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Weekly Newsletter
🤖 NVIDIA Enlists 6 Wall St. Giants To Mobilize $500 Bn+
📉 Better-Than-Expected CPI
🏦 US Bond Sale Attracts Record Yields
📊 Key Takeaways From This Week’s Earnings
📈 Earnings Tracker
QUOTE OF THE WEEK:
“State and local opposition does not change the demand profile for AI, right? It might change where it gets built, but overall, the demand profile for AI is just—it's just through the roof. It's an insatiable demand for compute. There's truly no way to solve it in the near term. So it could end up shifting where data centers get built, but it does not change the need to be building data centers in the US.” - Brannin McBee, co-founder and CDO - CoreWeave
KEY US ECONOMIC EVENTS NEXT WEEK:
MARKET CLOSE:
WEEKLY MARKET WRAP:
Good Afternoon. Flat week for the markets, with all major indices except the Dow ending positive. Cool CPI Tuesday and a flat PPI Thursday killed the September rate-hike fear that had been building since three FOMC dissenters at the July meeting. S&P and Russell 2000 both hit fresh all-time closing highs Thursday, with breadth the best of the cycle: 30 new S&P 52-week highs, 155 new Nasdaq highs, and R2K now +22.6% YTD, outpacing the S&P by 9.4 points.
The one crack: the 30-year auction cleared at the highest rate in 25 years. However, I don’t think it's a major issue. AI capex financing needs, persistent Treasury deficits, and coordinated global sovereign issuance are all clearing the same duration market at once. A 25-year high 30-year yield alongside record equity highs isn't a contradiction — it's the price of a capital-formation regime that can absorb higher rates as long as the capex goes to productive assets.For the week:
CNN's Fear & Greed Index now stands at 65 (Greed) out of 100, up 1 point from last week. Details here
The top five trending stocks on Reddit are SPY, NVIDIA, Micron, Nebius Group, and QQQ. Read More
Liquidity:
Banking Reserves + ON RRP: Banking reserves remain at approximately $2.9 trillion. ON RRP balance remains immaterial.
Standing Repo Operations: The New York Fed’s standing repo operation (primarily reflecting SRF take-up) is $0.
Here is a summary of this week’s key economic releases:
Target Rate Probabilities for Sept 16th FOMC Meeting:
CURATED INSIGHTS & ANALYSIS:
Compute — The New Asset Class:
NVIDIA is trying to change how the capital markets think about compute. The company and Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR have signed MoUs to establish financing platforms designed to mobilize more than $500B of third-party capital for AI infrastructure. That distinction matters: $500B is not committed capital or guaranteed deployment today — it is the amount the proposed platforms are designed to mobilize over time. The structure also aims to address concerns around circular AI financing by bringing in independent capital providers that will underwrite projects individually. The bigger shift is from project-by-project technology capex toward financeable, productive infrastructure. Jensen Huang put it simply: “In AI, compute is revenue.”
The argument for treating compute as an asset is becoming more concrete. NVIDIA’s AI factories are revenue-generating, flexible, and fungible; they can serve multiple customers, clouds, models, and workloads. Software can also extend their economic life — NVIDIA notes that A100S introduced in 2020 remain in active commercial use six years later, while CUDA continues improving the performance and economics of installed infrastructure. In the interview, executives compared the emerging financing model to aircraft and real estate: lenders can underwrite not only the borrower, but also the underlying compute asset.
If these platforms develop as envisioned, they could create an entirely new capital-markets layer around AI. Financing partners would independently assess customer demand, utilization, cash flow, and residual value, while NVIDIA may provide limited residual-value support on individual projects. KKR went a step further: if compute produces a durable revenue stream, that cash flow can eventually be securitized and distributed to investors. The broader implication is larger than another AI capex cycle. Compute is beginning to look less like disposable hardware and more like infrastructure — an asset that can be financed, underwritten, redeployed, and ultimately owned by a much broader pool of capital.
Key takeaways from the earnings season:
Memory costs are doing two things at once: raising revenue and cutting margins
Cisco’s price increases, driven by expensive memory, added about five points to its revenue growth. The same memory costs cut its gross margin by 210 basis points. One shortage is lifting sales and squeezing profits in the same quarter. Cisco called it an industry problem, not a Cisco problem — which means every hardware maker faces this math now.
Data centers are running out of power, so a new market is forming
AI models have grown too large for one building’s power supply, so companies now connect data centers together. Cisco says this traffic runs about 14x what it used to and already has three hyperscaler customers. Arista sized the same market at $15–20 billion last week. CoreWeave and Super Micro, which sell that capacity, booked a $104 billion backlog and $60 billion of new orders. Two rivals describing the same new market in the same month suggests it is real.
The high-end consumer may be weakening
On Holding fell 20% after its Americas growth slowed to 13% from 17%, and its wholesale business slowed to 13% from 25% in two quarters. Until now, the wealthy consumer kept spending while the low end traded down. One brand does not prove a trend. But it is the first warning sign, one week before Walmart, Target, and Home Depot report.
Companies are moving AI in-house to cut their token bills
Cisco said enterprises are moving AI onto their own hardware because paying per token got too expensive, and because they want to keep their data private. Orders for its AI data-center switches rose 85% from last quarter. Palantir made the same argument a week earlier. The shift from renting AI to owning it is now visible in hardware orders.
China’s consumer is shrinking; Southeast Asia and Latin America are growing
JD.com’s revenue fell for the first time since it listed in 2014, and Tencent Music dropped 12% despite a beat. The same week, Sea jumped 15% on Southeast Asian growth and Nu rose 9% on Latin America. Emerging-market consumer growth has moved out of China.
Earnings Tracker:
Large caps are cooling; the broad market is accelerating.
At 91% reported, the S&P 500 is running 2.2pp behind Q1's earnings pace at the same stage — a cooling off an exceptional +29% quarter, not weakness. The median constituent grew earnings +14.2% on +13.2% revenue with an 85% beat rate; Growth shows the same shape at −2.2pp. Both gaps narrowed into season-end, from 2.7pp and 3.6pp a week earlier.
The Russell 3000 runs the opposite direction: 5.6pp ahead of Q1's pace and widening, with a +16.6% median — above the S&P 500's — on lower revenue growth of +11.2%. Slower top-line growth and faster earnings acceleration point to margins, not demand. Q1's strength was concentrated and partly non-operating; Q2's is broadening down-cap — likely the more durable of the two.
Methodology & correctionEarnings = median reported constituent's GAAP growth — the typical company, not total index profits. Pace compares each universe against Q1 at the same percentage of results filed.
Headline aggregates differ by design: LSEG's published Q2 figure is +51.1% (+32.7% ex the Alphabet/Amazon mark-ups) vs our +14.2% median — the gap measures how concentrated this quarter's strength is.
Correction: last week's Russell 3000 revenue (+18.6%) was inflated by an erroneous vendor data point; corrected to +11.2%. Automated integrity screens now validate every constituent against its own filing history.
FRONT PAGES:
Nvidia Enlists 6 Wall Street Giants for $500B AI Compute Financing: Nvidia signed MOUs Monday with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to mobilize over $500B for AI infrastructure buildout. Treats GPU compute as an investable asset class, collateralized like commercial real estate or toll roads. Huang: AI factories are "a new class of productive, investable architecture." BofA's Vivek Arya called it "a pivot away from vendor-financing — the burden sits with the consortium, not (Nvidia's) balance sheet." Extends July's SK Group $500B partnership and Nvidia's $100B OpenAI commitment. Read
Silver Lake in Talks to Take Workday Private at $50B+: Reuters reported Thursday that Silver Lake is in advanced discussions to acquire HR/finance software maker Workday in what would rank among the largest software buyouts in history. Follows Silver Lake's $55B EA take-private last year (with PIF and Affinity Partners) and Thoma Bravo's $16B Dayforce deal. WDAY jumped 18%; European SaaS names rallied in sympathy (SAP +4.7%, Nemetschek +8.8%). Signals PE appetite for large-cap SaaS is returning as AI-driven multiple compression opens the door. Read
Intel Upsizes Stock Offering to $20B at $95: Intel priced its stock offering Tuesday at $95/share, upsizing from $15B to $20B — largest single equity raise by a chipmaker ever. Proceeds fund AI-driven capex; 2026 capex now above $20B, 2027 "significantly higher." Follows August 2025's Trump 9.9% stake ($8.9B via CHIPS Act conversion at $20.47), Nvidia's $5B private placement, and SoftBank's $2B. Intel stock has quintupled in the past year. Read
Anthropic to Buy Decart for $6B in Largest-Ever Deal: Anthropic in advanced talks to acquire Israeli chip-optimization startup Decart AI for ~$6B — its 5th acquisition of the year and largest by 15x. Decart's software reportedly runs models at ~8x industry-average speed, letting Anthropic squeeze more inference out of existing compute. 50% premium to Decart's May $4B round (led by Radical Ventures with Nvidia). Team joins Anthropic's inference and performance org ahead of the anticipated October IPO. Read
Apple Cleared as First Foreign Firm to Train Own China AI Model: Reuters reported Thursday–Friday that Apple has trained a China-specific LLM with Alibaba's technical support and CAC regulatory clearance — the first foreign company approved by Beijing to deploy a proprietary AI model in mainland China. Apple Intelligence rollout in China expected in coming months, potentially aligned with September iPhone launches. Complements Alibaba Qwen integration; strategic hedge against Huawei's local dominance. Marks Apple's clearest AI capability commitment to date after 2 years of navigating regulatory bottlenecks. Read
EARNINGS UPDATE:
Cisco. Record revenue $17.3B, up 18% and a beat; non-GAAP EPS $1.22, up 23% and a beat, capping a record year. Hyperscaler AI orders hit $9.3B in fiscal 2026, roughly 4.5x the prior year, with AI revenue guided to $7.5B next year and total revenue guided up ~15%. But gross margin fell 210 basis points on hardware mix and memory costs, and shares dropped about 8%. A beat-and-raise, taxed by its own supply chain.
Applied Materials. Record revenue $9.1B, up 23% and a beat; non-GAAP EPS $3.50 versus $3.40. AI-driven demand for leading-edge logic, DRAM, and advanced packaging keeps equipment spending above 30% growth this year. Shares still fell about 5% after a huge run. Another strong print the price had already absorbed.
CoreWeave. Revenue $2.58B, up 152%, roughly in line; the loss of $1.03 was narrower than expected. The revenue backlog reached $104B — before another $25B+ of new commitments — with 1.5 gigawatts of active power, a 1.85GW year-end target, and 2026 capex of $35–39B. Shares jumped about 19%. The market is now pricing in the gigawatts.
Super Micro. Non-GAAP EPS was $1.70 versus $0.92, nearly double consensus, as gross margin hit 17.6% against its own 8.2–8.4% guide; revenue of $11.1B, up 93%, came in light on customer-readiness delays. New orders exceeded $60B in the quarter alone, and fiscal 2027 revenue was guided to $65–72B versus a $52.5B consensus. Shares jumped about 19%. The order book overwhelmed the revenue miss.
Coherent. EPS $1.74 versus $1.62; record revenue $2.05B, up 13% and a beat, on AI data-center optics demand. Shares fell about 8% — after rising 8% into the print on S&P 500 inclusion. Priced for more than a clean beat.
Sea Limited. Revenue $7.79B, up 10% and a 9% beat, on strength across Shopee e-commerce and fintech; EPS of $0.86 landed on consensus. Shares jumped about 15%. Southeast Asia’s consumer is doing what China’s no longer is.
JD.com Non-GAAP EPS $0.93 versus $0.86; revenue $51.0B, a modest beat against consensus — but down 2.9% year over year, the first revenue decline since its 2014 listing, as subsidy-fueled appliance demand unwound. Profit rose 20% as the food-delivery price war calmed. Shares fell about 7%. The bottom line healed; the top line broke a 12-year streak.
Nu Holdings. EPS $0.22 versus $0.20; revenue $5.88B, up 18% and a 9% beat, on customer growth across Brazil, Mexico and Colombia. Shares jumped about 9%. Latin American fintech keeps compounding.
Cardinal Health. EPS $2.91 versus $2.42, a 20% beat; revenue $63.7B came in light of consensus. The pharma-distribution engine keeps outearning its top line. Shares were little changed. A big beat, quietly received.
On Holding. EPS $0.44 versus $0.42; net sales of CHF 850M missed, as Americas constant-currency growth slowed to 13% from 17% and wholesale decelerated sharply. Shares fell about 20% to a two-year low. The premium U.S. sneaker consumer just blinked.
Tencent Music. EPS $0.25 versus $0.24; revenue $1.32B, a beat, on paying-subscriber growth. Shares still fell about 12% on the print. A clean quarter, sold anyway.
AST SpaceMobile. A loss of $0.44 versus an expected $0.32 loss; revenue of $31.5M also missed. Shares rose about 4% anyway as investors focused on constellation progress and contracted spectrum. A story stock trading on the buildout, not the P&L.
EARNINGS PREVIEW:
Date | Symbol | Name | Time |
18-Aug | HD | Home Depot Inc | Before Open |
18-Aug | BIDU | Baidu Inc | Before Open |
18-Aug | KEYS | Keysight Technologies | After Close |
19-Aug | TJX | TJX Companies Inc | Before Open |
19-Aug | ADI | Analog Devices Inc | Before Open |
19-Aug | LOW | Lowe's Companies Inc | Before Open |
19-Aug | TGT | Target Corporation | Before Open |
20-Aug | WMT | Walmart Inc | Before Open |
20-Aug | BABA | Alibaba Group Holding | Before Open |
20-Aug | DE | Deere & Company | Before Open |
20-Aug | NTES | NetEase Inc | Before Open |
20-Aug | ROST | Ross Stores Inc | After Close |
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