The S&P 500 index futures fell nearly 1% at the open before slowly recovering, with market attention focused on the upcoming earnings reports from four of the "Tech Giants"—Microsoft, Meta, Tesla, and Apple.

Meanwhile, the Federal Reserve will hold its first interest rate meeting of the year, and the cryptocurrency market has also shown unusual movements, with gold prices soaring above $5,000 per ounce, while Bitcoin remains stagnant around $87,000.

Currently, the valuation of the S&P index has reached 22 times future earnings, significantly higher than the long-term average, which means that the tech giants must deliver impressive earnings reports to support such high valuations.

1. Market Overview

● U.S. stock futures showed caution at the beginning of this week, with the market atmosphere clearly tense. The S&P 500 index futures fell by 0.2%, Nasdaq futures dropped by 0.3%, and Dow futures also decreased by 0.2%.

● This cautious sentiment is not unfounded; Japanese Prime Minister Fumio Kishida stated that he would resign immediately if the ruling coalition fails to secure a majority in the House of Representatives elections, raising concerns about political stability in Asia.

● Since the beginning of this month, financial markets have experienced a truly wild start, with ongoing geopolitical tensions, the dollar continuing to be under pressure, and precious metals consistently rising, showing a parabolic trend.

2. Earnings Report Focus

● The highlight of this week's earnings reports is undoubtedly the performance of the tech giants. According to Wall Street analysts, Tesla's fourth-quarter revenue is expected to be $2.449 billion, with an operating profit of $1.05 billion and a non-GAAP earnings per share of $0.44.

● These forecasts are based on data from 19 investment firms, and Tesla has also announced expectations for 2026: revenue of $104 billion and non-GAAP earnings per share of $2.03.

● Microsoft performed impressively in its recent earnings report, with its fourth-quarter revenue for fiscal year 2025 growing by 18% year-on-year to $76.44 billion, far exceeding market expectations. Net profit increased by 23.6% year-on-year to $27.23 billion, with adjusted earnings per share of $3.65, also higher than market expectations. Its intelligent cloud business, particularly Azure cloud services, saw revenue growth of 26% year-on-year, reaching $29.88 billion.

3. Analysis of Tech Giants

● Apple is at a critical moment. Goldman Sachs analysts recently raised Apple's target price from $279 to $320, while also increasing their average earnings per share forecast for fiscal years 2026 to 2028 by 3%.

● Apple's management has guided for a revenue growth of 10% to 12% in the first quarter of fiscal year 2026, with iPhone revenue expected to achieve double-digit growth and service revenue growing by about 14%. These optimistic forecasts indicate that iPhone demand remains strong, and the performance of the service business has exceeded expectations.

● Microsoft has demonstrated how artificial intelligence can translate into actual profits. The company's capital expenditures for the fourth quarter of fiscal year 2025 increased by 27% year-on-year to $24.2 billion, surpassing market expectations.

● At the same time, Microsoft expects its capital expenditures for this quarter to exceed $30 billion, setting a historical high with a year-on-year increase of over 50%. Notably, Microsoft is a major buyer of Nvidia chips, with 47% of its capital expenditures directed towards Nvidia.

Meta Platforms is facing a tension between AI investments and profitability. The company reported a 26% year-on-year revenue growth in the third quarter, exceeding market expectations, but costs surged by 32%, squeezing profits.

Additionally, the company recorded a one-time expense of $16 billion due to the U.S. government's "Big Beautiful Bill," bringing net profit down to $2.71 billion.

4. The Hidden Connection Between Tech Stocks and Bitcoin

● Bitcoin price trends show a positive correlation with the Nasdaq index. Since 2023, Bitcoin prices have closely followed the trends of the Nasdaq index and gold; since 2024, its trends have also begun to align with the Hang Seng Tech Index.

● This correlation indicates that Bitcoin has become an important indicator of global liquidity and risk appetite. In 2025, the total market capitalization of cryptocurrencies fell by 8.6%, and Bitcoin prices dropped by 6.1%, sparking discussions about whether Bitcoin's four-year cycle is still valid. The U.S. Trust and Clearing Company plans to begin hosting and recording tokenized securities on a pre-approved blockchain starting in the second half of 2026.

● This means that tokenized stocks are expected to trade alongside traditional stocks on the Nasdaq, which will further deepen the connection between tech stocks and the cryptocurrency market.

5. Transformation of Mining Operations and AI Power Demand

In the third quarter of 2025, the mining costs of U.S. listed companies, including depreciation, have risen to $112,000, exceeding the current Bitcoin price.

This economic reality has prompted cryptocurrency mining companies to begin transforming, utilizing their already powered and high-bandwidth computing infrastructure to shift towards AI cloud service businesses.

Mining companies located near metropolitan areas have power capacity, with electricity costs generally between 3 to 5 cents, making them naturally suited for AI data center operations. According to statistics, 14 major U.S. listed mining companies are expected to reach a power capacity of 15.6 GW by 2027.

The business model for these companies' transformation mainly involves cloud computing leasing and IDC power leasing, directly seizing the opportunity presented by the global growth in AI computing demand.

As Tesla's stock price rose by 4.15% to $449.36 before the earnings report, the market has begun to react to the earnings reports of tech giants. Microsoft saw a post-market surge of 8.28%, joining Nvidia in the exclusive $4 trillion market cap club.

Storage giant SanDisk's stock price has skyrocketed nearly 500% since its spin-off from Western Digital in 2025, and after strong earnings were announced, it surged over 10% in after-hours trading. Gold prices have surpassed $5,000 per ounce, seen as a "durable hedge tool."

The earnings report data is just the tip of the iceberg, while the much larger wave of AI investments, the storage supercycle, and the transformation of traditional mining operations into AI data centers are the true underlying forces determining the future direction of the market.

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