25.02.26 - One company, one call – the AI trade at a crossroads
Tonight, after the closing bell, Nvidia reports its Q4 earnings. Expectations are high – but more important than the numbers themselves will be the guidance and tone. This earnings call increasingly functions less like a quarterly update and more like a public stress test for the entire AI trade. Nvidia has become a proxy for the broader AI narrative.
Markets:
Equities: Followed yesterday’s rebound, with Tech leading. Nvidia up almost 2% ahead of results.
Bonds: US yields remain lower (US 10y ~4.04%).
Currencies: USD continued to weaken.
Commodities: Precious metals extended their rally – Gold ~USD 5’200/oz, Silver above USD 90/oz.
Cryptos: Rebounded markedly from oversold levels, Bitcoin back at USD 68k
Volatility: VIX fell below 19.
My View: This event is no longer just about Nvidia’s quarterly figures. It has become a key signal for the entire AI boom. The AI story took a breather in recent weeks as markets are currently pricing close to perfection. Any deviation from very high expectations could trigger outsized reactions.
The world’s largest tech companies are planning eye-popping capital expenditures for 2026, with hundreds of billions of dollars earmarked for AI infrastructure. This underpins the long-term demand narrative. However, the crucial question remains whether this massive investment wave will translate into sustainably higher margins and profits. Personally, doubts remain as to whether these billions can be earned back in the nearer term.
Based on past earnings calls, Jensen Huang will almost certainly present an optimistic narrative. Whether this will be “positive enough” to satisfy markets after the recent volatility is hard to predict. Headlines and analyst interpretations could easily push markets in either direction.
In such a headline-driven, binary setup, I avoid making directional bets ahead of this kind of pivotal event. This is not a moment for conviction trades, but a moment to observe investor behavior and draw insights for future investment decisions.
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