Markets of the Week: Bitcoin, Big Tech, and Geopolitics
Key market events: February 2–6 Walmart's (WMT.US) market capitalization surpassed $1 trillion for the first time in history after hitting an all-time high on February 3. Meanwhile, Bitcoin fell below $70,000, increasing pressure on crypto companies, and legendary investor Michael Burry warned of a 'death spiral' risk for the entire crypto ecosystem.
Key Market Events: February 2–6
Walmart's (WMT.US) market capitalization surpassed $1 trillion for the first time in history after hitting an all-time high on February 3. Meanwhile, Bitcoin fell below $70,000, increasing pressure on crypto companies, and legendary investor Michael Burry warned of a 'death spiral' risk for the entire crypto ecosystem. At the same time, the European Union is preparing a proposal to the U.S. for a strategic partnership in critical minerals to reduce dependence on China.
Let's break down the key events of the week in order.
Alphabet Reports Stronger Than Expected, but Market Concerned About AI Spending
Alphabet (GOOGL.US) released a strong report for Q4 2025:
- revenue increased by 18% to $113.83 billion;
- net income rose by 30% to $34.46 billion.
The main driver was Google Cloud: the segment's revenue surged by 48%, and the operating margin reached 30.1%. The company noted that investments in AI are already yielding returns and supporting growth in key business areas.
However, after the report, Alphabet's shares fell by about 3% in after-hours trading. The reason is the forecast for capital expenditures on AI in 2026: $175–185 billion, which is almost double last year's level and significantly exceeds analysts' expectations.
On the other hand, the forecast supported chipmaker stocks:
- Nvidia (NVDA.US) +1.9%
- Broadcom (AVGO.US) +5.5%
The market made it clear: they are willing to pay for AI, but not for just anyone.
AI Hits the Fortunes of U.S. Software Billionaires
Since the beginning of the year, American billionaires who made their fortunes in software have lost at least $62 billion, according to Bloomberg. The reason is a massive sell-off in the software sector amid fears that AI undermines traditional business models.
The hardest hit were:
- AppLovin (APP.US) — three founders lost about 30% of their capital each; CEO Adam Foroughi — −$7.8 billion;
- Workday (WDAY.US) — co-founder Dave Duffield's fortune decreased by 19% to $11.3 billion;
- Oracle (ORCL.US) — Larry Ellison lost nearly $40 billion after a 16% drop in shares.
The losses also affected related industries — private equity funds and the crypto sector. The market is harshly reassessing expectations from the IT business in the AI era.
Bitcoin Below $70,000: Burry Warns of 'Death Spiral'
On February 5, Bitcoin fell below $70,000 for the first time since November 2024 and briefly dropped to $60,000. Later, the price partially recovered, but market pressure remains.
Michael Burry stated that the crypto market has no fundamental 'floor' as Bitcoin remains a speculative asset.
- at $60,000, Strategy is at risk;
- at $50,000, miner bankruptcies and a chain sell-off of reserves are possible.
The reasons for the decline include the launch of Bitcoin ETFs, increased speculation, and a strengthening correlation with the stock market.
Walmart Becomes a Trillion-Dollar Company Thanks to AI Transformation
Walmart's (WMT.US) market capitalization surpassed $1 trillion for the first time after hitting a historical stock high on February 3.
- the company is worth about twice as much as Costco and Home Depot;
- it is only surpassed by Amazon with a market cap of about $2.5 trillion.
The growth was supported by investments in AI and digitalization: logistics, personnel management, customer service, as well as partnerships with Alphabet and OpenAI.
EU Proposes Alliance with the U.S. on Critical Minerals
The European Union is preparing a proposal to the U.S. for a strategic partnership in critical minerals to reduce dependence on China.
- signing a memorandum of understanding;
- preparing a roadmap within three months;
- joint formation of strategic reserves.
Critical metals are increasingly being viewed as a strategic resource on par with oil.
SpaceX Acquires xAI and Accelerates IPO Preparation
SpaceX announced the acquisition of the AI startup xAI. The deal was conducted in the form of a stock swap.
The goal is to create a vertically integrated ecosystem: AI + space + satellite internet + mobile communication + social network X.
According to media reports, SpaceX's IPO could take place as early as the end of the year.
ECB Holds Rates Steady for the Fifth Consecutive Time
On February 5, the European Central Bank kept rates unchanged:
- deposit rate — 2%;
- base rate — 2.15%;
- marginal lending rate — 2.4%.
The ECB noted the resilience of the eurozone economy but emphasized high uncertainty. Inflation has already fallen below the target of 2%.
