Nvidia Tepid After Earnings; US-Iran Talks | Horizons Middle East & Africa 2/26/2026
Speakers
Summary
- Nvidia Stalls, Suppliers Rally: Despite beating revenue and data center forecasts, NVDA stock is trading tepidly/sideways. The "AI trade" is rotating from the poster child (NVDA) to the upstream supply chain, specifically Korean memory chip makers (Samsung, SK Hynix) which are hitting record highs due to HBM/DRAM shortages.
- Asian FX Breakout: The Chinese Yuan (CNY) is strengthening significantly (lowest USD/CNY fix in 3 years), dragging other Asian currencies (KRW) higher and weakening the USD. This is driven by China's comfort with a stronger currency and capital inflows into Asian equity markets.
- South African Turnaround: South Africa’s latest budget signals a fiscal turning point with narrowing deficits and peaking debt, prompting a rally in the Rand (ZAR) and bonds, with potential credit rating upgrades on the horizon.
- Geopolitical Binary Events: Markets are pricing in resilience in Israel despite looming US-Iran nuclear talks (Geneva) and potential US strikes. Meanwhile, a clash is brewing between the Pentagon and Anthropic over AI model access/safety.
Trade Ideas
NVDA beat revenue and data center estimates, but the stock reaction was muted/negative. 90% of tech companies are beating earnings, yet sentiment is overwhelming the positive data. This signals "exhaustion" in the momentum trade. When a beat is treated as a miss (or non-event), the risk/reward skews unfavorable. The stock is stuck in a trading range and failing to break out on good news. WATCH. Wait for a breakout or a pullback to better valuation levels; the "easy money" phase is over. Re-acceleration of growth beyond the "loftiest" projections could reignite the rally.
The daily Dollar-Yuan fix was set at the lowest level in three years. China seems comfortable with a stronger currency to attract foreign flows. A strong Yuan acts as a magnet for other Asian currencies (like the Won). Combined with uncertainty regarding US tariffs (Supreme Court ruling/Trump actions), the structural bid for the USD is fading in favor of Asian FX. SHORT USD against an Asian basket (CNY, KRW). A sudden geopolitical escalation (Iran/US) could trigger a "flight to safety" bid for the USD.
While NVDA is trading sideways despite an earnings beat, Korean suppliers like Samsung and SK Hynix are performing exceptionally well, driving the KOSPI to record highs. The market has fully priced in NVDA's growth, leading to "investor shrugs." However, the bottleneck for AI compute is now memory (DRAM/HBM). These Korean firms are the "untouchable" oligopoly suppliers for this shortage, offering better relative value and insulation from the "AI scare trade." LONG Korean memory names as the "Pick and Shovel" play of the current AI cycle phase. A sudden drop in global AI capex spending or semiconductor cycle downturn.
The Pentagon is demanding full access to Anthropic's AI models; Anthropic is refusing on safety grounds. The US may use the Defense Production Act to force compliance. This represents a major regulatory/sovereign risk for private AI labs. If the government seizes access or dictates terms, it alters the valuation models and operational independence of these firms (and their backers like AMZN/GOOG). WATCH for regulatory precedent that could spill over to other AI Model Providers. N/A (Private asset, monitoring for sector impact).
Trading Structurer
RMB (Rand Merchant Bank)
South Africa's budget shows the deficit narrowing to 3.7% and debt-to-GDP peaking at 77.3% (lower than expected). The Finance Minister is anchoring debt. This marks a credible fiscal "turning point" after years of deterioration. The market is rewarding this discipline with a stronger Rand and lower yields. Potential credit rating upgrades provide a future catalyst. LONG ZAR and South African Equities/Bonds. Execution risk on the budget targets or global risk-off sentiment hitting Emerging Markets.
Min Min Low
China Correspondent, Bloomberg
A supply disruption in Zimbabwe (export issues) has caused a jump in lithium prices. Supply shocks in critical minerals historically lead to sharp, short-term price spikes in the underlying commodity and related equities, particularly Chinese downstream clients. LONG Lithium exposure. If the Zimbabwe disruption is resolved quickly, the risk premium will evaporate.
Up Next
This Bloomberg Markets video, published February 26, 2026, features Joumanna Bercetche, Mark Cranfield, Min Min Low, Laura Davison, Trading Structurer discussing NVDA, USD, SSNLF, EWY, ANTHROPIC, ZAR, EZA, LITHIUM. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Joumanna Bercetche, Mark Cranfield, Min Min Low, Laura Davison, Trading Structurer · Tickers: NVDA, USD, SSNLF, EWY, ANTHROPIC, ZAR, EZA, LITHIUM