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In today’s edition,
- Largest F&B chain is from China now!
- Stargate’s AI powerhouse
- Broadcom’s AI bet
- Tencent’s user surge
- Trump’s crypto reserve gamble
Market Snapshot
U.S. stocks posted their worst week since early September, driven by trade policy uncertainty. The Nasdaq fell 3.84% to 18,196.22, the S&P 500 dropped 3.32% to 5,770.20, and the Dow declined 2.50% to 42,801.72, erasing most of its year-to-date gains. Shifting U.S. tariff policies, including exemptions and delays on imports from Canada, Mexico, and China, weighed on investor sentiment.
Economic data showed mixed signals. ISM Manufacturing PMI fell to 50.3%, with new orders contracting at 48.6%, while services activity expanded, with the ISM Services PMI rising to 53.5%. The Fed’s Beige Book reported modest growth but weaker consumer spending, with tariffs a recurring concern. Fed Chair Powell indicated policymakers would wait for clarity before adjusting policy.
The February jobs report showed 151,000 jobs added, slightly below expectations, with the unemployment rate ticking up to 4.1%. Treasuries initially rallied but later reversed. Municipal bonds declined, and high-yield bonds weakened, particularly in energy, as OPEC announced April supply increases. Markets remain in “wait-and-see” mode as trade policy uncertainty continues to drive sentiment.
Stock market closing data for the week of Mar 3rd to Mar 7th, 2025
News Summaries
Mixue Ice Cream and Tea has become the world’s largest food-and-beverage chain by store count, overtaking McDonald’s and Starbucks with 45,000 locations—more than doubling in three years. The Chinese company, famous for its $0.83 ice creams and franchise-friendly model, raised over $400 million in a Hong Kong IPO. It closed 43% above its listing price, reaching a $10 billion valuation. Its success comes from aggressive growth in smaller cities, low franchise fees, and a pop-culture presence with its Snow King mascot and catchy jingle. With 90% of its stores in China, Mixue plans to grow further but risks cannibalising its own locations. Its ultra-low pricing appeals to China’s weakened economy. However, sustaining global growth will require more than just affordability; it must adapt to consumer behaviour outside China.
OpenAI and Oracle are setting up a massive AI data center as the first step in their $100 billion Stargate venture. By 2026, the site is expected to house 64,000 Nvidia GB200 chips, with 16,000 installed by this summer. Oracle is handling the infrastructure and operations, while OpenAI drives the AI workload. The scale is significant—Nvidia’s older B200 chips range from $30,000 to $40,000 each, meaning just the initial batch could cost billions. This push comes amid an AI infrastructure race, with Meta aiming for computing power equal to 600,000 Nvidia H100s and xAI striking a $5 billion deal for AI servers. Stargate’s expansion beyond Texas is already in motion, with Pennsylvania, Wisconsin, Oregon, and Salt Lake City under consideration. The scale of AI demand is clear, but with chip prices high and supply chains stretched, the bigger question is whether AI infrastructure can keep pace with the growing hunger for compute power. These data centers are not just about AI—they’re the foundation for what AI will be capable of in the next decade.
Broadcom’s strong Q1 results reflect continued AI-driven demand, with revenue rising 25% to $14.92 billion and AI chip sales projected at $4.4 billion for the current quarter. Its semiconductor division grew 11% to $8.21 billion, while software revenue hit $6.7 billion, both beating projections. Broadcom is expanding beyond its three known hyperscaler clients (Google, Meta, and ByteDance), adding four more, with two nearing revenue generation. The company also reiterated that U.S. export restrictions won’t impact existing AI clients. While Marvell Technology saw a 20% drop post-earnings, Broadcom’s focus on AI-specific custom semiconductors and its growing software business give it a broader base. The real story here is Broadcom’s ability to sustain AI demand while navigating shifts like Apple’s move away from its wireless chips. As AI infrastructure spending grows, Broadcom’s position looks solid, but investor sentiment will be shaped by its ability to scale beyond its current $60B-$90B market forecast for 2027. AI compute demand is still expanding, but efficiency and customization will define the next phase. Broadcom’s bet on tailored AI silicon could be a real differentiator.
Tencent’s Yuanbao AI chatbot is now China’s most downloaded iPhone app, surpassing DeepSeek and reflecting the growing AI race. AI bots dominate the rankings, with Tencent, DeepSeek, and ByteDance’s Doubao in the top five. Tencent has embedded DeepSeek R1 into WeChat search and gaming, while also launching a Hunyuan Turbo model it claims is faster. Alibaba, benchmarking against DeepSeek, is pouring $53B into AI, yet Tencent’s vast WeChat ecosystem (1.4B users) gives it a distribution edge. The real challenge? Monetization. AI services remain free, with open-source adoption accelerating. Tencent has momentum, but turning AI engagement into revenue will define the next phase.
From the World of Crypto
Trump’s plan for a strategic cryptocurrency reserve is causing debate. The U.S. government doesn’t own all the tokens he wants. Currently, the government holds about $16.4 billion in Bitcoin and $400 million in other cryptocurrencies, mostly from seized assets. However, it has none of the XRP, SOL, or ADA that Trump wants to include. If this reserve goes ahead, the government may need to buy these tokens, possibly using taxpayer money. Given the ongoing deficit, that’s a hard sell, as seen in states like Montana and Wyoming, where similar plans failed.
Then there’s the issue of crypto’s wild price swings. SOL has dropped 57% from its January high, Bitcoin is down 28% since Trump’s inauguration, and Ether has lost over 50% since December. Even some crypto supporters are doubtful. They say Bitcoin makes sense in a government reserve, but adding altcoins complicates things. Others question why these specific tokens were chosen while others, like Avalanche, were excluded. Without clear criteria, this could become a game of lobbying, not strategy.
Additionally, legal battles could arise. Trump might justify purchases under national security or financial stability rules. However, experts believe those moves would likely face immediate court challenges. So, will this plan actually happen? It’s hard to tell. What’s clear is that Washington’s stance on crypto is changing quickly. Whether this reserve succeeds or fails, the debate about the government’s role in digital assets is just beginning.
Community Insights: What Investors Are Discussing
The Vested Community is actively discussing big tech stocks, Tesla’s valuation, and crypto market trends. Here’s what members are watching:
🚗 Tesla’s Potential & Risks
Investor Aryan sees Tesla at $297.20 as an interesting long-term bet, especially if AI and autonomous driving take off and Musk’s 10x earnings prediction holds. However, the Q4 earnings miss and brand perception pose short-term risks. If the Fed cuts rates, Tesla could surge, but macroeconomic tightening might offer a better entry point. Aryan prefers dollar-cost averaging over going all-in.
📈 Big Tech & Small Caps
Investor Karan believes $NVDA, $MSFT, and $GOOGL remain strong plays despite stretched valuations. He suggests that if the Fed aggressively cuts rates, small-cap stocks could finally rebound.
🔥 Crypto’s Wildcard Factor
Karan also highlights the crypto market’s volatility, with Bitcoin surging on halving hype. He points to $COIN and $MSTR as reasonable exposure plays but sees mining stocks like $MARA as the real high-risk, high-reward move.
Have an opinion on these investment plays? Drop a comment and let the community know!
