💦 Nvidia is suffering from success (2024)

Consider this my out-of-office. No newsletter tomorrow or Monday. Enjoy the long weekend, America.

Oh, and enjoy the next 4 minutes and 10 seconds of blue-chip news and commentary.

Keep on snapping necks and cashing checks,

PS, want to get your company in front of more than 100k rich, good-looking, and intelligent newsletter subscribers for Q4? We’re booking ads for October, November, and December right now. Reach out via this form and I’ll be in touch.

+ US stocks were“lower on Wednesday as investors awaited chipmaker Nvidia's earnings report, seen as crucial to keeping confidence in the broader market aloft.” (Yahoo! Finance)

+ The 10-year Treasury yield “was little changed on Wednesday as investors awaited a key U.S. inflation report due later in the week.” (CNBC)

+ Oil “settled 1% lower on Wednesday after a smaller-than-expected draw in U.S. crude stockpiles and as concerns over Chinese demand persisted, though losses were capped by supply risks in the Middle East and Libya.” (Reuters)

+ Bitcoin “dropped on Wednesday, extending a sharp downturn from the prior session after the movement of a large volume of tokens onto a popular exchange rattled sentiment with the prospect of a major sale event.” (Investing)

+ The three most talked about stocks on WallStreetBets in the past 24 hours were: 1) Nvidia -2.1% // -6.8% after hours2) Super Micro Computer -19.0%3) C3.ai -2.2%

The market moves you need to know about…

– Footlocker’s taking its talents to South Beach. During an earnings call where it announced it would move its HQ to Miami, Footlocker shared promising results. The mall staple reported a top and bottom line beat, and same-store sales rose for the first time in a year and a half… but shares still shed10.2%.

–Shocker… CrowdStrike, fresh off of causing one of the biggest outages in internet history, said it expects the epic f*ck up to weigh on sales. Shares fell2.6% after hours, despite beating expectations for the most recent quarter.

– Abercrombie & Fitch continues to break the brain of anyone who came of age in the early aughts. Not only has it changed its style, but shares have mooned nearly 800% over the past 5 years thanks to skyrocketing sales. And this quarter was no different. Sales jumped 21% and the good times show no signs of slowing down. But shares tumbled16.9% on the day. Why? Because CEO Fran Horowitz warned of an “increasingly uncertain environment.”

Not unlike Rick Ross, Nvidia is suffering from success…

Shares of Nvidia (-2.1% // -6.8% after hours) fell after hours despite a beat…

Why?

Well, it certainly wasn’t because it had a pathetic quarter…

Once again, the chipmaker put on an absolute clinic. It beat the Street’s expectations, which is table stakes at this point for the company that controls the fate of the entire global economy. No pressure.

Nvidia’s sales grew 122% (not a typo) vs. the same quarter last year. Super Micro Computer wouldn’t even lie about numbers that epic.

‘Oh, so it must have been the outlook that had investors heading for the exits?’

Try again. Sales estimates beat the Street’s expectations.

‘Well, I bet those Blackwell rumors are true…’

Actually, it turns out NVDA’s new Blackwell chips, which were rumored to be delayed, will start to ramp in Q4… and will add billions in revenue in the current quarter.

‘I bet the company isn’t optimistic about the future…’

*Jensen Huang authorizes $50B share buyback*

Ok, so what are investors so butt hurt about?

It could be that gross margins slipped a bit (to 75.1% from 78.4%)… I guess. Although, that narrative kinda falls apart when you consider it was below 50% just two years ago.

Or, more likely, because it was literally impossible for Nvidia to meet investors’ real (unreal?) expectations…

+ Sure, it’d be great to find a cure for mpox. But I think some resources should be earmarked for getting to the bottom of what’s killing all the big tech CFOs…

Earlier this week, we found out that Apple CFO Luca Maestri would be “stepping down.”

And yesterday, Salesforce’s (-2.0% // +4.2% after hours) president and CFO Amy Weaver said she was walking away. Marc Benioff claims another victim. The godfather of CRM doesn’t exactly have the best track record with potential heirs to the throne…

On the bright side, Amy cooked the books one last time went out on top. Salesforce beat easily on the top and bottom lines.

+ Hear me out… maybe Charlie Munger was holding back Warren Buffett this whole time?

Less than a year after Charlie took a new gig at the big conglomerate in the sky, Berkshire Hathaway (+0.8%) became the first non-tech company to hit a $1T market cap. To be fair, its biggest holding is Apple…

Berkshire’s 28% rally in 2024 has helped it join the 4-comma club alongside Apple, Nvidia, Microsoft, Alphabet, Amazon and Meta.

+ “Ok, maybe Hindenburg was onto something, after all.” - the haters and non-believers

Just 24 hours after short seller Hindenburg shredded Super Micro Computer (-19.0%) for having the worst governance since WorldCom, the server maker went “On second thought, let us take another look at our reporting…”

SMCI announced that it would be “unable to file its Annual Report within the prescribed time period without unreasonable effort or expense.”

Why, you ask? Because management needs time to review “the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024.”

Oh, and…

FYI, TWC might be compensated if you click on the links above. So, what are you waiting for? Start clicking.

⏪ Yesterday, RBC, Li Auto, JM Smucker, and Chewy dropped earnings before the bell. And Nvidia, Salesforce, CrowdStrike, HP, Okta, and Affirm reported after the close.

⏩ Today we’re keeping an eye on…

+ Dollar General, Brown-Forman, Best Buy, and Campbell Soup report before the bell

+ Dell, Lululemon, Ulta, and MongoDB drop earnings after the bell

Oh, and on Friday…

+ The Fed's preferred inflation report, the core PCE price index, will drop

Yesterday, I asked, “Is giving each of your groomsmen a Super Bowl futures bet for their favorite team the best groomsmen gift ever?”

61.6% of you said yes.

Here’s what some of you guys had to say (and my thoughts in italics)…

Here’s today’s question…

Send me a GIF that best explains how to plan to spend the last weekend of summer…

You can reply directly to this email. I’ll share some of the best on Tuesday.

Oh, and one more thing…

Does this look like the face of a guy you should take financial advice from?

No, it’s the face of an individual who is financially irresponsible/dumb enough to be talked into spending money on a family photo shoot that he could have just done with his iPhone. So, act accordingly...

This is not financial advice. Nothing in this newsletter is an investment recommendation. All content is created for entertainment, educational, or informational purposes only. Do your own research, or do yourself a favor and hire a professional.