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Can Tesla's Stock Price Stabilize Amid Musk's Political Controversies and Slumping Global Sales?

Stocks with MACD golden cross, MA10>MA50>MA200, RSI<60, price<20

How should I invest in Recursion Pharmaceuticals now?

Is Trump making China's stock market great again?

What investment opportunities or risks do recent news reflect?

The market once again demonstrated resilience after an initial pullback triggered by a sharp selloff in gold/silver. Instead of cascading lower, equities stabilized quickly and formed another potential higher low, keeping the broader bullish technical structure intact. Against this backdrop of steady equity strength, a cooling precious metals complex, and several major earnings releases ahead, investors can afford to lean more optimistic at current levels. Equities still favor a cautious bullish stance, gold calls for patience rather than urgency, and crypto remains an area best left on the sidelines for now. The divergence across asset classes is becoming clearer, and it offers useful signals for positioning into the week ahead.From a technical standpoint, both the S&amp;P 500 and the Nasdaq 100 pulled back from recent highs following gold&#39;s historic selloff, yet the response from equities was constructive. Dip buying emerged quickly, reinforcing the idea that underlying demand remains firm, supported by a resilient economic outlook and a long term commitment to the AI growth narrative. The retracement formed another higher low, setting the stage for a renewed push toward key resistance levels. This recurring higher low and higher high pattern continues to define what remains a textbook bullish structure. Momentum indicators also support this view. The S&amp;P 500 maintains a clean alignment with MA(3) above MA(7) and MA(10), while the Nasdaq 100 briefly saw MA(3) cross MA(7) but remain comfortably above MA(10), signaling healthy short term momentum rather than trend fatigue. The RSI on the Nasdaq sits near 53, a neutral reading that suggests ample room before any overbought concern enters the picture.<img data-json="{&quot;id&quot;:&quot;d5558613-acdf-4eae-9746-768ad3b653c5&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/7a5752b3-6b18-461b-b9dd-dac9e3c50a46_QQQ_c9a8f6591770108050087.png&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/7a5752b3-6b18-461b-b9dd-dac9e3c50a46_QQQ_c9a8f6591770108050087.png" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />Potential catalysts for the next leg higher arrive with earnings from Google and Amazon. What unsettled investors last week was the sharp selloff in software stocks, driven by fears that advanced AI platforms are already capturing market share while forcing incumbents such as Microsoft into aggressive spending cycles with softer cloud growth. We continue to view this not as a collapse in the AI story, but as a structural transition within the tech sector. Traditional software models are being pressured to evolve, adopt more AI driven innovation, and compete more aggressively. That competitive intensity ultimately reinforces demand across the semiconductor supply chain, where compute capacity remains the true bottleneck.Google&#39;s earnings may help clarify this shift. Gemini has demonstrated meaningful competitive strength, particularly in software integration and user adoption, with commercialization appearing more mature than many expected. This positions Google as a direct challenger not only to OpenAI and Claude, but also as a platform owner that can fully internalize the value of its AI ecosystem. Unlike Microsoft, Google controls its own flagship AI model, allowing it to maximize monetization across search, cloud, and partnerships. Its growing alignment with Apple and other ecosystem players further strengthens this advantage. At the infrastructure level, Google&#39;s continued investment in its custom TPU chips stands to benefit Broadcom, reinforcing the theme that deeper AI integration drives incremental demand for specialized silicon. A strong earnings showing could offer investors a clearer glimpse into the real trajectory of AI adoption and reinforce confidence in the long term bullish case.Amazon represents a complementary angle on the same theme. AWS continues to benefit from broad based AI and core infrastructure demand, and its positioning differs meaningfully from Azure. AWS operates as a more neutral cloud platform, serving nearly all major AI developers without the same internal resource conflicts. Microsoft&#39;s need to balance internal AI development with external customer demand has contributed to persistent capacity constraints. In contrast, AWS and Google Cloud may be better positioned to capture accelerating workloads as enterprises scale AI adoption. If this dynamic continues, growth at AWS and Google Cloud could offset concerns raised by Microsoft&#39;s recent results and support a healthier, more diversified AI ecosystem.Crypto remains the weakest link in this environment. We have repeatedly emphasized caution, and recent price action reinforces that stance. Bitcoin continues to decouple from traditional risk assets, failing to respond even as equity sentiment improves. While declining markets in gold and silver may attract dip buyers elsewhere, they also divert speculative interest away from crypto. Despite improving risk appetite broadly, Bitcoin remains below the $80,000 level and has broken below a key resistance zone that held for roughly three months. This lack of participation from larger pools of capital suggests that crypto is not currently aligned with the dominant risk on narrative.<img data-json="{&quot;id&quot;:&quot;81db1837-b6c9-45fb-bfd0-45e75e632c1a&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/1d256893-af91-43b4-8275-37abb99bf408_btc_661ee7841770108119564.png&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/1d256893-af91-43b4-8275-37abb99bf408_btc_661ee7841770108119564.png" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />Gold, by contrast, is beginning to stabilize after two sharp down sessions. The recent selloff was largely driven by deleveraging, as excessive speculative positioning was forced out of the market. The backdrop was complicated further by commentary surrounding new Federal Reserve chair Kevin Warsh, who favors a stronger dollar, supports rate cuts, and also advocates balance sheet reduction. While balance sheet shrinkage could cap gold&#39;s upside over time, it was not the primary driver of the recent decline. Excess leverage and speculative excess played a larger role. Technically, gold has ended its consecutive decline and entered a consolidation phase, making a short term bounce more plausible. The RSI has cooled significantly from extreme levels near 96 to a far more balanced range, and trading volume has gradually declined, signaling a normalization of sentiment. From here, buying the dip may become the base case, but patience remains warranted until consolidation matures.<img data-json="{&quot;id&quot;:&quot;087b8c09-dcf9-40a8-ac94-ea2f4b824217&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/37b050c2-267d-4458-a7b2-7f8938b157af_GLD_5bd5b2ea1770108297828.png&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/37b050c2-267d-4458-a7b2-7f8938b157af_GLD_5bd5b2ea1770108297828.png" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />In conclusion, the broader market continues to send constructive signals. Equity indices are respecting bullish technical structures, dip buying remains consistent, and upcoming earnings from key technology leaders could deliver positive surprises that reinforce the AI driven growth narrative. The recent software selloff reflects structural adjustment rather than systemic weakness, while semiconductors remain central beneficiaries of rising compute demand. Crypto continues to struggle with relevance in a warming risk environment, and gold is transitioning from excess toward balance rather than offering an immediate opportunity. In this setting, discipline matters. Staying aligned with technical strength, focusing on earnings driven confirmation, and avoiding crowded or premature trades offers the best path to navigating the week ahead.

us_middle_importance

Stock

Cryptocurrency

NorthAmerica

Cloud

Bitcoin

Another Clean Bullish Technical Setup Takes Shape as Gold Consolidates, Where Positive Surprises May Emerge This Week

Nebius is building the fundamental rails for the AI paradigm shift. Its core business is pure infrastructure: owning and renting out space in data centers packed with Nvidia GPUs. Clients use this capacity to train and run their artificial intelligence models, getting a full-stack solution without needing to manage ancillary services. This model mirrors the early cloud computing plays that powered the last tech boom, positioning Nebius as a critical layer in the new technological S-curve.<img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-qwen_generated_1770105406059.jpg.png" style="max-width:100%;"/>The market is already recognizing this growth trajectory. The stock has gained <a href="https://finance.yahoo.com/news/nebius-group-n-v-nbis-171719973.html">more than 80% over the past six months</a>, a powerful signal of investor conviction in its scaling potential. Wall Street consensus reflects this high-velocity setup. Analysts are overwhelmingly bullish, with a <a href="https://www.tipranks.com/stocks/nbis/forecast">Strong Buy rating</a> and an average price target implying an 85% upside from recent levels. This isn't a bet on a single product; it's a bet on the exponential adoption of AI compute itself.The numbers underscore the scale of the opportunity. Management projects the company's annual run rate to explode from <a href="https://finance.yahoo.com/news/ai-stock-trading-massive-discount-213500447.html">$551 million at the end of Q3 2025</a> to between $7 billion and $9 billion by the end of 2026. That kind of acceleration is what drives the stock's S-curve move. The current valuation, while high on trailing sales, looks different when measured against these explosive forward projections. For investors, Nebius represents a pure-play bet on the infrastructure layer that will be essential as AI adoption ramps globally.<h2>The Valuation Paradox: Trailing vs. Forward Growth</h2>The stock's explosive rally creates a stark valuation paradox. On a trailing basis, Nebius trades at a premium, with a price-to-sales ratio of roughly <a href="https://finance.yahoo.com/news/nebius-group-n-v-nbis-171719973.html">60x</a>. That multiple is steep, reflecting the market's full price for its current scale. But the setup hinges entirely on the forward view. Analyst revenue projections, which imply a run rate of $7 billion to $9 billion by year-end, suggest a forward P/S ratio of less than 7x. The market is paying for the future, not the present.<visualization data='{"components":[{"show_type":"jgyNewLowcode","config":{"type":"iwcapp/stockBackTestTool","version":"0.0.3","url":"//cdn.ainvest.com/frontResources/s/foiegras/stockBackTestTool/0.0.3/stockBackTestTool@0.0.3index.js"},"data":{"columns":[{"index_name":"strategy_basic_info","key":"strategy_basic_info","type":"Object"},{"index_name":"backtest_condition","key":"backtest_condition","type":"Object"},{"index_name":"backtest_result","key":"backtest_result","type":"STR"}],"datas":[{"strategy_basic_info":{"name":"RSI(14) Oversold Long-Only Strategy","description":"Long NBIS when RSI(14) &lt; 30; exit when RSI(14) &gt; 70, or after 20 trading days, or take-profit +15%, or stop-loss −7%. Backtest period: 2024-02-03 to 2026-02-02."},"backtest_condition":{"object":{"display_name":"Object","type":"ticker","ticker":["NBIS"]},"open_signal":{"display_name":"Open Signal","type":"criteria","criteria":"RSI(14) &lt; 30"},"sell_signal":{"display_name":"Close Signal","type":"criteria","criteria":"RSI(14) &gt; 70, or after 20 trading days, or take-profit +15%, or stop-loss −7%"},"risk_control":{"display_name":"Risk Control","parameters":{"take_profit":{"display_name":"Take-Profit","value":15,"unit":"%"},"stop_loss":{"display_name":"Stop-Loss","value":7,"unit":"%"},"max_holding_days":{"display_name":"Hold Days","value":20}}}},"backtest_result":"https://cdn.ainvest.com/backtest/agent/session/784562/1800109709/8d86a3c6-fa73-4226-b9e4-1348749b459a/nbis_rsi14_oversold_backtest_20240203_20260202.json"}]},"uuid":"1770105471036"}],"page":{"layout":{"layout_mode":"grid","layout_data":"[{\"uuid\": \"1770105471036\", \"show_type\": \"jgyNewLowcode\"}]"}}}'></visualization><visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_1tfmgigu.json"></visualization>This forward bet is where the core financial risk emerges. The company's asset-heavy model means its GPUs depreciate over a 4-year life. As Nebius scales its fleet to meet demand, this depreciation expense will rise, directly pressuring both operating margins and EBIT. Morgan Stanley's analysis highlights this headwind, noting it as a key challenge that will pressure profitability. The path to high returns requires not just revenue growth, but also managing this fixed cost of growth.Yet the total value proposition extends beyond the core AI compute play. The company benefits from non-core businesses and equity stakes that add a layer of value not captured in the pure infrastructure math. These assets provide a buffer and diversify the earnings stream, improving the overall investment case. They are the hidden rails that could support the main S-curve even if the primary compute growth faces temporary friction.The bottom line is a classic high-growth infrastructure trade. The valuation is a bet on exponential adoption, but it is not a free pass. The company must navigate the rising cost of its own growth through depreciation while simultaneously executing on its massive capacity build-out. The stock's move is a vote of confidence in that execution, but the margin pressure from asset life is the first major friction point on the upward slope.<h2>Execution Risks and the Path to Exponential Adoption</h2>The path from Nebius's ambitious targets to exponential adoption is paved with significant capital and operational risks. The company's plan to scale to <a href="https://finance.yahoo.com/news/nebius-group-n-v-nbis-171719973.html">2.5 GW of AI infrastructure by the end of 2026</a> is a massive undertaking. This requires sustained heavy capital expenditure, which Morgan Stanley explicitly notes will keep free cash flow negative for the foreseeable future. This capex intensity is the fundamental friction point: the company must burn cash to build the rails it will eventually profit from, creating a long runway of negative free cash flow until scale is achieved.The primary execution risk is operational. Nebius is racing to capture market share in a classic 'winner-take-most' infrastructure race as AI compute demand explodes. Its software platform and managed services are key differentiators, but scaling operations to meet this demand efficiently is a non-trivial challenge. The firm's note that the $7 billion to $9 billion ARR target for Q4 2026 sounds overly optimistic underscores the difficulty of hitting such a steep growth curve. Execution here is binary; any misstep in deployment, customer onboarding, or service delivery could cede ground to competitors.Yet, several catalysts could accelerate adoption and mitigate these risks. The ongoing trend of onshoring AI infrastructure is a powerful tailwind. As companies seek to reduce reliance on foreign supply chains and data centers, domestic providers like Nebius are well-positioned to benefit from this strategic shift. Furthermore, potential policy support for domestic tech manufacturing and data sovereignty could provide an additional boost to demand for its services.The bottom line is a high-stakes race between capital burn and market capture. Nebius is building the essential rails for the AI paradigm, but the stock's valuation already prices in a successful outcome. The coming year will test whether the company can navigate the negative cash flow phase and scale its operations fast enough to own a dominant share of this exponential growth curve. For now, the catalysts are present, but the execution risk remains the central question.

Semiconductor

US Tech

Artificial Intelligence

Nebius Group

Nvidia

Nebius: The AI Compute Rails Play on the S-Curve

February 2, 2026 — In a move that fundamentally reshapes the landscape of private capital and artificial intelligence, <a href="https://www.spacex.com/updates#xai-joins-spacex%20" target='__blank'>Elon Musk has officially announced the merger of SpaceX and xAI.</a> The combined entity, <a href="https://www.bloomberg.com/news/articles/2026-02-02/elon-musk-s-spacex-said-to-combine-with-xai-ahead-of-mega-ipo?srnd=homepage-americas&amp;embedded-checkout=true" target='__blank'> valued at a staggering $1.25 trillion,</a> represents the largest consolidation of hardware and software infrastructure in history. This strategic pivot, confirmed via a statement on SpaceX’s website earlier today, was notably predicted by AIME, which successfully forecasted the consolidation of Musk’s heavy-industry and software ventures earlier this week. The merger is not merely financial engineering; it is a calculated bet that the future of AI training lies not in terrestrial data centers, but in orbit. As Wall Street digests this news, the question shifts from if Musk can launch rockets, to whether he can build the physical backbone of the &quot;sentient sun&quot; he envisions.<h2>The &quot;Next Book&quot;: Vertical Integration for the Stars</h2>In a memo released to employees and the public, Musk framed the acquisition of xAI not just as a new chapter, but as &quot;the next book&quot; in the companies&#39; shared mission. The core thesis driving this merger is an impending energy crisis on Earth. Musk argues that current AI advances are strictly limited by terrestrial power grids and cooling requirements.&quot;Global electricity demand for AI simply cannot be met with terrestrial solutions... without imposing hardship on communities,&quot; Musk stated. The merged entity plans to utilize SpaceX’s Starship architecture to launch massive orbital data centers. By harnessing near-constant solar power in space—where the sun never sets—the company aims to scale compute capacity without the operating costs or environmental drag of Earth-based facilities.The synergies are explicit: xAI provides the demand for compute, while SpaceX provides the delivery mechanism. This vertical integration allows the combined company to optimize Starship’s payload specifically for heavy compute hardware. Musk estimates that within two to three years, space will become the lowest-cost environment for generating AI compute.<img data-json="{&quot;id&quot;:&quot;88d1bafc-5c2e-47ce-833a-d71923b1414f&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/875a17f9-5910-4fa2-98fe-8b83db770765_spaceX2_aa6ebc941770083680669.jpg&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/875a17f9-5910-4fa2-98fe-8b83db770765_spaceX2_aa6ebc941770083680669.jpg" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" /><h2></h2><img data-json="{&quot;id&quot;:&quot;09bd1c95-3187-441d-baa7-4f38b77f5a41&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/cc65d16e-8baf-458d-813d-f60e6eef967d_spaceX3_222c6a921770083693348.jpg&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/cc65d16e-8baf-458d-813d-f60e6eef967d_spaceX3_222c6a921770083693348.jpg" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" /><h2>Valuation Reality Check: Ainvest’s Prediction Holds True</h2>The deal structure assigns a $1 trillion valuation to SpaceX and $250 billion to xAI. This creates a behemoth that dwarfs most public companies. Notably, this valuation point serves as a validation for Ainvest, which had previously modeled a combined IPO target range of $1.5 trillion to $1.75 trillion.<img data-json="{&quot;id&quot;:&quot;2c0ee8ec-37f6-4af2-bf56-1ff2fd632848&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/d9fcbad6-2f85-4fe2-84f1-99105950645b_spaceX1_85f578fb1770083660061.png&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/d9fcbad6-2f85-4fe2-84f1-99105950645b_spaceX1_85f578fb1770083660061.png" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />As seen in previous analysis by Ainvest, the standalone valuations of SpaceX (estimated around $800B) and xAI (around $50B) suggested a lower aggregate. However, the premium applied to the combined entity reflects the &quot;forcing function&quot; of the merger: the ability to deploy Starship V3 to launch millions of tons of payload. The logic is that by removing the bottleneck of terrestrial energy, xAI can scale at a rate impossible for competitors like OpenAI or Google, justifying a valuation that approaches the tech giants.Wall Street analysts are reacting with cautious optimism. A note from Morgan Stanley suggests that while the engineering challenges of orbital heat dissipation are immense, the financial logic of &quot;free&quot; solar energy in orbit could fundamentally alter the unit economics of AI training. Conversely, Goldman Sachs warns that the capital intensity of this project will be unprecedented, likely requiring the massive $50 billion IPO that SpaceX has been planning for later this year.<h2>The Engineering of &quot;Infinite&quot; Compute</h2>The technical roadmap unveiled today is aggressive. SpaceX intends to launch a constellation of satellites that operate as orbital data centers. The math presented by Musk is stark: launching one million tons of satellites could add 100 gigawatts of AI compute capacity annually.This demand creates a recursive loop for SpaceX’s hardware development. Just as Starlink necessitated the Falcon 9’s reusability, the demand for orbital compute is the &quot;forcing function&quot; for Starship. The introduction of V3 Starlink satellites and direct-to-mobile capabilities will act as the initial revenue bridge, but the long-term value proposition is the creation of a Kardashev II-level infrastructure.Furthermore, the roadmap extends beyond Earth orbit. The merger document outlines plans for lunar manufacturing bases utilizing electromagnetic mass drivers to deploy further deep-space compute, theoretically unlocking 500 to 1000 TW/year of capacity. While this sounds like science fiction, the immediate market impact is a repricing of space assets and a renewed focus on the semiconductor supply chain that creates radiation-hardened chips.<h2>Navigating the Velvet Rope: How to Invest</h2>With the IPO likely scheduled for later in 2026, retail investors are currently locked out of direct ownership. SpaceX remains a privately held &quot;centicorn,&quot; and getting on the cap table requires navigating strict regulations.For accredited investors (those with income above $200k or net worth over $1M), the primary route remains private markets or Special Purpose Vehicles (SPVs). Platforms like Hiive or Rainmaker Securities allow for the trading of nonpublic securities, though minimums often exceed $100,000 and carry significant fees.For the general public (&quot;non-accredited investors&quot;), exposure must be indirect:<ul><li>Mutual Funds: Baron Partners Fund (BPTIX) and Baron Focused Growth Fund are the heavyweights here, with significant portfolio allocations to SpaceX.</li><li>Interval Funds: The Private Shares Fund and Cathie Wood’s ARK Venture Fund hold SpaceX as top holdings, though they come with liquidity constraints and higher management fees (up to 2.75% for ARK).</li><li>ETFs: The ERShares Private-Public Crossover ETF (XOVR) has become a popular proxy, holding a sliver of SpaceX via SPVs. Additionally, the newly launched Baron First Principles ETF (RONB) holds approximately 16% in SpaceX.</li></ul>Alternatively, investors are looking at public supply chain plays. Companies like Graham Corp. (turbo pumps) and Hunting Plc (landing legs) are poised to benefit from the increased launch cadence required to build these orbital data centers.<h2>Conclusion</h2>The merger of SpaceX and xAI at a $1.25 trillion valuation is a definitive statement that the future of computing is extraterrestrial. By coupling the launch capacity of Starship with the voracious energy appetite of large language models, Elon Musk is attempting to solve the physical constraints of AI scaling. While the risks—ranging from launch failures to orbital debris management—are monumental, the market is beginning to price in a reality where the cloud is no longer just a metaphor, but a physical network orbiting above us. As predicted by AIME and modeled by Ainvest, the path to a multi-trillion dollar valuation is now charted; the execution depends entirely on whether Starship can deliver the infrastructure of the future.

us_high_importance

PUBLIC

AI terminals

Elon Musk

Musk Combines SpaceX and xAI at $1.25 Trillion: Is Orbital Compute the Next Gold Rush?

The market for NAND flash memory is undergoing a fundamental transformation, and Sandisk is positioned squarely at the center of a durable supply shock. This is not a fleeting cyclical upswing but a structural evolution driven by artificial intelligence. The evidence points to a prolonged super-cycle where demand from hyperscalers and data centers is outstripping supply for years to come.Analysts forecast a <a href="https://www.neumonda.com/memory-market-2026-scarcity-strategy-and-security-of-supply/">global MLC NAND Flash capacity drop of over 40% in 2026</a>, a staggering contraction. This is not due to a lack of demand, but a deliberate industry discipline. Major players like Samsung have announced they will end MLC NAND production, with final shipments not until mid-2026. Others are scaling back to focus on other technologies. The result is a constrained supply that is failing to keep pace with AI-driven data growth, leading to a sustained environment of higher prices. As Sandisk's CFO noted, the company experienced a <a href="https://blocksandfiles.com/2026/01/30/sandisk-turns-pricey-nand-chips-into-gold/">clear and significant improvement in market conditions across end markets, which led to higher pricing</a>.This shift is the bedrock of Sandisk's recent performance. Its second-quarter revenue of $3.03 billion crushed guidance, and profits surged 672 percent year-over-year. The company's gross margin ballooned to 51.1%, up from 29.8% the prior quarter. Crucially, bit shipments only rose in the low single digits, meaning the profit explosion was almost entirely driven by price increases. This is the hallmark of a supply-constrained market: companies are selling the same volume at much higher prices, dramatically improving profitability.The durability of this supply shock is reinforced by high barriers to entry. Semiconductor fabs require massive capital investment, and with high interest rates and elevated energy costs increasing the cost of building new capacity, suppliers are cautious. The industry is moving into a phase where scaling effects are diminishing, making the economics of expansion less attractive. This discipline is likely to persist, keeping the market in a state of structural undersupply well beyond 2026.Sandisk's strategic alliance with Kioxia provides a critical competitive moat within this environment. The recent extension of their joint venture agreements through <a href="https://investor.sandisk.com/news-releases/news-release-details/kioxia-and-sandisk-extend-yokkaichi-joint-venture-agreement">December 31, 2034</a> ensures stable production capacity and access to advanced manufacturing. This partnership, spanning over 25 years, is a key reason the company can reliably meet demand and capture the benefits of the price recovery. For a value investor, this durable supply shock and the company's protected position within it represent the foundation for a long-term compounding story.<h2>Financial Quality and the Nature of the Upside</h2>The recent financial explosion at Sandisk is a textbook case of pricing power in a supply-constrained market. The company's profit surge is not a sign of operational inefficiency, but the direct result of a fundamental shift in the underlying economics. In the latest quarter, profits represented <a href="https://blocksandfiles.com/2026/01/30/sandisk-turns-pricey-nand-chips-into-gold/">26.6 percent of revenues</a>, a dramatic jump from 4.9% the prior quarter. This isn't a story of volume growth; bit shipments increased in the low single digits, confirming that the profit explosion was almost entirely driven by higher prices. For a value investor, this distinction is critical. It separates a cyclical windfall from a sustainable increase in earnings power.The quality of this earnings power is supported by a strong balance sheet. With a <a href="https://artificall.com/analysis/companies/sandisk-corporation/">debt-to-equity ratio of 0.22</a> and ample liquidity, the company is well-positioned to navigate the cycle. This financial strength provides a margin of safety, allowing Sandisk to invest in capacity and R&amp;D without the pressure of near-term debt covenants. The recent operating cash flow of $1.02 billion and free cash flow of $843 million provide the fuel for that investment, turning the pricing upside into tangible capital.Yet, the nature of this upside remains tied to the durability of the supply shock. The profit surge is a function of the market's structural undersupply, which is itself a function of industry discipline and high barriers to entry. The company's strategic alliance with Kioxia, extended through 2034, provides a moat that ensures Sandisk can reliably capture this pricing power. In this light, the financial results are not a one-time event but the expected outcome of a business model aligned with a multi-year super-cycle. The question for the long-term holder is not whether the profit margin is high, but whether the company can maintain its disciplined capacity allocation and strategic partnerships as the cycle evolves. The strong balance sheet and proven pricing power suggest it is well-equipped to do so.<h2>Valuation and the Margin of Safety</h2><visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_ci8vjkq3.json"></visualization>The stock's recent performance is a story of pure momentum. Over the past 120 days, Sandisk shares have surged 1434%, and the stock now trades at an enterprise value to sales multiple of 10.9. That is a premium to historical norms and reflects a market that has already priced in a significant portion of the expected super-cycle upside. For a value investor, the critical question is whether this price leaves a sufficient margin of safety for the long-term compounding story.On one hand, the valuation argument is compelling. Despite the staggering run-up, some analysts contend the stock remains attractively priced at <a href="https://www.fool.com/investing/2026/01/13/up-948-should-you-buy-sandisk-right-now/">7 times sales</a>, a discount to the broader tech sector. This view hinges on the durability of the supply shock and the company's ability to maintain its pricing power. The financial results-gross margins over 50% and profits representing a quarter of revenue-show the business model can generate exceptional returns on capital. In that light, a high sales multiple may be justified if the company can sustain this profitability for years.Yet, the margin of safety is compressed. The stock has already climbed from a 52-week low of $27.89 to a current price near $665, a move that has left little room for error. The recent volatility, with a 15.6% amplitude and a 16.7% daily volatility, underscores the speculative heat in the trade. This is not a typical value stock; it is a high-conviction bet on a multi-year cycle. The company pays no dividend, reflecting its focus on reinvesting in the business during this high-growth phase, which is appropriate but means investors are fully exposed to the stock's performance.The bottom line is that the market has priced in perfection. The valuation now assumes the supply shock continues unabated, that industry discipline holds, and that Sandisk's strategic alliance with Kioxia ensures it captures the full benefits. Any deviation-a faster-than-expected capacity ramp from competitors, a shift in AI demand patterns, or a slowdown in data center spending-could quickly erode the premium. For a disciplined investor, the current price demands a high degree of confidence in the long-term thesis. It offers a compelling return if the cycle plays out as expected, but it offers little cushion if it does not.<h2>Catalysts, Risks, and What to Watch</h2>The path forward for Sandisk hinges on a few key catalysts and a single, dominant risk. The company's ability to compound value depends on the durability of its moat, which is built on two pillars: its strategic alliance with Kioxia and its disciplined execution within a structurally tight market.The primary catalyst is the successful execution of the extended partnership. The recent <a href="https://www.trendforce.com/news/2026/01/29/news-second-tier-no-more-kioxia-and-sandisk-balance-alliance-and-rivalry-in-ai-nand-race/">strategic NAND alliance across Japan and the U.S.</a> is not just a business deal; it is a critical engine for maintaining manufacturing scale and technological leadership. The joint development of advanced 3D NAND, from the current BiCS8 (218 layers) to the upcoming BiCS10 (332 layers) slated for 2026, ensures Sandisk can offer products that command premium pricing. This alliance, spanning over 25 years, provides a moat against competitors who must bear the full cost of R&amp;D and fab investment. Another near-term catalyst is the potential for further price hikes. With the market in such a tight supply position, the company's plan for a 100% NAND price hike in the new year signals that pricing power remains intact and could be leveraged further.The flip side of this opportunity is the risk of a cyclical reversal. The entire thesis rests on the <a href="https://www.neumonda.com/memory-market-2026-scarcity-strategy-and-security-of-supply/">structural undersupply</a> that analysts forecast will persist through 2026 and beyond. If AI demand softens or, more critically, if new capacity comes online faster than expected, the pricing power that has fueled the profit explosion could erode quickly. The market's current discipline is a function of high capital costs and interest rates, but a shift in those conditions could change the calculus for suppliers. This is the core vulnerability for any investment in this super-cycle.For investors, the immediate watchpoints are clear. The company has already provided <a href="https://www.sandisk.com/company/newsroom/press-releases/2026/2026-01-29-sandisk-reports-fiscal-second-quarter-2026-financial-results">third-quarter revenue guidance of $4.40 billion to $4.80 billion</a>, a sequential jump that will test execution. More importantly, any shift in the company's outlook for 2026-whether in capacity plans, pricing assumptions, or demand forecasts-will be a major signal. The guidance for the year will reveal whether management sees the supply shock continuing as forecast or if they are beginning to anticipate a normalization. Monitoring these updates will be essential for gauging the durability of the moat and the sustainability of the current premium valuation.

Asia-Pacific

Chip Stocks

Sandisk

Sandisk: Assessing the Moat and the Margin of Safety in a Memory Supercycle

U.S. AI leader Palantir reported its 2025 Q4 earnings, significantly beating market expectations across the board. Quarterly revenue reached $1.41 billion, up 70% year over year, well above the consensus estimate of $1.34 billion. Adjusted earnings per share came in at $0.25, exceeding expectations of $0.23.<img data-json="{&quot;id&quot;:&quot;783ad252-fe20-497f-a222-beebda762ecd&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/ff3a5a19-c137-454a-a0dd-56b982b6ea40_HALtMIxbIAA7o_C_458176791770081173305.jpg&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/ff3a5a19-c137-454a-a0dd-56b982b6ea40_HALtMIxbIAA7o_C_458176791770081173305.jpg" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />Palantir also delivered an exceptionally strong outlook for 2026. The company guided Q1 2026 revenue to a range of $1.532–1.536 billion, with the low end far above market expectations of $1.32 billion.For full-year 2026, revenue is projected at $7.182–7.198 billion, significantly higher than the consensus estimate of $6.22 billion.Following the earnings release, Palantir shares jumped more than 6% in after-hours trading.<visualization data='{&quot;components&quot;:[{&quot;uuid&quot;:&quot;e925f7717d0aeb49&quot;,&quot;config&quot;:{&quot;image&quot;:&quot;https://lh-prod-mid-pub-newsf10.s3.amazonaws.com/logo/PLTR.png&quot;,&quot;marketTag&quot;:&quot;NASDAQ&quot;,&quot;show_type_id&quot;:702,&quot;tradeClass&quot;:&quot;closed&quot;,&quot;title&quot;:&quot;KxxV2&quot;,&quot;fsType&quot;:&quot;closed&quot;,&quot;showBottom&quot;:true,&quot;showCodeContrast&quot;:false,&quot;score&quot;:20,&quot;show_type&quot;:&quot;kline3&quot;,&quot;maLine&quot;:[5,10,30,60],&quot;moduleList&quot;:[],&quot;variety&quot;:&quot;stock&quot;,&quot;scoreRuleNames&quot;:&quot;&quot;,&quot;tradeStatus&quot;:&quot;trading&quot;,&quot;codeName&quot;:&quot;Name&quot;,&quot;klineDefaultType&quot;:&quot;fs&quot;,&quot;title_config&quot;:{&quot;config&quot;:{&quot;display&quot;:true,&quot;display2&quot;:false,&quot;txt_style&quot;:0,&quot;url&quot;:&quot;&quot;},&quot;data&quot;:{&quot;h1&quot;:&quot;PLTR 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code&quot;,&quot;source&quot;:&quot;fixed_index&quot;,&quot;type&quot;:&quot;STR&quot;,&quot;unit&quot;:&quot;&quot;},{&quot;domain&quot;:&quot;abs_xxxxxx&quot;,&quot;feKey&quot;:&quot;Name&quot;,&quot;index_name&quot;:&quot;Name&quot;,&quot;key&quot;:&quot;Name&quot;,&quot;label&quot;:&quot;name&quot;,&quot;origin_index&quot;:&quot;stock name&quot;,&quot;source&quot;:&quot;fixed_index&quot;,&quot;type&quot;:&quot;STR&quot;,&quot;unit&quot;:&quot;&quot;},{&quot;feKey&quot;:&quot;Date&quot;,&quot;index_name&quot;:&quot;Date&quot;,&quot;key&quot;:&quot;Date&quot;,&quot;label&quot;:&quot;date&quot;,&quot;origin_index&quot;:&quot;Date&quot;,&quot;type&quot;:&quot;DATE&quot;},{&quot;domain&quot;:&quot;abs_xxxxxx&quot;,&quot;feKey&quot;:&quot;Closing Price&quot;,&quot;index_name&quot;:&quot;xxxx@Closing Price&quot;,&quot;key&quot;:&quot;Closing Price&quot;,&quot;label&quot;:&quot;NoIndent&quot;,&quot;report_type&quot;:&quot;TRADE_DAILY&quot;,&quot;source&quot;:&quot;&quot;,&quot;timestamp&quot;:&quot;&quot;,&quot;type&quot;:&quot;DOUBLE&quot;,&quot;unit&quot;:&quot;USD&quot;}],&quot;condition&quot;:&quot;[{\&quot;sonSize\&quot;:2,\&quot;opName\&quot;:\&quot;and\&quot;,\&quot;relatedSize\&quot;:0},{\&quot;sonSize\&quot;:0,\&quot;indexName\&quot;:\&quot;xxxx@stock code\&quot;,\&quot;indexProperties\&quot;:[\&quot;EQUAL PLTR.O\&quot;],\&quot;indexPropertiesMap\&quot;:{\&quot;EQUAL\&quot;:\&quot;PLTR.O\&quot;},\&quot;domain\&quot;:\&quot;abs_xxxxxx\&quot;,\&quot;relatedSize\&quot;:0},{\&quot;sonSize\&quot;:0,\&quot;indexName\&quot;:\&quot;xxxx@Closing Price\&quot;,\&quot;indexProperties\&quot;:[\&quot;xxxxxx 20260202\&quot;,\&quot;xxxxxx 20260202\&quot;],\&quot;indexPropertiesMap\&quot;:{\&quot;xxxxxx\&quot;:\&quot;20260202\&quot;,\&quot;xxxxxx\&quot;:\&quot;20260202\&quot;},\&quot;domain\&quot;:\&quot;abs_xxxxxx\&quot;,\&quot;relatedSize\&quot;:0}]&quot;,&quot;dataSize&quot;:1,&quot;datas&quot;:[{&quot;code&quot;:&quot;PLTR&quot;,&quot;Ticker&quot;:&quot;PLTR.O&quot;,&quot;market_code&quot;:&quot;185&quot;,&quot;Closing Price&quot;:&quot;147.76&quot;,&quot;Date&quot;:&quot;20260202&quot;,&quot;Name&quot;:&quot;Palantir&quot;}],&quot;meta&quot;:{&quot;extra&quot;:{}},&quot;row_count&quot;:1,&quot;status_code&quot;:0,&quot;status_msg&quot;:&quot;ok&quot;},&quot;category&quot;:&quot;generic&quot;,&quot;chart_type&quot;:&quot;&quot;,&quot;show_type&quot;:&quot;jgyKline3&quot;,&quot;title_config&quot;:{&quot;config&quot;:{&quot;display&quot;:true,&quot;display2&quot;:false,&quot;txt_style&quot;:0,&quot;url&quot;:&quot;&quot;},&quot;data&quot;:{&quot;h1&quot;:&quot;PLTR Trend&quot;,&quot;h2&quot;:&quot;&quot;},&quot;show_type&quot;:&quot;title1&quot;},&quot;support_refresh&quot;:false,&quot;data_config&quot;:{&quot;data_ext_params&quot;:{},&quot;query_type&quot;:&quot;intusstock&quot;}}],&quot;global&quot;:{&quot;query_type&quot;:&quot;intusstock&quot;},&quot;page&quot;:{&quot;language&quot;:&quot;&quot;,&quot;layout&quot;:{&quot;layout_data&quot;:&quot;[{\&quot;showType\&quot;:\&quot;jgyKline3\&quot;,\&quot;uuid\&quot;:\&quot;e925f7717d0aeb49\&quot;}]&quot;},&quot;render_for&quot;:&quot;aigc&quot;},&quot;data_config&quot;:{&quot;data_ext_params&quot;:{},&quot;query_type&quot;:&quot;intusstock&quot;}}' dataurl='undefined'></visualization>CEO Alex Karp described the results as “the single best performance in the technology sector over the past decade,” calling it a “cosmic-level return” for shareholders.Driven by President Trump’s emphasis on ICE and defense technology, Palantir’s U.S. government revenue surged 66%, with the majority coming from the Department of Defense.In the summer of 2025, Palantir signed a 10-year contract worth up to $10 billion with the U.S. Army to support its software and data needs. In December, the company also secured a $448 million contract with the U.S. Navy to develop “ShipOS,” an operating system designed to support modern warship development. Demand from U.S. government contracts has been so strong that the company has struggled to allocate resources to U.S. allies.Another key government customer is ICE. According to an analysis of government filings by the *Financial Times*, Palantir has received $81 million in ICE contracts since January 2025. This includes a $30 million agreement signed last April to build a system aimed at streamlining the “identification and apprehension of undocumented immigrants.”Palantir’s cooperation with ICE dates back more than a decade, beginning during the Obama administration. While recent ICE enforcement actions have sparked controversy, Karp defended the partnership, arguing it helps secure U.S. borders. He stated that Palantir’s technology prevents terrorist attacks while also protecting citizens from unlawful government surveillance.Beyond government contracts, Palantir’s commercial business also delivered standout performance. Commercial revenue reached $507 million, up 137% year over year. Karp noted that the company’s results are being driven by “an increasing number of discerning American enterprises and institutions that truly understand the value of artificial intelligence.”<img data-json="{&quot;id&quot;:&quot;3eb7b5cb-ece9-4de4-a1df-de14c9d4ce55&quot;,&quot;type&quot;:&quot;image&quot;,&quot;alt&quot;:&quot;&quot;,&quot;children&quot;:[{&quot;text&quot;:&quot;&quot;}],&quot;src&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/27dba96f-7729-41c5-af4a-56727b970a31_HALyK_5bEAA-9_d_41236d351770081190006.jpg&quot;}" src="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/27dba96f-7729-41c5-af4a-56727b970a31_HALyK_5bEAA-9_d_41236d351770081190006.jpg" contentEditable="false" style="display: block; margin: 0 auto; maxWidth: 100%" />However, geopolitical tensions are reshaping demand. Under Trump’s “America First” strategy, relations between Europe and the U.S. have deteriorated. Karp acknowledged that European clients are more inclined to use domestic vendors and have shown hesitation toward Palantir’s services. As a result, revenue from customers outside the U.S. fell to 23%, down from 33% in 2024.Dispelling Valuation ConcernsPalantir has long faced criticism from analysts over its elevated valuation. This earnings report, however, reinforced that its high-growth trajectory justifies premium multiples. Karp emphasized that Palantir’s commercial segment benefits from surging demand for software that provides structural support for large language models. Companies that lack the ability to “actually catch mice,” he said, will inevitably fade into irrelevance.On Monday, William Blair analyst Louis DiPalma upgraded Palantir from “Market Perform” to “Outperform,” noting that the prior pullback had made the company’s valuation “far more reasonable.”

Europe

Palantir

Palantir Q4 Earnings Blowout! Revenue +70%, 2026 Outlook Stuns the Street

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The U.S. House is moving to pass a $1.2 trillion funding package to end the partial government shutdown while allowing short-term negotiations on immigration enforcement oversight

US official: US military shot down an Iranian drone that approached US Navy aircraft carrier in the Arabian Sea

Trump escalated his dispute with Harvard, demanding $1 billion in damages and signaling tougher pressure on universities amid ongoing negotiations over federal funding and oversight.

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