Breakfast | Tesla once dropped 10%, SMCI surged 24% after hours

Market Overview

Tech stocks dragged down U.S. stocks, with the Nasdaq falling over 1% and the S&P experiencing four consecutive declines; Walmart rose over 4%, supporting the Dow with two consecutive gains. The seven tech giants have entered a correction zone, with Nvidia's stock dropping nearly 3% ahead of its earnings report, and Tesla falling over 8%.

The China concept index rebounded nearly 0.6%, Alibaba rebounded nearly 4%, Li Auto surged 13%, and XPeng rose over 5%. The offshore yuan briefly rebounded over 200 points, breaking above 7.25.

After the release of U.S. consumer confidence data, the 10-year U.S. Treasury yield fell more than 10 basis points, reaching a new low for the year; the U.S. dollar index approached a two-month low.

Tesla Plummeted Over 10% at One Point

With a decline of over 25% this year, Tesla has become the worst-performing stock among the seven giants, with its market value shrinking nearly 40% from its peak after Trump's election victory.

Tesla's Full Self-Driving (FSD) officially entered China, marking the era of "equal rights in intelligent driving," with a price as high as 64,000 yuan. Tesla announced the launch of its city road Autopilot feature, igniting a full-scale war in China's smart driving competition. However, Tesla's customer service responded that this software update is different from the FSD feature in the U.S. and does not enable fully autonomous driving.

Demand for electric vehicles in Europe is booming, but Tesla has lost favor, with January sales nearly halved. Tesla is busy with the Model Y production line transformation, affecting deliveries. Meanwhile, Musk's controversial political stance may have harmed Tesla's brand image in Europe.

Nvidia Earnings Preview: Will It Burst the AI Bubble or Trigger a New Rally?

Market consensus expects Nvidia's fourth-quarter revenue to be $42 billion, with revenue growth rate significantly slowing to 73%. At the same time, Nvidia's customers have raised their spending expectations on AI, anticipating continued growth in AI revenue.

Short sellers believe Nvidia faces the "curse of high expectations" and cost-cutting pressures from DeepSeek, suggesting the AI bubble may burst; bulls argue that strong demand means the likelihood of Nvidia's stock rising is greater than falling after recent stagnation. Additionally, intensified AI competition may benefit Nvidia.

Morgan Stanley believes that if Nvidia's revenue exceeds expectations, Asian AI stocks could see price increases of 3-15%; conversely, it could lead to a 5-10% decline.

Morgan Stanley: Generative AI could achieve positive returns this year, with revenue expected to exceed $1 trillion by 2028. Morgan Stanley stated that 2025 may see the ROI tipping point, with a 34% gross margin marking the industry crossing the breakeven line; by 2028, total revenue from generative AI is expected to approach $1.1 trillion, with the return rate likely increasing to about 67%, benefiting several tech giants like Amazon and Meta from the AI wave.

U.S. Tech Giants Enter Technical Correction Zone, Market Value Cumulatively Evaporates $1.4 Trillion

On Tuesday, U.S. tech stocks plummeted, with all seven giants suffering losses, and Tesla briefly fell over 10%, with its market value dipping below $1 trillion Data shows that as of the end of February, the "Magnificent 7" index tracked by Bloomberg has fallen more than 10% since its peak in December last year, entering a technical correction zone, with a total market value loss of $1.4 trillion for the seven companies.

In 2025, the performance of the U.S. stock market has significantly lagged behind other global markets. So far in 2025, the S&P 500 index has risen by less than 2%, while the technology giants' stock index has dropped by 3.3%. In contrast, the MSCI global index, excluding the U.S., has risen by 7%. Investors are beginning to question whether high valuations and massive artificial intelligence spending can continue to drive these tech stocks higher.

U.S. Stock Market Sentiment Changes Dramatically! Optimism Fades, Uncertainty Rises

Recently, the investment atmosphere on Wall Street is changing. The momentum that once drove market optimism after Trump's election has clearly faded, replaced by concerns over the uncertainty of the U.S. economic outlook.

Since the beginning of 2025, signs of a shift in market sentiment have gradually emerged, with investors witnessing the most obvious signals on Tuesday. The S&P 500 index has fallen for the fourth consecutive trading day, marking the longest losing streak since January 2. FactSet data shows that some popular tech stocks, such as Palantir Technologies (PLTR.US), have seen particularly significant declines, sparking further discussions in the market about whether high valuations are exacerbating investor anxiety.

Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, noted in a recent report that the "atmosphere" in the market is weakening. Callie Cox, chief market strategist at Ritholtz Wealth Management, stated in an interview, "Market sentiment is declining, and there are many reasonable reasons behind it."

Bitcoin Falls Below $90,000

Since Trump officially took office as President of the United States, the price of Bitcoin has fallen nearly 20%, with market sentiment plummeting from the "cryptocurrency investment frenzy" following Trump's victory in the presidential election.

Key triggers for the sell-off include the largest-ever hacking attack on the Bybit exchange in cryptocurrency history, as well as the meme coin scandal involving Argentine President Javier Milei.

SMCI Soars 24% After Hours

If Super Micro Computer fails to submit its financial results to the SEC by the February 25 deadline, its stock on the Nasdaq may face delisting risks. SMCI shares surged significantly after the company submitted its financial statements before the deadline.

Super Micro Computer's auditor, BDO, wrote in the documents: "In our view, the consolidated financial statements fairly present the company's financial position as of June 30, 2024, in all material respects." Super Micro Computer submitted an updated audited financial report to the SEC, covering the fiscal year 2024 ending last June and the first two quarters of the company's current fiscal year 2025