Finance
Morning Bid: Nvidia results offer window into AI spending
Published by Global Banking & Finance Review®
Posted on February 26, 2025
3 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 26, 2025
3 min readLast updated: January 25, 2026
Nvidia's earnings shed light on AI spending trends amid US-China tech tensions and market dynamics, with investors eyeing interest rate cuts.
A look at the day ahead in European and global markets from Rae Wee
Quarterly earnings from AI darling Nvidia is Wednesday's marquee event for markets, with much riding on the chipmaker to deliver results that could placate investors who are questioning hefty spending in artificial intelligence.
Investors have begun second-guessing U.S. tech giants since Chinese startup DeepSeek rattled the industry with AI technology ostensibly cheaper yet as capable as that of early leaders.
Market estimates have Nvidia's fourth-quarter sales at $38.5 billion and first-quarter guidance around $42.5 billion.
As usual, options point to a share price move of around 8% in either direction should the results surprise.
"This earnings report isn't just about Nvidia... It's about whether the AI revolution can maintain its breakneck pace," said Saxo's global head of investment strategy, Jacob Falkencrone.
Alleviating concern of DeepSeek triggering a slide in AI chip demand, sources have told Reuters of Chinese companies increasing orders for Nvidia's H20 chip due to booming demand for low-cost AI models.
DeepSeek itself is accelerating the launch of the successor to the R1 model that put the startup on the map last month, three people familiar with the company told Reuters.
R2 is likely to worry the U.S. government which regards AI leadership as a national priority.
That country's technology war with China is set to intensify with the administration of President Donald Trump planning tougher restrictions on semiconductor exports to China.
Trump has already signed a memorandum restricting Chinese investment in the U.S. in strategic areas.
Over in China, a government official on Wednesday said Taiwan sought to give the island's semiconductor industry to the U.S. as a "souvenir" for use as leverage when seeking support from Washington.
Still, investors seemed to have brushed off escalating tension for now. The share prices of Hong Kong-listed companies jumped 2.5% on Wednesday with technology stocks surging 3.7%, having declined in the previous session.
Shares in mainland China similarly rose. [.SS]
Elsewhere, U.S. Treasury yields rebounded from their weakest level in months after the Republican-controlled U.S. House of Representatives advanced Trump's $4.5 trillion tax-cut plan, giving his 2025 priorities a major boost.
A darkening economic outlook continued to linger in investor minds as they increased bets of more interest rate cuts this year from the Federal Reserve.
Fed funds futures point to more than 50 basis points worth of easing priced in by year-end, up from about 40 bps a week ago. That in turn undermined the dollar on Wednesday.
Key developments that could influence markets on Wednesday:
* Nvidia earnings * Federal Reserve's Tom Barkin, Raphael Bostic speak(By Rae Wee; Editing by Christopher Cushing)
Market estimates have Nvidia's fourth-quarter sales at $38.5 billion.
Investors have begun second-guessing U.S. tech giants since DeepSeek introduced AI technology that is cheaper yet as capable as that of early leaders.
The U.S. government's technology war with China is intensifying, with plans for tougher restrictions on semiconductor exports, which could affect Nvidia's sales.
Fed funds futures indicate more than 50 basis points worth of easing priced in by year-end, which has undermined the dollar.
Despite escalating tensions, investors seemed to have brushed off concerns for now, with Hong Kong-listed companies' share prices jumping 2.5%.
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