THE ORACLE HAS SPOKEN. NOW WHAT?
THE ORACLE HAS SPOKEN. NOW WHAT?
February 26, 2026
$68.13 billion. Let that sit for a moment.
Nvidia just reported quarterly revenue that exceeds the annual GDP of a dozen sovereign nations. Data center alone — $62.3 billion, up 75% year over year — is a number so large it starts to lose meaning, the way very deep ocean trenches become abstract once you've passed a certain depth. The beat was clean. EPS came in at $1.62 adjusted versus the $1.53 Wall Street had penciled in. Vera Rubin samples shipped to customers this week. The machine is humming.
And the stock barely moved.
That's your tell. When a company prints what might be the most impressive single-quarter revenue figure in the history of the semiconductor industry and the after-hours reaction is a collective shrug — you're not watching a growth story anymore. You're watching a company that has become so important, so load-bearing to the entire structure of the global AI economy, that its earnings have stopped being events and started being weather reports. Expected. Processed. Filed.
The real story was always in the guidance, and the guidance delivered. But somewhere between the $700 billion in combined hyperscaler capex forecasted for 2026 and Nvidia's admission that memory constraints will bite gaming through the next fiscal year and beyond, the market is doing quiet arithmetic. How long can 70%+ revenue growth be the floor? What happens when the hyperscalers — who account for just over 50% of Nvidia's data center revenue — decide the buildout is complete enough?
Nobody knows. And that uncertainty, not the beats, is what's keeping this thing capped.
Meanwhile, the rest of the week has been a study in narrative whiplash.
PayPal surged 13% across two sessions on Bloomberg reports that Stripe is eyeing an acquisition. No confirmation. Stripe declined to comment. Doesn't matter — the market moved anyway, because PayPal has spent the better part of two years looking like a company in slow institutional hospice, and any whiff of a strategic exit becomes an oxygen mask. Whether a deal actually materializes is almost secondary. The premium speculation alone repriced the stock.
Salesforce was up 3% Wednesday, heading into its own earnings. Oracle got an Oppenheimer upgrade and climbed 2.5%, the firm making the bull case that Oracle is becoming a capital-intensive AI winner, a thesis the market has been slow to accept. Palantir ran 4.2%. Microsoft gained 3%. The software sector's bounce from its brutal February selloff is tentative but real — IGV up 3% on the day, volumes running at historically elevated levels. Tom Lee made the bottom call on software. Whether he's right or simply early, as is often the case with bottom calls, is a question for next week.
Diageo, almost lost in the noise, cut its dividend. Alcoholic beverages are quietly becoming a sector with a structural problem — demographic shifts, GLP-1 drugs eating into casual consumption, younger cohorts drinking less. Diageo is not a blip. It's a signal from a 200-year-old company that something durable has changed in consumption behavior. Staples sold off on the news.
The Macro Picture Nobody Wants to Frame
On the macro side: consumer confidence came in at 91.2, beating the 88.4 forecast. The Conference Board's number was better than expected. The 10-year Treasury is sitting at 4.05%. Neither of these will make headlines, but together they sketch a picture of an economy that remains, against all odds and tariff turbulence, stubbornly intact.
Trump's State of the Union was long — record-long, apparently — and short on new tariff escalation, which markets read as a reprieve. The new 10% global import duty implemented Tuesday is real and priced in; the fear was he'd use the address to stack more on top. He didn't. Markets exhaled. Wolfe Research noted the speech prioritized "golden age" framing over empathizing with the affordability concerns that are quietly festering in consumer sentiment data. Consumer confidence beats the forecast, yes — but 91.2 is not a confident number. It's a nervous number wearing a decent suit.
Cocoa futures are down nearly 50% in 2026. Coffee is off 19% since New Year's. If you're waiting for lower commodity prices to flow through to your morning coffee shop bill, I'd bring a book. The gap between futures and retail prices is one of the more persistent small frauds in consumer economics.
Tokyo's Uncomfortable Normalization
The Japanese yen weakened after reports that Prime Minister Takaichi had a conversation with BoJ Governor Ueda expressing concern about further rate hikes. The BoJ spent a decade being told its ultra-loose policy was distorting global capital flows. Now that it's finally attempting normalization, domestic political pressure is already pushing back. Rate hiking in Japan is apparently a fine idea in theory and an uncomfortable one in practice, particularly when the yen's strength threatens export earnings. The tension between the BoJ's institutional credibility and political expediency in Tokyo is one of the cleaner slow-motion stories in macro right now.
The Honest Framing
Here's where we are heading into the close of February:
The S&P 500 is at 6,946. The Nasdaq is up 1.26% on the week. Tech earnings have been strong — Nvidia proved the capex cycle is real, not fantasy. But the market has been more interested in Stripe-PayPal deal rumors and Anthropic's enterprise integrations than in Jensen Huang's $68 billion quarter. Software bounced but from deeply oversold levels. Breadth on Wednesday was actually negative — 1,415 NYSE decliners versus 1,157 advancers — even as the headline indices moved higher. That's the kind of detail that gets buried in the green close but tends to matter a few sessions later.
The AI trade is not over. The rotation argument — buy industrials, buy health care, reduce Mag Seven concentration — is legitimate but has been legitimate for 18 months without fully paying off. And the next data point that actually moves the needle isn't another earnings beat. It's January PPI on Friday. If core producer prices run hot, the rate cut timeline gets pushed again, and this entire sentiment recovery becomes something more fragile than it looks.
Stay skeptical. Stay long the infrastructure. Watch the yen.
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