The Weight of One Chip
The Weight of One Chip
Everything is riding on a company that sells sand. Welcome to 2026.
The Supreme Court struck down the tariffs. Trump announced new ones. Gold hit $5,200. Bitcoin slipped below $63,000. Software stocks bled out in what Wall Street is already calling the "SaaSpocalypse." And somewhere in Santa Clara, a man in a leather jacket is sitting on numbers that will either justify or incinerate the most expensive capital expenditure binge in corporate history.
This is February 25, 2026. And somehow, we've built a global economy that pivots on an earnings call.
Let's be honest about what the next few hours represent. We are not waiting for a quarterly report from a chip company. We are waiting for a verdict on whether $650 billion in hyperscaler capex — Meta's $135 billion, Alphabet's $180 billion, Amazon's $200 billion — was genius or collective hysteria. NVDA's Q4 print, expected around $65.7 billion in revenue, up 67% year over year, is no longer a company milestone. It's a bellwether for the entire AI cycle. The most anticipated earnings event on earth, not because the numbers are in doubt, but because the story is.
And oh, what a story has been unraveling around it.
Monday Was a Massacre
The S&P 500 shed 1.04%, the VIX jumped 10% to 21, and the Nasdaq posted 264 new 52-week lows. Financials cratered — XLF dropped 3.3%, its steepest single-day decline of the year — not from bad earnings, but from the cold sweat of legislative risk. The Credit Card Competition Act and a federal interest rate cap are circling the sector like creditors at a bankruptcy auction. AXP fell more than 7% as credit card issuers buckled under concerns that a softening equity market might curb spending among higher-income consumers.
Tuesday bounced. AMD surged roughly 8% on news of a multiyear partnership with Meta — a partnership that is, in reality, a $100 billion-plus order for custom AI infrastructure and one of the most stunning supply chain moves a hyperscaler has made in years. Meta's AI chip strategy is now unmistakably clear: diversification, to avoid any single-vendor lock-in. One week after pledging more Nvidia chips. The next week, handing AMD a warrant that could be worth tens of billions if everything goes right.
Meta is playing chess while everyone else argues about the board.
The AMD deal deserves more attention than it's getting. Full warrant vesting requires AMD's stock to hit $600 per share — roughly triple its current price. That's not compensation. That's alignment. Meta is saying: we need you to become a giant, because we need competition in this market. The hyperscalers have figured out what Nvidia's dominance actually costs them, and they're paying to dismantle it.
The SaaSpocalypse Is Not a Metaphor
The broader software sector remains in freefall. AppLovin dropped 9%, CrowdStrike nearly 10% on Monday, as AI substitution fears spread through the enterprise software space. The catalyst — a research note suggesting AI would hollow out white-collar revenue streams — was enough to restart a panic that had been simmering since January. Agentic AI is no longer theoretical. It's shipping. And the market is finally pricing in the possibility that some of these SaaS businesses were selling software to people who will soon be replaced by software.
There is something almost poetic about watching Salesforce prep for earnings in this environment. CRM built its empire automating the relationship between salespeople and customers. Now the question is whether AI automates the salespeople entirely. Tonight we'll find out what they think.
The Macro Backdrop Is Genuinely Uncomfortable
The Fed's preferred inflation gauge is stuck near 2.7%, and with PCE data delayed until mid-March due to the government shutdown's administrative hangover, markets are operating in a data vacuum. Q4 GDP came in at 1.4% — well below consensus, and the kind of number that should be causing more alarm than it currently is. The 10-year Treasury yield has drifted down toward 4.06%, which is either the bond market smelling recession or just desperate people searching for safety. Probably both.
Gold settled around $5,200 an ounce. Gold at $5,200 is the market saying, quietly and without drama, that it doesn't entirely trust what it's being told. About tariffs, about growth, about the Fed's ability to thread this needle without something breaking.
Bitcoin, meanwhile, briefly fell below $62,858 on Tuesday, caught in the same anxiety spiral as everything else. The crypto fear and greed index sits at 5 — essentially the floor of despair — while Polymarket's odds of the Clarity Act passing in 2026 have collapsed from 72% to 42% as the stablecoin regulation fight stalls in the Senate. Banks are lobbying against crypto infrastructure with the energy of an industry that has finally noticed the competitor it ignored for a decade.
So What Happens Tonight?
Analysts are calling for $1.53 per share and $65.7 billion in revenue. Nvidia has beaten estimates in twelve consecutive quarters. The hyperscaler capex numbers have only grown since the last call — massively so. There's $350 billion in Blackwell and Rubin pipeline still to be delivered through 2026. The demand side looks bulletproof.
The question is China. Beijing has suspended H200 orders, and Chinese customs reportedly blocked H200 imports, meaning a material revenue stream remains at zero. And gross margin — the real religion for institutional investors — needs to hold in the mid-70s even as HBM memory costs press upward.
If Nvidia beats and guides higher, we get a relief rally that papers over every ugly thing that happened this week. Software stocks bounce. Bitcoin recovers. The AI capex thesis gets its quarterly stamp of approval, and everyone exhales until May.
If it disappoints — if the margins crack, or the China hole is bigger than expected, or the tone shifts even slightly from "demand is off the charts" to something more measured — then this week becomes the week the narrative broke. The SaaSpocalypse becomes something larger. The rotation out of tech accelerates.
Twelve consecutive beats have made Nvidia look like gravity doesn't apply. But gravity is exactly what markets have been rediscovering since January.
Tonight, we find out if Jensen Huang has a deal with physics, or just a very good streak.
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