose 0.8%, closing around 6,890 points.
• The Nasdaq rose 1%, closing around 22,860 points.

Software stocks led the gains, the sector that was battered by AI panic on Monday suddenly made a full recovery on Tuesday.

The turning point came from Anthropic's latest press conference.

On Tuesday morning, Anthropic held a corporate AI tools release conference, announcing that Claude Cowork has introduced deep integration features with Salesforce's Slack, Intuit, DocuSign, LegalZoom, FactSet, and Google Gmail. The key information is: Anthropic emphasized that AI tools are "partners" rather than "replacements."

The market instantly breathed a sigh of relief.

Salesforce skyrocketed 4% in a single day, DocuSign and LegalZoom rose over 2%, Thomson Reuters jumped over 11% (the largest single-day gain since November 2008), and FactSet rose nearly 6%. Even IBM, which plummeted 13.4% on Monday, rebounded 3% on Tuesday.

Wedbush analysts bluntly stated in a report on Tuesday: "The AI panic in the software sector has been exaggerated." They believe that AI models cannot "tear and replace" the software ecosystems that are already deeply embedded in corporate infrastructures, "the value of these AI tools depends on the data they can access, and that data remains firmly in the hands of existing software."

However, this rebound is more like a technical recovery after a sharp decline rather than a trend reversal. The iShares U.S. Technology Software ETF (IGV) is still down over 27% year-to-date, at its lowest point since the end of 2023. Most software stocks are still in double-digit declines, and Tuesday's green did not erase the scars left by the "AI panic" since early February.

AMD: Overnight from "Follower" to "Core Player"

If the rebound in software stocks is a "band-aid," then AMD's surge is a "blood transfusion."

On Tuesday, AMD surged about 14%, rising more than 15% in pre-market trading, with its stock price surpassing $220, hitting a new high since 2024.

The catalyst was a remarkable order: Meta and AMD reached a multi-year, multi-generational collaborative agreement, and Meta will deploy up to 6 gigawatts (GW) of AMD Instinct GPU computing power.

What does this mean? 6 gigawatts is equivalent to the electricity consumption of 6 million households. According to Wall Street analysts' estimates, this order has a total value between $60 billion and $100 billion, delivered over 5 years.

According to the details of the agreement:

• The first batch of 1 GW orders will begin delivery in the second half of 2026, based on AMD's custom MI450 architecture GPU and the sixth-generation EPYC "Venice" processors;
• AMD issued a performance-linked warrant to Meta, allowing the purchase of up to 160 million shares of AMD common stock at an exercise price of $0.01 per share;
• The warrants unlock in batches: the first batch unlocks after the first batch of 1 GW is delivered, and the entire 6 GW is fully unlocked, which requires AMD's stock price to reach specific price thresholds, with the highest tier set at $600 per share (about three times the current stock price).

Wolfe analyst Chris Caso pointed out that the scale of this order is comparable to the agreement AMD signed with OpenAI last October; calculated at $15-20 billion in revenue per gigawatt, and after accounting for warrant dilution, each gigawatt is expected to generate about $3 billion in profit for AMD.

He emphasized that Meta was already an AI customer of AMD; therefore, most of the incremental benefits from this order will materialize in 2027 and beyond, providing a "very significant" boost to AMD's fundamentals.

It is noteworthy that Meta had just signed a "long-term partnership" with Nvidia a week prior, increasing the use of Nvidia chips. Now, it has placed a billion-dollar order with AMD. Meta's strategy in the AI chip supply chain is very clear: diversification to avoid being locked into a single supplier. Meta's CFO revealed during the earnings call that in 2026, Meta's capital expenditures would reach as high as $135 billion, with the largest share going to AI infrastructure.

This deal is highly significant for AMD. AMD holds about 9% of the AI chip market share, far behind Nvidia's 90%. However, by capturing Meta as a "hyperscaler" customer, AMD has addressed its biggest pain point: large-scale software validation. Meta successfully migrated its Llama 4 and Llama 5 models to AMD's ROCm software ecosystem, paving the way for other cloud giants like Microsoft and Google to follow suit.

Markets expect AMD's share of the AI accelerator market to grow from 9% in 2025 to over 15% by the end of 2026.

The Star of Tonight: Nvidia Earnings Report, the Whole Market Awaits with Bated Breath

If AMD was the surprise on Tuesday, then Nvidia is the suspense for Wednesday (tonight).

At 5:20 AM Beijing Time on February 26 (4:20 PM Eastern Time on February 25), Nvidia will announce its fourth quarter financial results for FY2026 (ending January 25, 2026). This will be followed by a conference call at 5 PM (6 AM Beijing Time).

The Wall Street consensus expectations are:

• Revenue of $65.56 billion, a year-over-year increase of 67%;
• Adjusted earnings per share (EPS) of $1.50-$1.53, a year-over-year increase of 72%;
• Data center business revenue of about $58.7 billion (with computing segment at $51 billion and networking segment at $9 billion);
• Gaming segment revenue of about $4.3 billion, automotive segment revenue of about $663 million.

More crucial is the guidance for Q1 FY2027: the market is expecting revenue of $72.4-$72.5 billion, a year-over-year increase of about 64%.

Nvidia has exceeded revenue expectations for 13 consecutive quarters and exceeded EPS expectations for 12 consecutive quarters. Will this mythology continue?

Market sentiment is complex. On the one hand, there are no issues on the demand side; the four major cloud giants—Meta, Microsoft, Google, and Amazon—are expected to spend $650 billion on AI infrastructure in 2026, an increase of 58% from $410 billion in 2025. Jensen Huang said in the last quarter's earnings call: "The demand for computing power continues to exceed supply significantly, prompting cloud giants to accelerate investments in an attempt to catch up with demand in the future."

But on the other hand, the market is no longer satisfied with just "exceeding expectations" but demands "exceeding expectations + guidance exceeding expectations + Jensen Huang's outlook exceeding expectations."

UBS analyst Timothy Arcuri pointed out that the market's implied expectation for Q1 FY2027 is revenues of $74-$75 billion, rather than the consensus of $72.4 billion. In other words, even if Nvidia provides guidance of $72.4 billion, it may be interpreted by the market as "conservative," leading to sell-offs.

Options market pricing shows traders expect Nvidia's stock price to experience a 6% fluctuation up or down this week. However, Freedom Capital Markets' chief market strategist Jay Woods warned: "Even if Nvidia's results are perfect, the stock price response may only reflect a 'shift in market psychology,' rather than being driven solely by numbers."

D.A. Davidson analyst Gil Luria bluntly stated: "Nvidia may no longer be the market's bellwether." Investors' attention is shifting towards Google, Broadcom, memory chips, and optical chip companies, as well as the increasingly significant competition from custom chips like Google TPU. He believes Nvidia’s stock price is implying a valuation that "is already pricing in a peak in AI demand for 2026."

Key points to watch:

1. The shipping volume and revenue contribution of Blackwell chips—last quarter was about $7.1 billion; how much can it reach this time?
2. Order status in the Chinese market—Beijing has paused H200 orders, and Chinese customs are reportedly blocking H200 imports;
3. Whether the customer structure is diversifying—, in addition to the four major cloud giants, is there growth in enterprise customers, sovereign AI projects, and vertical industry demand?
4. Can the gross margin remain at 73-74%—can the price be locked through long-term contracts despite rising HBM memory costs?

Nvidia's stock price closed up 0.91% on Monday to $191.55, with a 52-week range of $86.63-$212.19. It has slightly declined since the beginning of the year but has gained 143% since the low in April 2025. Tonight's earnings report will determine whether this wave of AI frenzy is a "halftime" or the "end of the party."

Cryptocurrency Market: Bitcoin Falls Below $63,000, February on Track for Worst Record

While U.S. stocks rebounded, the cryptocurrency market continued to decline.

Bitcoin fell below $62,858 on Tuesday, reaching a recent low during trading before ultimately struggling around $63,000. Ethereum was about $1,870, and Solana dropped to around $78.

As February comes to a close, Bitcoin's monthly decline has exceeded 25%, on track to record its worst monthly performance since June 2022. At that time, the market faced a series of collapses involving Luna, Three Arrows Capital, Celsius, and entered a "crypto winter."

Bloomberg data shows that Bitcoin has halved over 50% from its peak of $126,198 last October. Technical analysts warn that if it falls below the $60,000 mark, the next support level is at $52,500.

Market sentiment has plummeted to a freezing point. The fear and greed index remains at 5 (extreme fear), with over $470 million liquidated in the last 24 hours, including $112 million in Bitcoin liquidations.

Worse still are the capital flows. According to on-chain data, demand signals for Bitcoin from the U.S. market have been negative for 40 consecutive days—the last time this indicator turned positive was on January 15, and after a brief rebound on February 5, it turned negative again, indicating that the lack of U.S. demand is not a temporary pause but a structural absence.

Hedge funds continue to pull back from Bitcoin spot ETFs, and retail interest is low. The shadows of Wu Jihan liquidating Bitcoin and Vitalik continuously selling ETH linger.

XS.com senior market analyst Linh Tran predicts that Bitcoin will oscillate between the support level of $65,000 and the resistance level of $70,000 in the short term, but if current pressures persist, there is a risk of retesting $60,000 or even triggering deeper declines.

For most crypto investors, February has been a disaster.

Gold: Safe Haven Retreats, Falling from $5,240

After surging to a three-week high of $5,240 per ounce on Monday, gold retreated on Tuesday, closing around $5,160-$5,180, with a daily decline of about 1.2%.

The reasons for the correction are twofold:

1. The rebound in U.S. stocks and the recovery of risk sentiment have weakened safe-haven demand;
2. The U.S. dollar index strengthened slightly, applying pressure on dollar-denominated gold.

However, the magnitude of the correction is not large, suggesting that the safe-haven logic has not completely dissipated. Trump's 15% global tariff is still in effect (with a formal implementation of 10% on Tuesday, and the White House is preparing a formal order to raise it to 15%), and trade frictions between the EU and the U.S. remain unresolved, while tensions in the Middle East persist.

Silver also retreated, approximately around $85-$86 per ounce.

The market is waiting for tonight's Nvidia earnings report; if Nvidia exceeds expectations and guides strongly, risk appetite may further recover, putting pressure on gold; if Nvidia disappoints, safe-haven funds will return to gold.

Summary

Tuesday was a "interlude day," as software stocks temporarily halted their bleeding under Anthropic’s reassurance, AMD soared due to Meta’s billion-dollar order, and U.S. stocks took a breather in a technical rebound.

But the real answer will be revealed tonight.

Nvidia's earnings report will set the tone for the AI frenzy: is it "demand continues to accelerate, and it will explode in 2027," or "2026 peaks and begins to slow"? Is it that "Blackwell is in short supply," or "Chinese orders are changing"?

The entire market is holding its breath in anticipation. Bitcoin is barely supporting at $63,000, and gold has fallen from $5,240 but has not moved far.

At 5:20 AM Beijing Time tonight, Jensen Huang will provide the answers.