Nvidia's $96 billion quarter 🤖

Welcome back to the Day Trading newsletter 📈

Stocks drifted lower Wednesday as everyone held their breath for Nvidia, then the AI bellwether delivered after the close, sending futures higher overnight with Fed Chair Warsh's Jackson Hole speech now the last hurdle of the week.

Let’s get into it 👇️ 

💰️ Meta agreed to pay up to $16.7 billion to settle claims from 29 states that Instagram and Facebook were designed to hook young users. Beyond the payout — one of the largest corporate settlements ever — Meta must limit minors' nighttime access, add parental tools and strengthen age verification. The stock rose anyway.

🔼 Salesforce jumped 14% in extended trading after crushing estimates and raising its full-year outlook. Revenue rose 11% to $11.35 billion, and results included a $2.6 billion gain on the company's investment in AI startup Anthropic. The guidance raise pushed back hard on fears that AI is eating traditional software.

📈 CrowdStrike climbed as much as 12% in extended trading after posting record growth. Revenue rose 26% to $1.47 billion, net-new annual recurring revenue hit a record $333 million — up 51% from a year ago — and the cybersecurity firm raised full-year guidance as companies spend to protect AI workloads.

👕 Abercrombie & Fitch soared 36% Wednesday — its biggest jump since November 2025 — after record quarterly sales and a massive guidance hike. The retailer now expects $13.10 to $13.60 in full-year earnings per share, up from $10.20 to $11.00 previously, with operating margins near 15%. (Bloomberg)

🇨🇦 Canada unveiled retaliatory tariffs on roughly $20 billion of U.S. goods, taking effect September 8. The counter-tariffs hit more than 700 products at rates of 15% to 50% — including 50% on U.S. steel and aluminum — matching Trump's weekend duties dollar for dollar. Ottawa added a $7.5 billion support package for affected businesses and workers.

🎯 Core PCE inflation — the Fed's preferred gauge — rose 3.3% annually in July, unchanged from June and right in line with expectations. Sticky inflation well above the 2% target, plus stronger-than-expected income growth, gives the Fed's hawks ammunition heading into Warsh's first Jackson Hole speech as chair on Friday.

🛢️ Oil fell to a one-week low Wednesday, with WTI dropping 2.2% to $80.52 a barrel. Traders are betting the U.S. sanctions campaign against Iran won't actually disrupt supply, and reports of a possible Iran-Oman arrangement to secure safe passage through the Strait of Hormuz drained more of the war premium that had crude near $85 on Monday.

💵 Bitcoin spiked above $80,000 Tuesday — its highest level since mid-May — before easing to around $78,500 Wednesday as traders took profits. Even with the pullback, bitcoin is up more than 22% in August, on pace for its best August since 2017, with spot ETFs pulling in over $2.2 billion since August 17.

Nvidia posted the biggest quarter in its history after Wednesday's close: $96.2 billion in revenue, more than double a year ago and well ahead of the roughly $92 billion analysts expected.

Adjusted earnings of $2.22 a share comfortably beat estimates, data center revenue hit $89 billion (up 117%), and the company guided next quarter to $108 billion — about $4 billion above estimates.

The kicker came on the call, where CEO Jensen Huang forecast roughly 70% revenue growth for fiscal 2028, far above Wall Street's models.

Amazon Web Services also committed to buying 2 million Nvidia GPUs. Shares rose about 4% after hours and kept climbing overnight.

This report was the AI trade's biggest test of the year — Nvidia came into it having fallen seven straight sessions through Monday on memory-cost fears, and those fears weren't imaginary.

The company's supply commitments more than doubled in a single quarter, from $119 billion to $279 billion, mostly to lock up scarce memory chips, and it guided gross margins down from 75% today to a trough of 71-72% by its fiscal fourth quarter as memory prices surge.

In other words: demand is not the problem, the cost of feeding it is.

Nvidia's CFO also said the top five hyperscalers are expected to spend $1.3 trillion on capex next year, up from $800 billion in 2026 — a staggering number that keeps the entire AI supply chain (chips, power, data centers) in business.

What to watch: 

• Whether the margin squeeze marks the top for memory prices. Nvidia says its own price increases kick in early next year, which would push costs downstream to cloud providers and, eventually, AI users.

• Nearer term, all eyes turn to Jackson Hole on Friday, where Warsh's first speech as Fed chair could either extend this rally or stop it cold.

 RATE TODAY’S EDITION

⚠️ Disclaimer: Not financial advice. Do your research before making any trades.