To The Moon

Last Week's Recap

The US Market - S&P 500 near record high

• The major U.S. stock indexes closed out the week with gains, with the S&P 500 rising roughly 1.5%, nearing its all-time high, while the Nasdaq surged 2.6%. Investors appeared to find silver linings in seemingly negative news, including inflation data and tariffs announced by former President Trump.

• A significant portion of the week’s rally came on Thursday, after Trump revealed plans for new "reciprocal" tariffs, though these measures won’t take effect until at least April.

• Traders have been flocking to Chinese tech stocks, driven by the sector's growing artificial intelligence potential. The China Internet ETF (KWEB) has surged nearly 22% this year alone. JPMorgan strategist Rajiv Batra highlighted positive fund inflows into Chinese internet stocks, with a notable spike following the DeepSeek event. Additionally, Morgan Stanley's Laura Wang and other strategists noted that global investors are reassessing China’s appeal in the tech and AI sectors.

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The US Sectors & Stocks - AppLovin、Intel and Upstart Shine

• The broader market ended the week with 9 out of 11 sectors in the green, with the technology sector leading the way, up more than 3%. Apple (AAPL) was a major driver of the gains, surging 7.5% after a series of announcements. Apple CEO Tim Cook revealed plans for a new product, possibly a fourth-generation iPhone SE with AI capabilities, while confirming a partnership with Alibaba to integrate the company’s AI technology into iPhones in China, according to Alibaba Chair Joe Tsai.

• Intel (INTC) jumped 23.6% amid speculation that the chipmaker might strike a deal with TSMC. Analysts from Baird suggested Intel could spin off its foundry business into a new U.S.-based chipmaking entity in collaboration with TSMC.

• AppLovin (APP) saw its stock soar 36% after smashing Q4 earnings expectations. The company reported a 253% year-over-year jump in EPS and a 44% revenue increase, topping $1.37 billion. AppLovin's strong performance was attributed to its advertising strength and expanding margins, and its plans to diversify beyond gaming into e-commerce.

• Airbnb (ABNB) jumped 19.6% after reporting robust fourth-quarter results, bolstered by strong international travel demand, particularly from Chinese consumers visiting Southeast Asia. Similarly, Monday.com (MNDY) surged 23% following a 66% earnings jump and strong revenue growth of 32% to $268 million, with positive guidance for 2025 driven by AI initiatives.

• Upstart Holdings (UPST) reported a surprise profit, with EPS soaring and revenue increasing by 56% to $219 million, sending shares up 20% to a 52-week high. The AI-focused lender also raised its 2025 guidance.

• Super Micro Computer (SMCI) missed estimates for its preliminary Q2 results and lowered its fiscal 2025 sales outlook. However, the company guided fiscal 2026 revenue to $40 billion, far exceeding expectations, fueled by anticipated AI server sales with Nvidia (NVDA) Blackwell processors.

• Roku (ROKU) surged to a 52-week high after reporting a smaller-than-expected Q4 loss and a 22% revenue increase to $1.2 billion. User growth also exceeded expectations, and the streaming platform maintained guidance for Q1 and full-year 2025 revenue, while forecasting operating profitability in 2026.

• Reddit (RDDT) posted a 227% increase in EPS and a 71% rise in revenue, surpassing estimates. Despite these strong numbers, the social media platform’s stock dropped after daily active user growth fell short of expectations. CEO Steve Huffman pointed to volatility in user acquisition due to a change in Google’s search algorithm but remains optimistic with a strong Q1 revenue forecast.

Hong Kong Market - HSI continued to surge

• Hong Kong stocks wrapped up their best weekly gain streak in two years, with the Hang Seng Index (HSI) soaring 7% last week and notching its fifth consecutive weekly gain. The Hang Seng Tech Index (HSTECH) saw a massive 24% surge in 2024, surpassing its October peak. This rally was driven by expectations of gradual tariff changes and the growing excitement around the DeepSeek AI boom.

• Alibaba Group Holding reached a three-year high, while Tencent Holdings gained over 10% last week. In a key development, China’s top tech founders and CEOs are expected to attend an entrepreneurs' meeting chaired by President Xi Jinping this week, fueling optimism across the sector.

Singapore Market - STI retreated from a record high

• The Singapore stock market closed the week in positive territory after hitting a record high earlier in the week. The country also revised its 2024 GDP growth forecast upward to 4.4%, above the initial estimate of 4%.

• DBS, Singapore's largest bank, surged to a new record high on the back of higher margins and capital return plans. The bank reported Q4 net profit of S$2.62 billion ($1.9 billion), up from S$2.39 billion a year earlier, driven by strong commercial lending and market trading. DBS also raised its 2025 net interest income forecast to slightly exceed last year’s S$15.04 billion ($11.1 billion), a notable upgrade from previous expectations.

Australian Market - ASX 200 reset a record closing high

• The Australian stock market hit a record closing high on Friday, brushing off concerns around U.S. reciprocal tariffs and a slight pullback in Commonwealth Bank shares. The S&P/ASX 200 index gained 0.5% for the week, while the Australian dollar climbed to a two-month high of US63.28¢ against the greenback.

• Commonwealth Bank of Australia reported a modest rise in first-half profit, helped by a recovering economy and lower loan impairment charges. This led to a boost in its share price, helping the bank and the broader market to push higher.

The Week Ahead

Macro Factors - China tech stocks booming

• U.S stock market will be closed on Monday for Presidents' Day. Federal Reserve meeting minutes, the latest fourth-quarter earnings and China rally will highlight the week.

• A potential meeting this week between Chinese President Xi Jinping and Alibaba co-founder Jack Ma could serve as the next catalyst for China’s stock market rally, following a sharp surge in tech shares. Sources familiar with the matter say that Ma, along with other leading entrepreneurs, has been invited to meet with top Chinese officials.

• “A high-profile endorsement like this sends a strong signal that China’s government sees the tech industry as a key engine for future economic growth,” said Robert Lea, an analyst at Bloomberg Intelligence. Goldman Sachs Strategists see another 16% rise to the MSCI China Index. Moreover, they signed a target price for the CSI 300 Index from 4,600 to 4,700.

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Earnings

• Earnings season will roll on, headlined by quarterly reports from Alibaba (BABA) and Walmart (WMT). AI software company appears alive and well in markets, More related companies will be on focus, including Unity (U) and Block (XYZ).