Breakfast | Chinese concept stocks fell sharply, Alibaba down 10%, PDD down nearly 9%

Market Overview

The S&P and Nasdaq fell for three consecutive days, with the Nasdaq dropping over 1% and the Dow barely stopping its two-day decline; Nvidia fell over 3%, and Meta dropped over 2%; concerns over Microsoft's reduced data center spending hit Applied Digital, which plummeted 15%, while Schneider Electric fell nearly 7%; Buffett's Berkshire Hathaway rose 4% after its earnings report.

Chinese concept stocks significantly retreated, with the Chinese concept index closing down over 5%. GDS Holdings fell over 11%, Alibaba dropped 10%, and PDD fell nearly 9%.

After the election, German stocks halted their three-day decline, and German long-term bonds retreated. U.S. Treasury yields hit a two-week low.

The U.S. dollar index turned up after hitting a two-month low during the session; the offshore yuan briefly rose above 7.23, reaching a nearly three-month high, before giving back over 200 points of gains; Bitcoin briefly fell nearly $3,000, dropping below the 94,000 mark.

Increased demand for safe-haven assets and a weaker dollar supported gold prices, which reached new highs before the U.S. stock market opened. Investors are focused on the $3,000 mark, with gold prices rising over 12% year-to-date. Gold and oil rebounded, with gold hitting three new highs in four days, while U.S. oil moved away from its low for the year.

Chinese Concept Stocks Significantly Retreat, Chinese Concept Index Closes Down Over 5%, Alibaba Drops 10%, PDD Falls Nearly 9%

U.S. President Trump signed a memorandum on "America First Investment Policy" last Friday, restricting U.S. pension funds and endowment funds from investing in China's high-tech industries, including semiconductors, artificial intelligence (AI), advanced manufacturing, and biotechnology.

Alibaba announced plans to invest 380 billion yuan over the next three years, betting on cloud and AI infrastructure. This also marks the largest investment ever made by a private Chinese company in cloud and AI hardware infrastructure construction. Morgan Stanley admitted to underestimating Alibaba, stating that under the AGI target, Alibaba Cloud's revenue will double in three years, and in a base scenario, raised Alibaba's target price to $200, which could give a valuation of $140 billion!

Nvidia Earnings Preview

Nvidia's earnings report will be released this week Morgan Stanley: Not worried about Nvidia's performance, but guidance may be conservative. Morgan Stanley stated that in the past two months, demand for Nvidia's Hopper has increased, and the GB200 has also made progress, all pointing to a strong start to the year. However, potential export control policies will become the biggest uncertainty factor for the company's performance guidance, which may trend towards conservatism.

Reports indicate Nvidia has reserved over 70% of TSMC's advanced packaging capacity this year. Media reports indicate that demand for Nvidia's latest Blackwell architecture GPU chips is strong, having reserved over 70% of TSMC's CoWoS-L advanced packaging capacity this year, with shipments increasing by over 20% quarter-on-quarter.

Report: The Autonomous Driving Battle Escalates, Tesla's "Full Self-Driving Feature" is Coming to China

Reports indicate that Tesla plans to launch a feature similar to the "Full Self-Driving" (FSD) capability in the U.S. market in China. Tesla owners in China who have purchased FSD will soon be able to use this driver-assistance feature on city roads, but drivers will still need to maintain continuous supervision of the vehicle. Tesla's stock initially rose over 1% in early trading but later turned negative, dropping nearly 4%.

Once a "Tesla believer": Why do I think Tesla will drop over 50% this year? Early investor Ross Gerber's four bearish reasons include: obstacles to Tesla's full self-driving technology, Musk's distraction, slowing sales growth, and valuation risks.

Berkshire soars 4% to a new high after Buffett released the annual shareholder letter

Keefe, Bruyette & Woods analyst Meyer Shields maintained a market perform rating and raised the target price for Class A shares (BRK-A) from $750,000 to $775,000.

Berkshire's per-share operating earnings in the fourth quarter exceeded Wall Street expectations, benefiting from better-than-expected insurance underwriting and insurance revenue, Shields stated in a new investor report.

Analysts noted that the strong performance of the insurance sector, including the company's GEICO division, was enough to offset weaker-than-expected results in sectors such as railroads, utilities, and energy.

In the consumer goods sector, analysts pointed out that Jazwares' lower revenue offset growth in clothing, footwear, and Duracell brands.

Shields raised the 2025 earnings per share forecast based on higher insurance revenue.

Berkshire's stock has risen 21% over the past year, outperforming the 18.3% increase of the SPDR S&P 500 ETF Trust, which tracks the S&P 500 index.

Zelensky: Willing to resign as president for peace in Ukraine

As the Russia-Ukraine conflict marks its third anniversary, according to the Global Times, the possibility of Ukraine being forced to sign a "peace agreement ceding territory to Russia" is increasing, leaving Ukrainians confused not only about potentially "losing territory" but also losing all resources.

Putin: The output of rare earth products should be doubled, and he is willing to cooperate with partners, including the United States. On the 24th local time, Russian President Putin chaired a meeting on the development of the rare earth industry. He stated that developing the rare earth industry is a necessary condition for enhancing Russia's competitiveness in the international market and developing the most important economic sectors, and that the output of rare earth products should be doubled. Putin also pointed out that Russia has more rare earth reserves than Ukraine and is willing to cooperate with relevant partners, including cooperation with the United States.

Trump says tariffs on Canada and Mexico will proceed as planned

U.S. President Trump stated on Monday that the tariffs scheduled to be implemented next month on Canada and Mexico will proceed as planned and are "progressing rapidly." However, a U.S. official later anonymously indicated that the final decision on the tariff plan has not yet been determined At a press conference held jointly with French President Macron, Trump was asked whether tariffs would officially take effect on March 4. Trump clearly responded, "Tariffs will proceed on time and as planned."

Canada and Mexico have recently implemented new border control measures in an attempt to avoid the tariffs taking effect. Trump had previously stated that his aim in pushing for these tariffs was to curb illegal immigration and drug smuggling, particularly the cross-border influx of drugs like fentanyl