Nvidia drops more than 5%, dragging down the Nasdaq; Cook teases! Apple will start releasing new products gradually beginning next Monday

On Thursday, February 26, Eastern Time, U.S. stocks showed mixed performance, marking the start of a new rotation market. Nvidia’s earnings report led to a sharp drop of over 5%, dragging the Nasdaq down more than 1%. The Dow slightly rose, while small-cap stocks closed higher against the trend. Apple CEO Tim Cook confirmed that Apple will hold a new product launch event next Monday, and Google upgraded its popular image generation tool Nanobanana. The Iran-U.S. Geneva talks concluded with multiple parties stating that “progress is positive.”

【U.S. Stock Indices】

At the close, the S&P 500 fell 0.54% to 6,908.86; the Dow Jones rose 0.03% to 49,499.20; the Nasdaq dropped 1.18% to 22,878.38.

Nvidia announced again after yesterday’s market close that it delivered a comprehensive, better-than-expected and strong quarterly performance, but it still couldn’t escape the post-earnings plunge nightmare. According to Bespoke, this is the third consecutive time Nvidia has fallen after reporting earnings that beat expectations. This pattern of falling after strong earnings can be traced back to summer 2024. Since August 2024, regardless of earnings results, Nvidia’s stock has opened lower the next day.

Some analysts pointed out that Nvidia rarely makes mistakes on the earnings front, but the current market environment clearly raises questions beyond just how many chips the company sells.

Fundstrat’s chief economist Hardika Singh said Nvidia almost never misses on revenue, net profit, or guidance. However, the issue is that Nvidia has failed to ease investor concerns about its competitive moat narrowing, nor has it clearly articulated strategies to respond to the ongoing evolution of computing power and the AI revolution that could disrupt various industries from cybersecurity and food delivery to banking.

Other analysts noted, “The market is currently fighting widespread AI concerns. Investors are worried that since core customers—large cloud service providers—are draining most of their cash flow through AI-related capital expenditures, how Nvidia will sustain its incredible growth rate in the future.”

Additionally, “Big short seller” Michael Burry pointed out that Nvidia’s latest 10-K mentions irrevocable purchase commitments totaling $95.2 billion, up from $16.1 billion a year earlier, due to TSMC requiring longer-term contracts and prepayments. If demand wavers, this ballooning figure could pose risks.

Despite each decline, retail investors remain highly enthusiastic about this AI leader. Data from Vanda Research shows that while institutions have been selling heavily, retail net buying of Nvidia has hit a record high since 2012.

In geopolitical news, the third round of Iran-U.S. negotiations concluded, with Iran’s Foreign Minister saying good progress was made, but U.S. media reported disappointment during the talks. Conflicting news caused significant intra-day volatility in crude oil prices.

According to CCTV News, on February 26, local time, Iran’s Foreign Minister Amir Abdollahian stated that the third round of indirect negotiations with the U.S. was the most serious and longest-lasting. Good progress was made, and in some areas, both sides are close to reaching consensus. Technical negotiations will be held next Monday, March 2, in Vienna, Austria.

【U.S. Treasury Bonds】

U.S. Treasury yields declined, with the benchmark 10-year yield closing at 4.002%, and the 2-year yield sensitive to Fed policy at 3.475%.

【Popular U.S. Stocks】

Among popular stocks, Nvidia fell 5.46%, Apple declined 0.47%, Google A dropped 1.76%, Google C down 1.88%, Microsoft rose 0.28%, Amazon fell 1.29%, TSMC declined 2.80%, Meta increased 0.51%, Tesla dropped 2.11%, Super Micro Semiconductor fell 3.41%, and Intel declined 3.03%.

On the news front, Google announced the launch of its new image generation model Nano Banana 2 (Gemini 3.1 Flash image model).

Latest reports indicate that due to design difficulties, Meta abandoned its development of the most advanced AI training chips last week and shifted focus to a less complex version.

Apple CEO Tim Cook posted that next week will be lively, starting Monday night Beijing time. This signals an upcoming wave of new Apple products, with daily updates and new product announcements expected every evening.

【Global Indices】

In Europe, the FTSE 100 rose slightly by 0.37% to 10,847 points. France’s CAC 40 increased 0.72% to 8,621 points. Germany’s DAX gained 0.45% to 25,289 points.

In Asia, the Hang Seng Index fell 1.44% to 26,381 points. The China Enterprises Index dropped 2.44% to 8,814 points. Japan’s Nikkei 225 rose 0.29% to 58,753 points.

【China Indices】

On February 26, overnight, Hang Seng Tech Index futures fell 2.86%, Nasdaq China Golden Dragon Index declined 1.78%, and FTSE China A50 Index dropped 0.89%.

【Chinese Concept Stocks】

Popular Chinese stocks included Tencent Holdings (HK) down 2.01%, Alibaba down 2.78%, Pinduoduo down 1.41%, NetEase down 0.16%, Baidu down 5.65%, Ctrip down 2.59%, Li Auto down 2.98%, Xpeng Motors down 2.26%, and NIO down 1.73%.

【Forex and Commodities】

Amid tariff chaos and ongoing U.S.-Iran negotiations, the dollar remains strong. On Thursday, the dollar index softened during Asia-Pacific hours, then rose in U.S. trading near 98, but faced resistance and pulled back, ending up 0.09% at 97.791.

Traders closely monitor the uncertainty surrounding U.S.-Iran talks and tariffs for the next major move in international spot gold, which edged higher. Spot gold briefly broke above $5,200 but failed to hold that level, closing up 0.46% at $5,185.52 per ounce. Spot silver broke above $90 during the session, then fell back but recovered, ending up 0.84% at $88 per ounce.

Crude oil prices rose about 2 during the session, but after reports of positive progress in U.S.-Iran talks, prices turned lower. WTI crude rose slightly by 0.05% to $65.45 per barrel, while Brent crude gained 0.14% to $70.79 per barrel.

【Key Highlights】

Federal Reserve Governor Milan: Reiterates Need for 100 Basis Point Rate Cut by 2026, Warns Overregulation Distorting Credit Structure

Federal Reserve Governor Milan reiterated on Thursday that, despite improvements in the labor market, a 100 basis point rate cut is still expected by 2026, and he favors acting sooner. He pointed out that excessive regulation has increased bank lending costs, leading to a surge in private credit, but this does not yet pose systemic risks. Milan remains cautious about employment prospects and believes weak inflation pressures support a rate cut stance. He has repeatedly opposed holding rates steady and advocates for larger rate cuts.

Why Is Nvidia’s “Spectacular” Earnings Report Being Met with Cold Reception?

Nvidia has exceeded expectations for 14 consecutive quarters. When beating expectations becomes routine, strong performance alone is no longer enough. The market’s focus has shifted to concerns about the sustainability of AI demand and Nvidia’s supply constraints. Large long positions on the demand side have also faced criticism due to cross-shareholdings with clients. Although Nvidia’s data center business is growing strongly, other segments have underperformed.

Google Upgrades Its Popular Image Tool Nano Banana Pro with Enhanced Capabilities and Flash Speed, Launches Gemini and Search on Thursday

Nano Banana Pro will still be available for high-fidelity tasks requiring maximum factual accuracy; Nano Banana 2 focuses on “fast generation, precise instruction following, and image search integration,” supporting text-to-image, data visualization, in-image text translation, with up to 14 object detail restorations, and resolutions from 512 pixels to 4K. Regarding content provenance, Google states that since launching Gemini App in November last year, its SynthID verification feature has been used over 20 million times.

Meta’s Self-Developed Chips Reportedly Encounter Obstacles

Latest reports indicate that due to design difficulties, Meta abandoned its development of the most advanced AI training chips last week and shifted focus to a less complex version. The company informed its AI infrastructure team of the updated plans last week. This follows recent large-scale chip contracts with Nvidia and AMD. A Meta spokesperson said, “We remain committed to investing in a diversified chip portfolio to meet our needs, including advancing our MTIA product line; more updates will be disclosed later this year.”

Tesla’s California Autonomous Driving “Pie in the Sky”? Regulatory Records Show: Six Years of Zero Road Testing Miles

Tesla has made no substantial progress on its California Robotaxi service: the road testing miles have been zero for six consecutive years (only 562 miles), far below the 50,000 miles required for operational approval. Musk blames regulatory approval processes, but experts argue the reality is quite the opposite: the company has not even completed basic testing requirements, and the so-called “Robotaxi” in the Bay Area is actually a human-assisted driving service.

Netflix Withdraws from Warner Bros. Acquisition Deal

Warner Bros. Discovery announced after hours on Thursday that its board considers Paramount’s latest bid superior to Netflix’s. Netflix has four business days to revise its offer or withdraw, accepting a $2.8 billion termination fee funded by Paramount. Netflix quickly issued a statement saying that, given the need to match Paramount’s latest bid, the deal is no longer financially attractive, so they will not match the bid. Following this news, Netflix’s stock rose nearly 10% after hours.

Dell’s Earnings and Guidance Surpass Expectations; AI Server Revenue Expected to Double This Year, Stock Surges Over 12% After Hours

Dell Technologies reported record-high revenue, profit, and cash flow for Q4 and the full year, with AI-optimized server business as the core growth engine. The company expects FY2027 revenue to reach up to $142 billion, with AI server revenue doubling to about $50 billion year-over-year, significantly exceeding market expectations. This drove the stock to surge over 12% after hours.

Third Round of Iran-U.S. Negotiations Concludes, Iran’s Foreign Minister Says Good Progress; U.S. Media Report Disappointment

U.S. media report that the U.S. has made tough demands, with clear disagreements with the military. Iran’s Foreign Minister said that in some areas, both sides are close to reaching consensus, with technical talks scheduled for next Monday in Vienna. Oman’s Foreign Minister, acting as mediator, said the negotiations have “made significant progress.” Media reports indicate substantial differences remain: the U.S. insists Iran must dismantle all nuclear facilities and transfer all enriched uranium abroad; Iran proposes a temporary halt to nuclear activities within a limited timeframe, with subsequent activities to resume under a regulated framework. Iran’s spokesperson stated, “We will continue uranium enrichment as needed.”