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1. Negative EPS revisions are likely to take their toll on the European market, adding to downside risks.

With the recent volatility spike, caution has returned and market bears are seeing the current narrative likely to prove them right.

TFS Derivatives strategist Stephane Ekolo, who already had the survey’s lowest target, cut his view even further. He sees a 9% downside this year, with the Stoxx 600 falling to 470.“Investors still fail to appreciate the economic growth slowdown and weakening corporate environment ahead,” Ekolo says.

“In the short term, volatility may persist and corporate guidance could remain unclear,” says Societe Generale strategist Roland Kaloyan, who sees little upside from current levels. “Trade negotiations are still underway, central banks retain policy firepower and markets have yet to price in the anticipated tax cuts in the US, as well as potential supportive measures from countries with fiscal room to mitigate the impact of the tariffs.”

2. It’s a massive week for earnings, with four of the Mag 7 among those reporting.

3. Chinese competition for Nvidia.

Nvidia and U.S. semiconductor firms fell after the weekend news that Huawei was ready to test its newest high-powered AI chip, while Nvidia faces restrictions in China.

Huawei is testing its new Ascend 910D processor, aiming to rival Nvidia’s H100 chips.

The Wall Street Journal reported that Huawei plans to ship over 800,000 Ascend 910B and 910C chips this year to major clients like ByteDance and state-owned telecom carriers.

The news comes as Nvidia recorded a $5.5B write-off loss after the Trump Administration restricted selling their H20 chips to China, the highest performance tech they were previously allowed to sell.

While Nvidia’s latest Blackwell chips remain ahead globally, Huawei’s state-backed efforts could shift the landscape in China, especially because they are easy to get.

4. The ship building war.

At the heart of Beijing’s ambitions in shipbuilding lies the China State Shipbuilding Corporation (CSSC), an expansive conglomerate of shipyards, factories, and research institutes overseen by China’s top political and military leadership.

CSSC is the world’s largest shipbuilding group, and in 2024 alone, it produced more commercial vessels by tonnage than the United States has since World War II. 

China’s global market share rose to an estimated 42 percent, predominately at the expense of shipbuilders in South Korea and Japan.

5. Waymo versus Tesla.

While Tesla has promised self-driving cars for a decade, Google already has self-driving cars driving for Waymo. Alphabet’s autonomous unit has thousands of cars in San Francisco and Austin, set with Star Wars droid-looking antennas on top. The CEO said on the earnings call they ferry 250k people a week. 

However, Google can’t figure out how to make money on self-driving cars. CEO Sundar Pichai said on the firm’s earnings call that they are looking into partnership options with ride-hailing services like Uber, and even into selling the cars to consumers.

The problem is, Waymo cars are expensive to make. During the Tesla Q1 earnings call, Elon Musk criticized Waymo’s driverless tech as “very expensive” and “low volume,” while championing Tesla’s camera-focused systems as a more scalable alternative. He’s got a point. Google doesn’t sell cars, they strap computers to cars. The Waymo CEO said years ago that a fully outfitted car with expensive Lidar could cost about the same as a Mercedes S-Class, or $180,000.

Meanwhile, Musk has repeatedly said he wants the average Joe to buy a Tesla cyber cab. Tesla uses cheaper camera driving software, which is allegedly not as effective, but much less expensive. Last week, Tesla surged 9.6% after Transportation Secretary Sean Duffy announced a new self-driving framework to cut red tape. The company plans to launch self-driving cabs in Texas this June and begin producing its Cybercab robotaxi by 2026.

With a “cut regulations with a chainsaw” inclined White House, 2025 might be the time for self-driving players, including Waymo, Tesla, and Amazon’s Zoox, to take the on-ramp. Meanwhile, target prices for Tesla vary wildly, from $120 to $410.

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