The S&P 500 index futures slowly recovered after opening down nearly 1%, with market attention focusing on the upcoming earnings reports of four '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 is also showing volatility, with gold prices soaring to over $5000 per ounce, while Bitcoin remains stagnant around $87000.
The current valuation of the S&P index has reached 22 times future earnings, far above the long-term average, which means that tech giants must deliver impressive earnings to support such a high valuation.
I. Market Overview
● US stock futures showed cautious performance at the beginning of this week, with a noticeably tense market atmosphere. S&P 500 futures fell by 0.2%, NASDAQ futures fell by 0.3%, and Dow futures also fell by 0.2%.
● This cautious sentiment does not come from nowhere; Japanese Prime Minister Fumio Kishida stated that if the ruling coalition fails to secure a majority in the House of Representatives elections, he will resign immediately, raising concerns about political stability in Asia.
● Since the beginning of this month, the financial markets have experienced a truly wild start, with ongoing geopolitical tensions, the US dollar continuing to be under pressure, while precious metals have continued to rise, showing a parabolic trend.
II. Earnings Report Focus
● The highlight of this week's earnings report is undoubtedly the performance of tech giants. According to Wall Street analysts, Tesla's revenue for Q4 is expected to be $2.449 billion, with operating profit of $1.05 billion and non-GAAP earnings per share of $0.44.
● These forecasts are based on data from 19 investment firms, and Tesla has also announced its expectations for 2026: revenue of $104 billion and non-GAAP earnings per share of $2.03.
● Microsoft delivered impressive results in its recent earnings report, with Q4 revenue for fiscal year 2025 growing 18% year-over-year to $76.44 billion, far exceeding market expectations. Net profit grew 23.6% year-over-year to $27.23 billion, with adjusted earnings per share of $3.65, also above market expectations. Its intelligent cloud business, especially Azure cloud services, saw revenue grow 26% year-over-year to $29.88 billion.
III. 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 earnings per share forecasts by an average of 3% for the fiscal years 2026 to 2028.
● 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 to grow by about 14%. These optimistic forecasts indicate that iPhone demand remains strong, and the performance of the service business has also exceeded expectations.
● Microsoft has demonstrated how artificial intelligence can be transformed into actual profits. The company's capital expenditures for Q4 of fiscal year 2025 grew 27% year-over-year to $24.2 billion, exceeding market expectations.
● Meanwhile, Microsoft expects its capital expenditures this quarter to exceed $30 billion, setting a new historical high with a year-over-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 investment and profitability. The company's revenue for Q3 grew 26% year-over-year, exceeding market expectations, but costs increased by as much as 32%, squeezing profits.
At the same time, the company recorded a one-time expense of $16 billion due to the US government's "Big Beautiful Bill," bringing net profit down to $2.71 billion.
IV. The Hidden Connection Between Tech Stocks and Bitcoin
● The price trend of Bitcoin shows a positive correlation with the NASDAQ index. Since 2023, Bitcoin's price has been largely in line with the trends of the NASDAQ index and gold; since 2024, its trend has 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 value of cryptocurrencies decreased by 8.6%, and the price of Bitcoin dropped by 6.1%, sparking discussions about whether Bitcoin's four-year cycle rule is still valid. The US Trust and Clearing Company plans to start hosting and recording tokenized securities on a pre-approved blockchain 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 crypto market.
V. Mining Transformation and AI Power Demand
In the third quarter of 2025, the mining costs for US-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, leveraging their powered and high-bandwidth computing infrastructure to shift towards AI cloud service businesses.
Mining companies located near metropolitan areas have power capacities, with electricity costs generally between 3 to 5 cents, making them naturally suited for AI data center operations. Statistics show that the power capacity of 14 major US-listed mining companies is expected to reach 15.6GW by 2027.
The business models of these companies' transformations mainly involve cloud computing leasing and IDC power leasing, directly capturing the opportunity presented by the global growth in AI computing power demand.
With Tesla's stock price rising 4.15% to $449.36 ahead of the earnings report, the market has begun to react to the earnings reports of tech giants. Microsoft surged by as much as 8.28% in after-hours trading, joining the $4 trillion market cap club dominated by Nvidia.
The storage giant SanDisk's stock price has skyrocketed nearly 500% since its spin-off from Western Digital in 2025, and surged over 10% in after-hours trading following strong performance announcements. Gold prices have surpassed $5,000 per ounce, regarded as a "durable hedge tool."
Earnings data is just the tip of the iceberg; the much larger wave of AI investment, the storage supercycle, and the transformation of traditional mines into AI data centers are the real deep drivers determining the future market direction.
