Nvidia secures multibillion-dollar Meta deal

General market commentary

U.S. equity markets edged higher on Tuesday, reversing early losses as financials and real estate led the session. The S&P 500 financials index rose 1.2%, boosted by gains in major banks including Goldman Sachs and JPMorgan Chase, while technology and industrials posted more modest advances. Software stocks continued to face pressure amid concerns that AI developments could disrupt existing business models, with CrowdStrike, Adobe, and Salesforce all declining. The broader S&P 500 ended slightly higher, supported by value-oriented sectors such as energy, materials, and consumer staples, which have outperformed in 2026. Trading remained cautious ahead of key economic releases, including the U.S. personal consumption expenditure report, the Fed’s preferred inflation gauge, which could influence interest rate expectations.

Earnings season is winding down, with more than 75% of S&P 500 companies having reported fourth-quarter results, showing broad-based growth led by technology, industrials, and communication services. Despite strong earnings, heavyweight tech stocks like Microsoft, Apple, and Nvidia showed mixed performance amid AI-related uncertainty. Market activity was subdued, with declining issues outnumbering advancers and the S&P 500 posting only a handful of new 52-week highs. Commodities were weaker, with oil down nearly 1% and gold falling almost 3%, while the U.S. dollar stabilised, contributing to cautious investor sentiment. Activist-driven stock moves were notable, including gains in Norwegian Cruise Line, Fiserv, and Masimo amid takeover and acquisition news.

Latest market and economic update

Asian stocks rose Wednesday, led by a rebound in Japanese technology shares, with the Nikkei 225 up 1.1%. Trading was muted as several markets closed for Lunar New Year. Australia edged higher despite mixed earnings, while India was flat amid software weakness. Investors await Federal Reserve minutes and US inflation data.

US stock index futures fell slightly overnight, with S&P 500 futures down 0.1% and Nasdaq 100 futures off 0.2%, as technology gains remained fragile. Nvidia and Meta pared after-hours gains, while AMD trimmed losses. Investors remained cautious ahead of Federal Reserve minutes and key economic data, amid persistent AI-related sector uncertainty and geopolitical developments.

European markets rose on Tuesday, with the STOXX 50 up 0.7% and the STOXX 600 gaining 0.5%, hovering near record highs. Financials and insurers led advances, as UniCredit, BNP Paribas and AXA posted solid gains. Automakers and luxury groups including LVMH, Mercedes-Benz and BMW climbed on tariff optimism and strong China demand, while Bayer jumped on settlement news.

The US dollar held firm on Wednesday as geopolitical tensions and caution before the Federal Reserve’s January minutes supported demand. The dollar index steadied at 97.16 after a two-day rise. Against the Euro, the greenback strengthened slightly, with the single currency slipping 0.06% to $1.1846 amid cautious sentiment.

Oil prices were little changed in Asian trade after sharp losses, as progress in US-Iran nuclear talks eased supply disruption fears. Brent and WTI edged slightly higher following Tuesday’s declines. Investors await US inventory data and Federal Reserve minutes, while upcoming PCE inflation figures are expected to guide interest rate and fuel demand outlook.

Japan’s exports surged 16.8% year-on-year in January, the strongest rise since November 2022, driven by robust Asian demand and Lunar New Year-related shipments to China. However, imports fell and a trade deficit remained. Economists warn the spike may be temporary, with export momentum fragile despite easing tariff impacts and expected support from domestic consumption.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Nvidia and Meta announced a multiyear partnership to expand Meta’s AI infrastructure, deploying millions of Nvidia GPUs, Grace-only and Vera CPUs, and Spectrum-X switches. The collaboration will support hyperscale AI data centres, enhance privacy-focused AI for WhatsApp, and marks the first large-scale deployment of Nvidia’s advanced CPUs, boosting efficiency across Meta’s systems.

Apple Inc. is accelerating development of three AI focused wearables including smart glasses, a pendant and upgraded AirPods, as it shifts towards artificial intelligence powered hardware in competition with OpenAI and Meta Platforms Inc.. The devices will integrate Siri, use visual context, connect to iPhones and feature cameras with varying capabilities.

Palo Alto Networks cut its 2026 profit forecast to $3.65–$3.70 per share due to rising costs from CyberArk, Chronosphere, and Israeli startup Koi, whose technology will integrate into Prisma AIRS and Cortex XDR to enhance AI-driven threat protection. Revenue guidance rose to $11.28–$11.31 billion, with Q2 revenue at $2.59 billion and EPS $1.03.

Tripadvisor said it has held multiple discussions with activist investor Starboard Value, which owns about 9% and plans to nominate a majority slate of directors in 2026, criticising performance and strategy. The fund urged a full sale and faster reviews of TheFork and Viator, while Tripadvisor reaffirmed its focus on long-term shareholder value.

Fiserv is facing pressure from activist investor Jana Partners, which has acquired a stake and is pushing for strategic changes. Jana supports CEO Mike Lyons’ efforts to improve execution and refresh the board, following last year’s challenges from slowing merchant-solutions growth, increased competition, and a major market value reset.

Bayer is preparing a $10.5 billion settlement initiative to resolve both current and future U.S. lawsuits over its Roundup weedkiller, including $7.5 billion for class-action cases in Missouri and $3 billion for existing claims alleging non-Hodgkin’s lymphoma. The company previously paid around $10 billion but had not covered future cases.

eToro beat fourth-quarter profit estimates, posting adjusted earnings of 71 cents per share versus the 63-cent consensus, supported by strength across equities, crypto, and AI-linked assets. Assets under administration grew 11% to $18.5 billion, though net contribution fell 10% to $227 million, reflecting crypto volatility and margin interest costs.

Warner Bros Discovery rejected Paramount Skydance’s $30-a-share hostile bid but invited a “best and final” offer, while maintaining its preferred deal with Netflix for HBO Max and the Harry Potter franchise. Paramount may raise its bid, supported by Larry Ellison, but financing and shareholder approval remain uncertain. Warner Bros’ Netflix merger vote is set for March 20.

Sandisk shares fell 2.0% in after-hours trading after Western Digital announced plans to sell around $3.1 billion of its Sandisk holdings through a secondary public offering. Sandisk clarified that it is not selling any shares itself and will not receive proceeds from the transaction, which involves stock currently owned by its former parent company.

Apple Inc.’s recent share-price decline is deemed “unwarranted” by Wedbush, which says investor concerns over AI rollout delays are overstated. Analyst Dan Ives highlighted that Siri AI features remain on track for 2026, with potential monetisation adding $75–$100 per share, supported by Apple’s vast iOS and iPhone installed base.

Berkshire Hathaway reentered the newspaper sector, buying 5.07 million New York Times shares worth $352 million, lifting after-hours prices 4%. The filing also showed partial sales of Apple and Amazon stakes. Following Warren Buffett’s retirement, CEO Greg Abel oversees investments. The company added Chevron and Chubb holdings while trimming Aon and Bank of America.

Nvidia was recommended as a Buy by Citi ahead of expected outperformance in the second half of 2026. Analyst Atif Malik highlighted strong product momentum, AI-driven demand extending into 2027, robust revenue growth, and leadership in inference workloads, with fiscal 2027 gross margins projected around 75% and continued cloud-revenue acceleration.

Allianz SE was initiated with a “sector perform” rating by RBC Capital Markets and a €405 price target, implying 15% total return. Allianz is considered appropriately valued, with solid EPS growth, rising dividends, and share buybacks, while AI presents both cost-saving opportunities and distribution risks amid moderating tailwinds.

AXA SA was initiated with an “outperform” rating by RBC Capital Markets and a €48 price target. Analyst Mandeep Jagpal highlighted AXA’s decade of structural improvements, strong solvency, high dividend yield, Life & Health growth, and cost efficiencies, while noting potential risks from reinsurance pricing, Life CSM growth, and FX volatility.

ConocoPhillips was downgraded to Neutral by Roth Capital Partners over valuation concerns and expectations that global oil prices may have peaked. Despite strong operations, low supply costs, and resilient cash flow, rising inventories and OPEC+ output could pressure prices in early 2026, with much growth already reflected in current shares.

Shopify was upgraded to Buy by Truist Securities, with a price target of $150, citing attractive long-term entry amid AI-driven software selloffs. Analyst Terry Tillman highlighted Shopify’s accelerating growth, scalable platform, strong payments ecosystem, international expansion, and potential in agentic commerce, supporting sustained profitable growth through 2027.

Upcoming data and events

Wednesday features key economic data including UK inflation, US housing starts, building permits, durable goods orders, industrial production and the FOMC minutes, alongside a 20 year bond auction. Earnings are due from Analog Devices, Inc., Booking Holdings Inc., BAE Systems plc, Glencore plc and Moody's Corporation.

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