Vi e w p o i n t | 22 Feb 2026 19:47:10 ET │ 10 pages China Economics Beyond IEEPA Ruling: US President's China Visit Takes Center-Stage CITI'S TAKE The IEEPA ruling could lower the effective US tariff rate on China by -5ppts to ~26%, assuming the new Section 122 tariff at 15%. However, we see no fundamental shift in US tariff policy towards China, as the administration has already begun rebuilding tariffs through alternative authority. We believe Beijing is unlikely to escalate if tariffs remain at or belo ...

Nvidia’s stock has become a market object. It’s big enough to tug the major indexes, with a 7.8% weight in the S&P 500. When it moves, it drags money and sentiment with it, which helps explain why people talk about its quarterly reports as if they’re a major weather event.The company can clear consensus and still disappoint a crowd that paid for a bigger and louder fireworks show. Meet the expectations treadmill: A good quarter gets a shrug. A great quarter gets a shrug. Now, the market’s daring Nvidia to d ...

Core Insights - The upcoming earnings report from Nvidia is anticipated to provide significant insights into the company's plans for 2026 [1][2] Group 1: Earnings Report Expectations - Nvidia will report its fiscal fourth-quarter and full-year earnings after the market closes on February 25, which is a major event for investors [2] - The earnings report is viewed as a barometer for the entire AI market, with a focus on data center revenue and AI demand [3] Group 2: Data Center Revenue and AI Demand - Nvidia guided for $65 billion in total revenue for the fourth quarter, making it a key figure for investors to monitor [5] - The data center division is the primary revenue source, supplying GPUs and servers essential for AI model operations [6] - Investors will assess demand for Nvidia's powerful GPUs, particularly the Blackwell model, and the effectiveness of new technologies in training AI models [7] - Nvidia's CFO indicated a $500 billion opportunity for Blackwell and the upcoming Rubin GPU model by the end of 2026, which investors will be keen to validate [7] Group 3: Pricing Power - Pricing power is crucial as it reflects Nvidia's competitive position in the chip and AI hardware market, where it has historically maintained high margins [8] - Concerns exist regarding competition from hyperscalers designing their own chips, which could impact Nvidia's market dominance [8] Group 4: Operations in China - Investors are looking for updates on Nvidia's operations in China, particularly after U.S. government restrictions limited sales of older chips [12] - CEO Jensen Huang has been lobbying for improved access, and a potential deal with the Trump administration could allow sales of H200 chips in China [13] - The Chinese market was projected to be a $50 billion annual opportunity, with potential growth of 50% per year, but Nvidia is not factoring in any revenue from China in its fiscal 2026 guidance [15]

Key Takeaways NVIDIA is set to report fiscal Q4 2026 earnings with revenues seen near $65B and EPS at $1.52. NVDA shares have shown unpredictable moves after earnings in recent quarters.NVIDIA's AI chip demand, data center growth and China H200 shipments support long-term upside.NVIDIA Corporation (NVDA) is all set to report its much-awaited fiscal 2026 fourth-quarter (ended Jan. 25) earnings after the closing bell on Feb. 25. With rising artificial intelligence (AI)-driven bubble concerns, this report coul ...

Core Viewpoint - Nvidia's upcoming earnings report is highly anticipated, with significant focus on its performance in the AI sector and the impact of tariffs on its products [2][4][12]. Group 1: Earnings Expectations - Nvidia is expected to provide insights on its robust performance and future outlook, particularly regarding its AI-related business [3][6]. - The company has a substantial backlog of $500 billion, indicating strong demand and potential upside from orders, especially from China [6][5]. Group 2: Tariff Implications - Nvidia has been affected by a 25% tariff on its H200 chips, which has limited its production capacity to 400,000 units [4][5]. - The market is keen to hear from CEO Jensen Wang about the potential removal of these tariffs and how it may influence future operations [5][7]. Group 3: Market Reactions and Valuation - There is a belief that cash flow can alleviate valuation concerns, and the current tariff situation may open new sales opportunities for Nvidia [8][9]. - Nvidia's stock has remained stagnant over the past six months, and upcoming guidance may influence market sentiment and stock performance [12][11]. Group 4: Trading Strategies - Options trading strategies are being discussed, with a focus on structuring trades to mitigate volatility ahead of the earnings report [15][16]. - A bullish trade is suggested, with a potential cap at the $200 level by the end of next week, indicating cautious optimism about Nvidia's stock performance [17].

Core Insights - The Trump administration is open to allowing China's ByteDance to purchase Nvidia's H200 chips, indicating a potential shift in U.S.-China tech relations [1] - Nvidia, the AI chipmaker, has not yet agreed to the proposed conditions set by the administration for the use of these chips, suggesting ongoing negotiations and complexities in the deal [1] Company Summary - ByteDance is positioned to potentially acquire advanced AI technology through Nvidia's H200 chips, which could enhance its capabilities in the competitive tech landscape [1] - Nvidia's reluctance to accept the proposed conditions may impact its strategic partnerships and market positioning, highlighting the challenges faced by companies in navigating regulatory environments [1]

Core Insights - Nvidia stock has experienced significant gains over the past five years, but recent price action has been relatively subdued, with a long-term uptrend expected due to positive industry developments [1] Company Developments - China has approved the import of H200 chips, Nvidia's second most powerful AI chip, with major companies like ByteDance, Alibaba, and Tencent receiving approval to purchase over 400,000 units [2] - Nvidia's growth is supported by innovation, holding 8,700 granted and pending patents globally, and it identifies a $1 trillion available market opportunity [5] Financial Performance - For the third quarter of fiscal 2026, Nvidia reported revenue of $57 billion, reflecting a 62% year-over-year increase, with a GAAP gross margin of 73.4% [5] - In the last six months, NVDA stock has trended higher by about 8%, with strong earnings growth expectations and impending exports to China contributing to a positive outlook [6] Market Potential - Nvidia's re-entry into the Chinese market is a key growth catalyst, with expectations of $3 trillion to $4 trillion in annual AI infrastructure build, ensuring sustained growth momentum [8]

Earnings Reports - Microsoft (MSFT), Meta (META), and Tesla (TSLA) are scheduled to report earnings after the market closes today, with market expectations being closely monitored [6] - Companies reporting today also include AT&T (T) and IBM (IBM) [16] Federal Reserve Insights - The Federal Open Market Committee (FOMC) is expected to maintain its benchmark rate at 3.50%-3.75% after three consecutive rate cuts, with the timing of any future cuts being a key focus [7] - Most FOMC members are not in a hurry to ease policy further, as the labor market shows signs of softening but is not raising urgent alarms, and inflation remains above the 2% target without signs of a dramatic resurgence [8] - There is a disconnect between the FOMC's projected rate path for 2026 and market expectations, with the FOMC indicating only a single rate cut in 2026, while markets anticipate two cuts this year [8] Corporate Developments - SoftBank (SFTBY) is considering an additional investment of $30 billion in OpenAI (OPENAI) [9] - SpaceX (SPACE) is targeting a mid-June IPO with a potential valuation of $1.5 trillion [9] - UnitedHealth (UNH) has indicated potential benefit cuts due to disappointing Medicare rates [10] - UPS (UPS) plans to cut 30,000 jobs as it ends its partnership with Amazon [11] - Amazon (AMZN) is set to close its Go and Fresh stores while expanding its Whole Foods operations [12] - Boeing (BA) aims for 500 deliveries of its 737 aircraft as its inventory nears exhaustion [13] - Archer-Daniels-Midland (ADM) will pay $40 million to settle SEC claims regarding performance inflation [14] - Tether, the issuer of the USDT-USD stablecoin, has emerged as a significant beneficiary of the recent gold rally [15]

Group 1 - Nvidia is navigating complex trade negotiations with the U.S. while selling chips to Chinese companies, with a focus on China's ambition to develop its own AI chips [1] - An exclusive report indicates that Nvidia has secured approvals for sales of over 400,000 H200 chips to major Chinese firms like ByteDance, Alibaba, and Tencent, although the conditions of these sales remain unclear [2] - Nvidia's CEO highlights China as a $50 billion opportunity, which is not included in the company's revenue forecasts, with the expected revenue for the current quarter projected at $65 billion, plus or minus 2% [3] Group 2 - Nvidia's market capitalization stands at $4.6 trillion, significantly surpassing traditional leaders like Alphabet, Microsoft, Apple, and Amazon, driven by investor enthusiasm for its future prospects in China [4] - The company has reported a substantial backlog for Blackwell chips, with investments in data centers for AI reaching hundreds of billions last year, potentially approaching a trillion dollars annually, predominantly utilizing Nvidia chips [5] - Despite skepticism regarding Nvidia's future, the stock has surged 1,351% over the past five years, with investors confident in the AI sector's potential, viewing it as a pivotal technology [6]

Core Insights - Nvidia's strategic partnership with Siemens aims to develop industrial and physical AI solutions, enhancing AI-driven innovation in industrial workflows [1] - Strong earnings reports from ASML and SK Hynix have positively impacted chip stocks, with Nvidia's shares also experiencing a rise [2][4] - China has approved major domestic tech companies to purchase Nvidia's H200 chips, marking a significant development in Nvidia's market position in China [3] Group 1: Nvidia's Market Position - The approval for ByteDance, Alibaba, and Tencent to buy Nvidia's H200 system is crucial for Nvidia's operations in China, a key market [3] - Earlier this year, the U.S. authorized H200 sales, but China had been encouraging its companies to seek domestic alternatives [3] Group 2: Industry Performance - The VanEck Semiconductor ETF increased by over 3% in premarket trading, reflecting positive sentiment in the semiconductor sector [2] - ASML reported strong fourth-quarter earnings with orders exceeding analyst expectations, and its 2026 sales forecast was also above estimates [2] - SK Hynix shares rose more than 5% after announcing record full-year profits for 2025 [2]