Several large firms report earnings this week, covering AI infrastructure, cloud services, home improvement retail, and enterprise software. Attention is expected to centre on guidance, capital spending plans, and demand trends.
Alibaba reported fiscal Q2 (ended 30/09/2025) revenue up 5% to 247.8 billion yuan ($34.8 billion). Cloud revenue rose 34% to 39.8 billion yuan versus 37.9 billion yuan expected, after 26% growth in the prior quarter.
Alibaba Earnings Setup
Alibaba has spent 120 billion yuan on capital expenditure over the past four quarters, within a 380 billion yuan multi-year infrastructure plan. Cloud EBITA rose 35% to 3.6 billion yuan, while quick commerce revenue grew 60% after 12% growth previously, and China e-commerce revenue rose 16% to 132.6 billion yuan.
Alibaba reports 24/02/2026 pre-market, with EPS estimate $1.58 and revenue estimate $41.90; shares are up about 5% in 2026. Home Depot reports 24/02/2026 pre-market; EPS estimate $2.53, revenue estimate $38.03B, and shares are up about 10% in 2026.
Home Depot’s Q3 adjusted EPS was $3.74 versus $3.84 expected, with revenue $41.35 billion versus $41.10 billion. Full-year sales are guided to rise about 3%, comparable sales slightly positive, and adjusted EPS to fall about 5%, while online sales grew 11% and big-ticket projects rose 2.3%.
Nvidia’s fiscal Q3 revenue was $57.01 billion versus $54.92 billion expected, with adjusted EPS $1.30 versus $1.25 and net income up 65% to $31.91 billion. Data centre revenue was $51.2 billion, including $43 billion from GPU compute.
Nvidia reports 25/02/2026 post-market, with EPS estimate $1.53 and revenue estimate $65.69B; shares are up about 2% in 2026. Salesforce reports 25/02/2026 post-market, with EPS estimate $3.05 and revenue estimate $11.18B; shares are down about 30% in 2026.
Salesforce And Nvidia Watch
Salesforce posted adjusted EPS of $3.25 versus $2.86 expected, with revenue $10.26 billion versus $10.27 billion and revenue up 8.6% year-on-year. Net income rose to $2.09 billion from $1.53 billion, including a $263 million investment gain, while Agentforce generated over $500 million and Informatica is expected to add about three percentage points to fiscal Q4 revenue growth.
With Alibaba reporting tomorrow, we see a conflict between its high-growth cloud segment and the margin pressures from its quick commerce business. This creates uncertainty, setting the stage for a potentially volatile reaction to its earnings announcement. The options market is currently pricing in a significant move, reflecting this tension between AI-driven optimism and profitability concerns.
Looking back, we saw similar patterns in 2025 where Chinese tech stocks reacted sharply to any news on capital expenditures and cloud revenue. Considering Alibaba’s stock historically moved an average of +/- 7% on earnings days last year, the high implied volatility is justified. This suggests that traders are preparing for a move that could break the stock out of its recent range.
For traders who believe a large price swing is imminent but are unsure of the direction, a long straddle using at-the-money options expiring this week could be a viable strategy. This play would profit from a significant move either up or down, capitalizing on the expected post-announcement volatility. It’s a direct bet on the earnings release causing a decisive shift in investor sentiment.
Home Depot also reports tomorrow, and its recent history of three consecutive earnings misses weighs heavily on sentiment. The primary headwind remains the weak housing market, which is unlikely to have turned around significantly in just one quarter. This suggests a continued cautious or bearish stance might be warranted for traders.
We know that 30-year mortgage rates remained elevated, averaging above 6.5% through the end of 2025, which directly impacts spending on large renovation projects. This macroeconomic data supports the company’s previous cautious guidance and makes another quarter of soft results a distinct possibility. The market seems to be bracing for modest results at best.
A bear put spread could be an effective way to position for a potential downside move without taking on unlimited risk. By buying a higher-strike put and selling a lower-strike one, traders can profit if the stock declines moderately following the report. This defined-risk strategy aligns with the persistent macroeconomic pressures facing the company.
Nvidia’s earnings on February 25th are perhaps the most anticipated, given its central role in the AI boom. The company is priced for perfection after a series of massive earnings beats, meaning even a slight miss on revenue or guidance could trigger a sharp sell-off. We are watching to see if demand from hyperscalers can continue at its breakneck pace.
Recent industry data showed that global spending on AI infrastructure grew by over 40% in 2025, a trend that directly benefits Nvidia. However, the stock’s valuation already reflects this powerful growth, creating a high bar for the company to clear. Any commentary on supply constraints for its most advanced chips will be critical.
Given the extremely high cost of options, a bull call spread offers a risk-defined way for traders to play further upside. For those who believe expectations are too high, selling a far out-of-the-money bear call spread could be a strategy to profit if the stock’s post-earnings rally is more muted than the market expects. This approach benefits from the high implied volatility decaying after the announcement.
Finally, we have Salesforce, which also reports on February 25th facing a different set of challenges. With the stock down significantly this year, the narrative is focused on whether its new AI products can genuinely re-accelerate growth amid a slowdown in its core software business. The market is skeptical, and this report will be a key test of its AI strategy.
Throughout the second half of 2025, we observed that enterprise software spending slowed, with many companies pushing out large IT projects. This industry-wide headwind helps explain Salesforce’s recent revenue miss and puts more pressure on its Agentforce AI platform to deliver meaningful results. Traders will be looking for concrete numbers on AI adoption to justify a shift in sentiment.
Given the stock’s depressed price and the high degree of uncertainty, a long strangle could be an appropriate strategy. By purchasing out-of-the-money calls and puts, traders can position for a sharp move in either direction. This would pay off if the earnings report provides a major positive surprise or if poor guidance sends the already weakened stock significantly lower.
