Nvidia Fails to Impress Investors With Forecast | The Asia Trade 2/26/2026
Speakers
Summary
- The 2026 AI Divergence: The transcript (set in a futuristic Feb 2026) highlights a critical bifurcation in the AI trade. While Nvidia (NVDA) continues to beat forecasts with $78B in quarterly revenue, the market reaction is muted, suggesting "peak fear" or saturation in the immediate trade. Conversely, "AI Disruption" is hammering legacy software (Salesforce), while capital flows rotate heavily into North Asian industrials (Samsung, SK Hynix) which have order books filled through 2028.
- North Asia > US Software: A contrarian macro thesis emerges where US software recurring revenue is viewed as vulnerable to AI displacement, while North Asian "cyclical" industrials are re-rated as secular growth stories due to robotics adoption and hardware demand.
- Geopolitics & Trade: Tensions remain high with US-Iran nuclear talks and potential strikes. Meanwhile, Germany is pivoting pragmatically toward China for trade (Airbus orders), despite geopolitical friction.
- Central Bank Divergence: The Bank of Korea holds rates (2.5%) amidst a tech-led boom, while the BOJ signals a dovish delay in hikes, crushing the Yen and boosting Japanese exporters.
Trade Ideas
Salesforce (CRM) shares plunged after a lukewarm outlook, failing to impress despite meeting estimates. It is explicitly labeled the "poster child for all those fears around AI disruption." The market is pricing in a "terminal value risk" for legacy SaaS (System of Record) companies. The inference is that AI agents will reduce the need for per-seat software licenses, eroding the "recurring revenue" premium these stocks historically enjoyed. SHORT. The rotation out of legacy software is accelerating. Oversold bounce or successful pivot to AI-agent monetization.
The Japanese Prime Minister nominated two BOJ board members seen as "reflationists" (dovish). The Yen weakened to the 156 level immediately. The market infers that rate hikes from the BOJ will be delayed or abandoned to support growth. With the Fed/Global rates staying relatively higher or divergent, the yield differential continues to punish the Yen. SHORT JPY (or LONG USDJPY). Sudden intervention by the Ministry of Finance if the Yen slides too fast (e.g., toward 160).
Nvidia revenue beat forecast ($78B vs estimates), confirming the AI boom is not over. SK Hynix and Samsung (Korea) have order books "completely booked by 2027, possibly to 2028." While NVDA's stock reaction is muted due to high valuation/saturation, the "pick and shovel" hardware providers (memory and foundry) in North Asia are seeing a structural re-rating. The demand from hyperscalers is cascading down to the component level, making these "cyclicals" into secular growth stories. LONG. The hardware cycle has longevity beyond the initial hype. Potential double-ordering or a sudden capex pause by hyperscalers (AMZN, MSFT, GOOGL).
US-Iran nuclear talks are approaching, but the US is simultaneously imposing sanctions and preparing for potential "limited strikes" if talks fail. The binary outcome (Talks Fail -> Strike) creates an asymmetric risk profile for oil and gold. The "fear premium" will bid up these assets as a hedge against conflict escalation in the Middle East. LONG. Standard geopolitical hedge. A surprise diplomatic breakthrough de-escalating tensions rapidly.
Apple has "done nothing" significant in AI compared to peers. They are trying to "retrofit" AI into existing devices rather than building from the ground up. Apple is currently trading as a "Safe Haven" rather than an AI innovator. While they have a massive install base, the lack of a clear, dominant AI strategy (beyond fixing Siri) leaves them vulnerable if the market shifts from "safety" back to "innovation." WATCH. Not a short due to balance sheet/buybacks, but not a long on the AI thesis. A surprise breakthrough in "Visual Intelligence" hardware that drives a super-cycle.
Shuli Ren
Opinion Columnist, Bloomberg
North Asian markets (Korea, Japan) are trading cheaply compared to the US. These countries have low birth rates and are forced to adopt robotics/AI faster. Investors are realizing that US software revenue "may not be recurring" (due to AI disruption), while Asian industrial orders are locked in for years. This breaks the myth that Asian industrials are purely cyclical and unpredictable. Capital is rotating from US Software -> Asian Industrials/Robotics. LONG. A structural portfolio rotation favoring "hard assets" and automation over "soft" recurring revenue. Global recession crushing industrial demand or US tariffs impacting Asian exports.
Stephen Engle
Chief North Asian Correspondent, Bloomberg
German Chancellor Merz is visiting China. Reports indicate China may place an order for ~120 Airbus planes. China has not ordered Boeing jets in years due to trade tensions. European leaders are taking a "pragmatic" approach to trade with China. This diplomatic visit directly benefits Airbus's order book at the expense of Boeing. LONG. Geopolitical arbitrage favoring European industrials. The order fails to materialize or is smaller than expected.
Up Next
This Bloomberg Markets video, published February 26, 2026, features Shery Ahn, Paul Allen, Maribel Lopez, Romy Varghese, Mark Gurman, Shuli Ren, Stephen Engle discussing CRM, JPY, SSNLF, NVDA, TSM, GOLD, AAPL, EWY, EWJ, BOTZ, EADSY. 7 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Shery Ahn, Paul Allen, Maribel Lopez, Romy Varghese, Mark Gurman, Shuli Ren, Stephen Engle · Tickers: CRM, JPY, SSNLF, NVDA, TSM, GOLD, AAPL, EWY, EWJ, BOTZ, EADSY