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Nvidia earnings and the indexes -3

09:36 28-Aug-25

Best Buy earnings are helping to limit the broader index impact this morning, and of course, analysts are almost universally coming to Nvidia's defense.  However, despite continued American investment, including catch up efforts from Google, last night's earnings still indicate that we're closer to the end than the beginning of a 2-year bull market for NVDA and the indexes.  It was revealed on the call that the 15% China tax still isn't codified, which gives bulls reason to hope, but still represents additional drag.  On positive note, Nvidia is far from distressed, and thus not a candidate for the sort of government dilution that Intel was strong armed into accepting.

Nvidia earnings are out and while they beat on the top and bottom lines, they also continue the narrowing trend, with no H20 sales to China.  The 3Q25 outlook beats by less than a billion.  Markets were already growing cautious on the space, and this doesn't look like enough to turn that around.  NVDA shares are down 2% to trade just above $178 in the initial reaction.  Market indexes probably needed a reason for NVDA to reach new highs, but it's hard to find one here after the stock has already appreciated by a factor of 15x over the past three years.

Looking forward, AMD and IBM joining forces to use quantum computing as competition is not something that will affect indexes any time soon.  Instead, I'm most concerned with with near term reactions, like to the Pixel 10 with integrated Gemini, the iPhone 17 intro, which might be the last model without Google's subpar yet increasingly ubiquitous AI powering Siri.  While the Pixel 10 is getting decent initial response, I note that the features are more akin to expert systems than genAI.  A natural language interface to portable devices is indeed a killer app, but it should not be confused with true generic intelligence, where I remain critical of current efforts.  As we work our way through September, long term news like the availability of Thor developer kit for robots should matter little in comparison.

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