Market Watch #1: Defence Stocks Surge, Nvidia Earnings Loom, Rare Earth Squeeze Tightens
Defence stocks led the week with Hanwha +12.4%, BAE +10.0%, and Rheinmetall +8.2%. Nvidia rallies 3.8% ahead of Q4 earnings. Chinese tech dips. Light rare earths extend their supply squeeze.
Week of 16–20 February 2026
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Indices
The Nasdaq gained 1.9% last week, its best week since late January. The S&P 500 rose 1.1% to close at 6,909. The rally was driven by renewed AI chip optimism ahead of Nvidia's Q4 FY2026 earnings (due 25 February) and the Supreme Court's decision to strike down broad emergency tariffs, easing pressure on consumer-facing sectors.
AI & Compute
| Stock | Ticker | Close (20 Feb) | Weekly Change |
|---|---|---|---|
| Nvidia | NVDA | $189.82 | +3.8% |
| AMD | AMD | $200.15 | -3.5% |
| TSMC (ADR) | TSM | $370.54 | +1.1% |
| Broadcom | AVGO | $332.65 | +2.3% |
| Super Micro | SMCI | $32.42 | +6.2% |
Nvidia led the AI chip pack with a 3.8% gain ahead of Tuesday's earnings, while AMD gave back 3.5% on profit-taking after its January rally. Super Micro surged 6.2%, rebounding from recent lows as data centre demand expectations firmed. TSMC hit record monthly sales in January (NT$401.26 billion, +37% YoY), reinforcing the AI chip demand narrative. All eyes now on Nvidia's Q4 report on 25 February, with Wall Street consensus expecting $65.6 billion in quarterly revenue, up 65% year over year.
Humanoids & Robotics
| Stock | Ticker | Close (20 Feb) | Weekly Change |
|---|---|---|---|
| Tesla | TSLA | $411.82 | -1.3% |
| Hyundai Motor (KRX) | 005380.KS | ₩509,000 | +2.0% |
Tesla dipped 1.3% in a quiet week for the stock, though attention on the Optimus programme remains high. The Fremont factory conversion from Model S/X to Optimus production remains on track for Q2 2026. Hyundai gained 2.0% in Seoul, with growing investor interest in Boston Dynamics under Hyundai's ownership. Meanwhile, China's Spring Festival Gala showcased Unitree, MagicLab, Galbot, and Noetix humanoid robots performing martial arts and parkour, marking a significant leap from 2025's demonstrations.
Chinese AI & Tech
| Stock | Ticker | Close (20 Feb) | Weekly Change |
|---|---|---|---|
| Alibaba (ADR) | BABA | $154.45 | -0.8% |
| Baidu (ADR) | BIDU | $135.86 | -0.8% |
| Tencent (HK) | 0700.HK | HK$522.00 | -1.9% |
| SMIC (HK) | 0981.HK | HK$67.70 | -3.8% |
A red week across Chinese tech. SMIC fell 3.8%, the worst performer in the group, as tightening US export controls continue to weigh on the chipmaker's outlook. Tencent dropped 1.9% while Alibaba and Baidu both slipped 0.8%. Alibaba reports Q3 earnings on 23 February, with Pentagon blacklisting concerns adding to sentiment pressure. Alibaba recently unveiled Qwen3.5, escalating the Chinese AI model race as the sector shifts toward AI agents.
Defence & Aerospace
| Stock | Ticker | Close (20 Feb) | Weekly Change |
|---|---|---|---|
| Rheinmetall (XETRA) | RHM.DE | €1,740.00 | +8.2% |
| BAE Systems (LSE) | BA.L | £21.65 | +10.0% |
| L3Harris | LHX | $356.14 | +3.1% |
| Hanwha Aerospace (KRX) | 012450.KS | ₩1,242,000 | +12.4% |
Defence stocks dominated the week. Hanwha Aerospace surged 12.4% in Seoul, BAE Systems rallied 10.0% in London, and Rheinmetall gained 8.2% in Frankfurt. The sector is being driven by the structural European rearmament cycle and increased defence spending commitments. L3Harris added 3.1%, keeping pace with the broader trend. These are not short-term trades: the defence sector is repricing for a multi-year spending cycle that shows no sign of slowing.
Digital Infrastructure
| Stock | Ticker | Close (20 Feb) | Weekly Change |
|---|---|---|---|
| ASML | ASML | $1,469.59 | +4.5% |
| Arista Networks | ANET | $132.79 | -6.2% |
| Vertiv | VRT | $243.75 | +3.9% |
ASML climbed 4.5% after reporting record Q4 2025 bookings of €13.2 billion and guiding 2026 revenue at €34–39 billion. Vertiv gained 3.9%, benefiting from the same AI-driven data centre capital expenditure cycle. Arista was the outlier, falling 6.2% as networking stocks took a breather after a strong January. AI-driven data centre capex continues to support the digital infrastructure chain broadly.
Critical Minerals & Commodities
| Commodity | Price | Change (Feb) | Note |
|---|---|---|---|
| Lithium Carbonate (China) | ~CNY 145,000/t | -19% from Jan peak | Pulled back from 2-year high of CNY 180,000 hit 26 Jan |
| Praseodymium-Neodymium Oxide | CNY 748,700/t | +11% MoM | Leading rare earth gainer; magnet demand strong |
| Dysprosium Oxide | CNY 1.33M/t | -10.7% MoM | Heavy rare earth correction after sharp 2025 rally |
| Terbium Oxide | CNY 6.10M/t | -5.0% MoM | Heavy rare earths under pressure |
| Rare Earth Price Index (China) | 242.70 | +11.8% since end-2025 | Light rare earths driving gains |
Lithium pulled back aggressively from the CNY 180,000 peak hit on 26 January, as markets recalibrated energy storage demand expectations. Light rare earths remain strong: praseodymium-neodymium oxide surged 29% since late December 2025, driven by EV magnet demand and tighter Chinese supply after 27 mining permits were cancelled in Jiangxi province. Heavy rare earths are correcting, with terbium and dysprosium under pressure as downstream buyers hold off procurement.
Antimony prices remain elevated following China's 2025 export controls. Tungsten is also under watch after being classified as a strategic material.
The Signal
Nvidia's earnings on 25 February will set the tone for AI-related stocks across every sector tracked by Tech Cold War. But the bigger story this week is defence: Hanwha up 12.4%, BAE up 10.0%, Rheinmetall up 8.2%. These are not momentum trades. This is capital repricing for a world where European and allied defence spending is structurally higher for the foreseeable future. The rare earth supply squeeze, meanwhile, continues to tighten underneath it all.
Market Watch is Tech Cold War's weekly markets briefing, tracking the stocks and commodities at the centre of the technology competition. Published every Monday. Subscribe to receive it directly.
Sources
Trading Economics, lithium carbonate futures prices (tradingeconomics.com)
SunSirs, rare earth prices as of February 2026 (sunsirs.com)