February 25 Market Recap: Software Stocks Stage a Comeback; Nvidia Earnings Due Tonight
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February 25 Market Recap: Software Stocks Stage a Comeback; Nvidia Earnings Due Tonight
If Nvidia disappoints, safe-haven funds will flow back into gold.
Navigating Web3 tides with focused insightsAuthor: TechFlow
U.S. equities staged a dramatic “comeback” on Tuesday, February 24.
All three major indices closed higher:
- The Dow Jones Industrial Average rose nearly 400 points, or 0.8%, closing near 49,250.
- The S&P 500 gained 0.8%, closing near 6,890.
- The Nasdaq Composite rose 1%, closing near 22,860.
Software stocks led the rally—the same sector that had been pummeled by AI-related panic just one day earlier, only to stage a full recovery on Tuesday.
The turning point came from Anthropic’s latest product launch.
On Tuesday morning, Anthropic hosted an enterprise AI tools launch event, announcing deep integrations for its new Claude Cowork assistant with Salesforce’s Slack, Intuit, DocuSign, LegalZoom, FactSet, and Google Gmail. The key message: Anthropic emphasized that AI tools are “collaborators,” not “replacements.”
Markets instantly breathed a sigh of relief.
Salesforce surged 4% in a single day; DocuSign and LegalZoom each rose over 2%; Thomson Reuters soared more than 11%—its largest single-day gain since November 2008. Even IBM, which had plunged 13.4% on Monday, rebounded 3% on Tuesday.
Wedbush analysts stated bluntly in their Tuesday research note: “The AI panic in the software sector has been vastly overblown.” They argued that AI models cannot “tear apart and replace” software ecosystems already deeply embedded in enterprise infrastructure. “The value of these AI tools depends on the data they can access—and that data remains firmly under the control of incumbent software vendors.”
Yet this rally appears more like a technical rebound following oversold conditions—not a true trend reversal. The iShares U.S. Technology Software ETF (IGV) is still down over 27% year-to-date and trading at its lowest level since the end of 2023. Most software stocks remain down double digits; Tuesday’s green candles did not erase the damage inflicted by the “AI panic” since early February.
AMD: Overnight, from “Chaser” to “Core Player”
If the software sector’s rebound was about “stanching the bleeding,” AMD’s surge was pure “transfusion.”
On Tuesday, AMD jumped approximately 14%—surging over 15% premarket—and breached $220 per share, hitting its highest level since 2024.
The catalyst? A blockbuster order: Meta signed a multi-year, multi-generation architecture agreement with AMD, committing to deploy up to 6 gigawatts (GW) of AMD Instinct GPU compute capacity.
What does 6 GW mean? It equals the electricity consumption of roughly 6 million households. Wall Street analysts estimate the total contract value at $60–100 billion, to be delivered over five years.
Key terms of the agreement:
- The first 1 GW tranche will begin shipping in the second half of 2026, powered by AMD’s custom MI450-architecture GPUs and sixth-generation EPYC “Venice” processors.
- AMD issued Meta a performance-linked warrant enabling Meta to purchase up to 160 million shares of AMD common stock at an exercise price of $0.01 per share.
- The warrant vests in tranches: the first portion unlocks upon delivery of the initial 1 GW; full vesting occurs only after all 6 GW have shipped—and only if AMD’s share price hits specific thresholds, the highest being $600 per share (roughly triple its current price).
Wolfe Research analyst Chris Caso noted that the scale of this deal rivals AMD’s October 2024 agreement with OpenAI. Assuming revenue of $15–20 billion per GW, and adjusting for warrant dilution, AMD is expected to generate approximately $3 billion in profit per GW.
He stressed that Meta was already an existing AI customer of AMD—meaning most of the incremental impact will materialize in 2027 and beyond, delivering a “very significant” boost to AMD’s fundamentals.
Notably, just one week earlier, Meta had announced a “long-term partnership” with Nvidia, pledging increased use of Nvidia chips. Now it’s placing a $100-billion-plus order with AMD. Meta’s AI chip supply-chain strategy is crystal clear: diversification—to avoid lock-in with any single vendor. Meta’s CFO revealed on its earnings call that the company’s 2026 capital expenditures will reach $135 billion, with AI infrastructure representing the largest share.
This deal carries profound significance for AMD. With just ~9% market share in the AI chip segment—far behind Nvidia’s ~90%—securing a “hyperscaler” client like Meta solves AMD’s biggest pain point: large-scale software validation. Meta successfully migrated its Llama 4 and Llama 5 models onto AMD’s ROCm software stack—a critical milestone paving the way for other cloud giants like Microsoft and Google to follow suit.
Market forecasts project AMD’s share in the AI accelerator market will rise from 9% in 2025 to over 15% by the end of 2026.
Tonight’s Headliner: Nvidia Earnings—The Entire Market Holds Its Breath
If AMD was Tuesday’s surprise, Nvidia is Wednesday’s (tonight’s) suspense.
Nvidia will release its fiscal Q4 2026 results (ended January 25, 2026) at 5:20 a.m. Beijing time on February 26 (4:20 p.m. ET on February 25), followed by an earnings call at 5:00 p.m. ET (6:00 a.m. Beijing time).
Wall Street consensus estimates:
- Revenue of $65.56 billion, up 67% year-on-year;
- Adjusted EPS of $1.50–$1.53, up 72% year-on-year;
- Data center revenue of ~$58.7 billion (compute: $51 billion; networking: $9 billion);
- Gaming revenue of ~$4.3 billion; automotive revenue of ~$663 million.
Even more critical is guidance for fiscal Q1 2027: the market expects revenue of $72.4–$72.5 billion, up ~64% year-on-year.
Nvidia has exceeded revenue expectations for 13 consecutive quarters and EPS expectations for 12 straight quarters. Can the streak continue?
Market sentiment is mixed. On one hand, demand is robust: the four major cloud providers—Meta, Microsoft, Google, and Amazon—are projected to spend $65 billion on AI infrastructure in 2026, up 58% from $41 billion in 2025. Jensen Huang remarked on last quarter’s earnings call: “Compute demand continues to significantly outpace supply, driving cloud providers to accelerate investment in hopes of catching up someday.”
On the other hand, the market no longer settles for mere “beat-and-raise”—it now demands “beat-and-raise plus Jensen Huang’s beat-and-raise outlook.”
UBS analyst Timothy Arcuri pointed out that options markets imply expectations for fiscal Q1 (April quarter) revenue of $74–75 billion—not the consensus $72.4 billion. In other words, even if Nvidia delivers $72.4 billion in guidance, it may be interpreted as “conservative” and trigger a sell-off.
Options pricing suggests traders expect Nvidia’s stock to swing ±6% this week. But Jay Woods, Chief Market Strategist at Freedom Capital Markets, warned: “Even a perfect earnings report may yield only a ‘shift in market psychology’—not a purely numbers-driven reaction.”
D.A. Davidson analyst Gil Luria put it more bluntly: “Nvidia may no longer be the market’s bellwether.” Investor attention is shifting toward Google, Broadcom, memory chipmakers, and optical chip companies—and competition from custom chips like Google’s TPUs is intensifying. He believes Nvidia’s stock valuation “already prices in a peak in AI demand for 2026.”
Key watchpoints:
- Blackwell chip shipment volume and revenue contribution—$7.1 billion last quarter; how much this time?
- Orders from China—Beijing has suspended H200 orders, and Chinese customs reportedly blocked H200 imports;
- Customer diversification—beyond the big four cloud providers, are enterprise clients, sovereign AI projects, and vertical-industry demand growing?
- Gross margin sustainability at 73–74%—can rising HBM memory costs be locked in via long-term contracts?
Nvidia closed Monday up 0.91% at $191.55, within its 52-week range of $86.63–$212.19. Year-to-date, it’s slightly negative—but up 143% from its April 2025 low. Tonight’s earnings report will determine whether this AI boom is merely “halftime” or the “party’s over.”
Crypto Market: Bitcoin Breaks Below $63,000—On Track for Worst Month Since February 2022
While U.S. equities rallied, crypto markets continued to slump.
Bitcoin briefly fell below $62,858 on Tuesday, hitting a recent intraday low before struggling to hold near $63,000. Ethereum traded around $1,870; Solana dropped to ~$78.
As February draws to a close, Bitcoin’s monthly decline has already exceeded 25%, poised to become its worst single-month performance since June 2022—when the Luna collapse, Three Arrows Capital implosion, and Celsius bankruptcy triggered crypto’s “nuclear winter.”
Bloomberg data shows Bitcoin has lost over 50% from its October 2025 high of $126,198. Technical analysts warn that a break below the $60,000 threshold would open the door to the next support level at $52,500.
Market sentiment has plunged to rock bottom. The Fear & Greed Index remains stuck at 5 (“extreme fear”), and 24-hour liquidations surpassed $470 million—including $112 million in Bitcoin liquidations.
Capital flows tell an even grimmer story. On-chain data shows net U.S. demand for Bitcoin has been negative for 40 consecutive days—the last positive reading was January 15; a brief rebound on February 5 quickly reversed. This signals not a temporary pause, but a structural shortfall in U.S. demand.
Hedge funds continue exiting Bitcoin spot ETFs, while retail interest remains muted. The shadows of Wu Jihan’s Bitcoin liquidation and Vitalik Buterin’s ongoing ETH sales linger.
Linh Tran, Senior Market Analyst at XS.com, forecasts Bitcoin will trade sideways between $65,000 (support) and $70,000 (resistance) in the medium term—but sustained pressure could reignite tests of $60,000 or deeper losses.
For most crypto investors, February has been a disaster.
Gold: Risk-Off Retreat, Pulls Back from $5,240
After surging to a three-week high of $5,240 per ounce on Monday, gold retreated on Tuesday, closing near $5,160–$5,180—a daily drop of ~1.2%.
Two factors drove the pullback:
- U.S. equity rallies improved risk sentiment, reducing safe-haven demand;
- A modest strengthening of the U.S. dollar weighed on dollar-denominated gold.
Yet the correction was modest, indicating the safe-haven thesis hasn’t fully evaporated. Trump’s proposed 15% global tariff remains active (10% formally implemented Tuesday; the White House is preparing an executive order to raise it to 15%), U.S.-EU trade tensions remain unresolved, and Middle East tensions persist.
Silver declined in tandem, trading near $85–$86 per ounce.
Markets await tonight’s Nvidia earnings. If Nvidia beats expectations with strong guidance, risk appetite may further recover—pressuring gold. If Nvidia disappoints, safe-haven flows could return to gold.
Summary
Tuesday was an “interlude day”: software stocks stabilized after Anthropic’s reassuring messaging; AMD soared on Meta’s $100-billion order; and U.S. equities caught their breath amid a technical rebound.
But the real answers arrive tonight.
Nvidia’s earnings will set the tone for the AI boom: Is demand accelerating further, setting the stage for another explosive 2027—or peaking in 2026 and beginning to slow? Is Blackwell supply still desperately tight—or are China orders shifting?
The entire market holds its breath. Bitcoin clings to $63,000; gold retreats from $5,240 but remains close.
At 5:20 a.m. Beijing time tonight, Jensen Huang will deliver the verdict.
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