Yet Another Relevant Geopolitical Event (NOTW#81)

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Both indices were up slightly this week, a week marked by Nvidia’s earnings. We had some pretty relevant news over the weekend, so the landscape might very well change significantly next week. We’ll see. There was a lot of relevant news for portfolio companies as well.

Without further ado, let’s get on with it.

Articles of the week

I published two articles this week, both earnings digests. The first one was my Deere Q1 2026 earnings analysis.

The company reported good (not spectacular) earnings, but the market decided to send the stock to ATHs. I explain why in the article and whether Deere is still a good risk/reward today.

The second article of the week was Topicus’ Q4 and 2025 earnings digest.

The company reported strong earnings, driven by record capital deployment. The question remains whether AI will “destroy” the business, and while (spoiler alert) there’s no answer yet, I provide some indicators that might point to Topicus doing well in the AI era.

Without further ado, let’s see what the markets did this week.

Market Overview

Both indices were slightly up this week:

The week was marked by Nvidia’s earnings. The company reported earnings on February the 25th and, even though I don’t hold it, I must say that the numbers continue to be spectacular. Revenue for the quarter was $68.1 billion, up 73% YoY. This not only significantly beat the market’s expectations significantly but it’s also impressive in its own right. I mean…this is a company generating $68 billion in quarterly revenue growing 73%. I don’t know if it’s unprecedented but it definitely feels like it. Guidance was also spectacular and significantly beat expectations, but what did Nvidia’s stock do? Contrary to what one might have thought, it dropped pretty significantly:

Nvidia’s earnings bring some interesting insights for investors (not that we are discovering anything new here)…

1. The market’s consensus expectations and what has been priced into the stock are two very different things. Many believe that both things are related, but they don’t necessarily have to be. A lot of people scratch their heads when a stock drops after significantly beating the consensus, but it happens pretty often.

2. No matter how followed a company is, the consensus can get it very wrong. Nvidia has no analyst shortage and still continues to beat every quarter.

3. Earnings stock price reactions are completely unpredictable (probably driven by both things above)

I know that most of these things are logical and already well known by most, but they are worth keeping in mind nonetheless. And I mean, these things are pretty much irrelevant over the long term. I’m sure that if Nvidia continues to post these kinds of numbers, its investors will end up in a pretty good spot going forward. The stock, by the way, is up 55% over the last year.

In other news, you might have seen that the US and Israel decided to start an operation in Iran. The goal is to end with the Ayatollah regime and (supposedly) allow the Iranian population to choose their fate. I don’t have much to comment on here to be honest. A lot of people are claiming that the market will drop considerably this coming week, whereas others believe it’ll be the opposite because Iran is less of a threat after this weekend’s events. I have absolutely no clue, but I do believe (and this is something that I’ve shared in other NOTWs) that the fact that all the relevant geopolitical events take place when the stock market is closed is not a coincidence. I do believe Trump wants to carry out his political agenda while involving the market the least he can. Everything started on Saturday, and by Sunday the Ayatollah Jamenei was already confirmed dead.

What does this mean for markets? Who knows, but Trump is surely worried about the stock market, which means TACO (Trump Always Chickens Out) is as alive as it has ever been. Even though the current Ayatollah is dead, some people claim that this is going to go on for long. I have no clue, but I do know one thing for sure: X is about to become full of geopolitical experts! Looking forward to what all the market forecasters will say next week. You can’t go wrong being a market forecaster, it must be the best job in the world. You sound super intelligent when you speak because people believe you actually know what you are talking about. If you get it wrong, nobody will remember. If you get it right, you can market the hell out of it. What’s not to like??

Please note that since 2019 we’ve had…

• A global pandemic

• Close to double digit inflation

• A war in Ukraine

• Rising tensions in the Middle East

…and countless more geopolitical events, and still, the S&P 500 has delivered a 16.8% CAGR since the first of January of 2019…do with this information what you will:

The industry map was mixed this week, with the semiconductor industry and banks mostly red:

Source: Finviz

The fear and greed index remained at the same level as last week:

Source: CNN

My buys and sells this week

This week I added to several positions and also trimmed one. I started adding to one position this week that I have not added to since June last year due to its incredible performance. One thing that I’ve learned over the past few years is that patience is a key trait of any investor. Why? Because Mr.Market always gives you an opportunity eventually: