TGIT: Nvidia's Message to the Markets and Meta's Mea Culpa

Decoding Nvidia's earnings. Also, gold, gummies, Harris, Trump, micro shorts, percussion and more.  

Thank goodness it's Thursday! During a week of frenzied focus on Nvidia, the high-flying chipmaker and proxy for all things AI, a whopper of a financial markets story got a lot less ink than we feel was warranted. On Monday, Meta (META) CEO Mark Zuckerberg revealed in an explosive letter to the House Judiciary Committee chair that the government “pressured” the company to “censor” content during the COVID-19 pandemic. Well, it’s reasonable to debate the government’s role in protecting the public during a national health emergency. But Zuckerberg also said he felt the FBI coerced him to demote damning content about the president’s son's laptop—information that was later verified. Luckbox sides with ACLU legal scholar Nadine Strossen’s assessment that “while private platforms like Meta have the right to control content as part of their own free speech rights, the line is crossed when government pressure becomes coercive.”

Zuckerberg, next time, just say “No.”

Back to Nvidia.

Editorial Director

Nvidia (NVDA) beat most Q2 revenue expectations and predicts it will do it again with Q3 revenue of $32.5 billion and gross margins in the mid-70s range. So, why does Wall Street regard the company’s results as underwhelming? Our analyst sat through the earnings call and shares six key takeaways. Read Full Story

This morning, U.S. second quarter 2024 GDP was revised to 3%—up from the previous figure of 2.8% because of stronger personal consumption. Plus, initial jobless claims eased to 231,00 from 233,000. Playing into soft-landing forecasts, this economy appears to be neither in recession nor at risk of an abrupt end to the current business cycle. 

Yesterday, Berkshire Hathaway (BRK.B) became the first non-technology company in the United States to achieve a $1 trillion market capitalization. The company was founded in 1839 as a textile manufacturer. Its chairman and CEO, Warren Buffett, took a majority stake in 1965. 

Shares of Super Micro Computer (SMCI) plummeted more than 23% yesterday, following damning accusations of “accounting manipulation and sibling self-dealing." Hindenberg Research disclosed the alleged malfeasance (along with their short position) in an explosive report, causing the server manufacturer to announce it won’t be able to file its annual report on time with the Securities and Exchange Commission.

Vice President Kamala Harris wants to raise the 21% corporate income tax to 28%, while former President Donald Trump advocates cutting it to 15%. And what’s this about a 25% wealth tax on individuals? In fact, the only thing the two candidates seem to agree upon is Trump's plan for no taxes on tips. These two (linked) articles explore the opposing candidate's policy proposals. 

In fiscal year 2022, federal tax revenue reached a record high of $4.9 trillion.

— House Budget Committee

While everyone’s obsessing over Nvidia (NVDA), gold has surged by about 23% this year, surpassing $2,500 an ounce in August to reach an all-time record high. Meanwhile, silver is up 24%. The fundamentals driving these markets include geopolitical uncertainty and looming cuts in Federal Reserve interest rates. But, what do the technical indicators say? Read Full Story

Short-term duration options ranging from weekly to zero days-to-expiration (0DTE) offer the allure of higher returns. But, unsurprisingly, that comes with greater risks. Watch for these hazards. Read Full Story

Iron condor's are defined risk, short premium positions that benefit from a sideways move in the stock, contraction in volatility, and the passage of time. But what happens when volatility spikes? Watch this episode of The Lifecycle of a Trade to see the open position, management, and closing order with the VIX spiking.

Vitamin and nutritional supplement manufacturers, along with CBD and THC vendors, have taken notice of consumers’ affection for the colorful and sugary delivery mechanism of gummies. The U.S. gummy market has reached $3.5 billion—with a 2030 revenue forecast of $6.71 billion. In short, gummies are having their moment. Read Full Story

Segall's Percussionist Past 🥁

Fans know Ty Segall for guitar-driven psych-rock reminiscent of Jimmy Page. But multi-instrumentalist Segall is releasing an instrumental album tomorrow titled Love Rudiments, and it's an experimental take on where it all began for him as a music-lover: Percussion. It features the trap kit, timpani, vibraphone, xylophone and electric drums. Read Full Story

Caution: May Contain Lies 📚

Last week, we mentioned we’re reading the new book May Contain Lies: How stories, statistics, and studies exploit our biases—and what we can do about it. Our review will be be coming soon to this space. In the interim, check out this interview that the book’s author, Alex Edmans, had with World Series of Poker champion Annie Duke. Then, take a look at this excerpt from the book. The way you view the marketing of investment products will change forever.

The Rock Star of Stocks  🎸🤘📈

The uproar surrounding yesterday’s Nvidia (NVDA) earnings report seemed more suited for rock ‘n’ roll than buy-and-hold. As the embodiment of the AI boom, Nvidia has seen its market cap balloon nine-fold since 2022. It’s now 7% of the S&P and 8% of the Nasdaq.

That makes it the rock star stock of our time. Fans held live earnings watch parties in NYC. It’s like trying to watch a grainy livestream of your favorite band, but with more EBIDTA. (And it’s still better than Phish.) There's even Nvidia merch. How else can you rep your HODL with a vengeance unless you’re rocking an Nvidia beanie? Company CEO Jensen Huang literally went viral for signing a woman’s ample cleavage. Women are taking their tops off for GPUs. Doesn’t get more rock and roll than that.

Nvidia reported 122% revenue growth and a $50 billion stock buyback, but the stock was down small. It's like doing a 10 minute-behind-the-back-flaming-guitar solo and the market just “shrugged.”

                                                                                              —Vonetta Logan

More Cowbell

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