Market Musings 8/28/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Nvidia crushed earnings again, so what does that mean for the rest of the #AI trade?
Nvidia announced another record quarterly revenue beat with expectations for more growth on tap. Despite that, shares were down in afterhours largely due to China #AI sales uncertainty.
However, that’s more of an Nvidia specific issue. More importantly, what’s earnings read thru to the overall #AI trade?
The #AI focus is on Nvidia’s data center revenue growth (basically where all the #AI sales are). The headline number was flashy with 56% growth Y/Y. However, the quarterly growth was only up 5%－continuing to decelerate the past two quarters.
So, what does this mean?
First, hyperscalers. Customers like Google or Microsoft are the ones paying for it. It might signal they’re starting to digest prior #AI GPU buys rather than ramping up fresh orders.
That may mean the massive #AI CapEx spending may be moderating.
Second, infrastructure. For other chip makers, component suppliers and server manufacturers, it’s a little more mixed. Demand may be slowing, but may also be an Nvidia specific issue if other competitors are taking markets share.
However, the China issues will likely impact everyone in this segment.
Finally, applications. With the initial #AI buildout ramped up, it’ll be on these guys to prove monetization. Per that MIT report, only 5% of #AI projects are monetizing.
Will that justify all these big server buildouts and, more importantly, will it justify more?
The trajectory of #AI monetization likely will be the longer-term catalyst for,
or against, further #AI buildout growth.
Bottom line: #AI demand is still hot, but the future may be a little murky.
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Original Photo by Pixabay.