There couldn’t have been more hype around Nvidia’s latest earnings report even if CEO Jensen Huang had read it out while performing aerial acrobatics in a sold-out stadium. The chipmaker announced yesterday that it once again glided past expectations to achieve a banger of a second quarter—but it wasn’t enough to meet investors’ sky-high expectations.

Nvidia reported:

• $30 billion in sales vs. an expected $28.7 billion for Q2. That’s an increase of 122% from last year and follows three straight quarters of tripling growth.
• A revenue outlook of $32.5 billion for the current quarter, which exceeded analysts’ projections but fell short of the loftiest forecasts.
• Underscoring its self-confidence, Nvidia also announced a $50 billion stock buyback.

But…even though it beat Wall Street’s expectations, it beat them by less than in previous blockbuster quarters. That caused investors to fear that growth was slowing, which sent the stock down 7% in after-hours trading (though it’s worth remembering the stock was up 150% for the year before that).

The AI bellwether

One reason the earnings were so hyped is that Nvidia counts all the usual suspects (Microsoft, Alphabet, Meta, Tesla, etc.) as clients, so its earnings report is a way to gauge Big Tech’s AI spending. It provides a valuable data point as some investors fear an AI bubble that could burst.

Multiple analysts have called Nvidia one of the world’s most important stocks and yesterday’s earnings call the most significant market event of the year—rivaling even Fed Chair Jerome Powell’s rate-cut-signaling speech at Jackson Hole last week.

• Nvidia is second only to Apple in market value and has been the best-performing stock in the S&P 500 this year. It accounts for 6.6% of the index but contributed more than one-quarter of its 18% gains this year (not including the lift it gave to other stocks).
• Big corporations aren’t the only ones impacted by Nvidia’s numbers: Retail investors and smaller asset managers hold ~30% of Nvidia shares, according to FactSet. After retail investors bought the Nvidia dip earlier this month, the Nasdaq recorded its third-highest tally of individual trades since 2016, according to Wall Street Journal.

Looking ahead…Nvidia will have to overcome concerns that its next-generation Blackwell chip is facing production holdups, something the company acknowledged yesterday after reports that the product could be delayed by up to three months. But demand for the chips remains strong, and the delay could just mean more sales of Nvidia’s current Hopper chip.—ML

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Telegram CEO charged over criminal activity on the app. French prosecutors released billionaire Pavel Durov yesterday but charged him with several crimes related to unlawful activity on the messaging app—including child pornography and drug trafficking—set bail at €5 million (~$5.5 million), and forbade him to leave the country. Authorities say the company has been uncooperative in legal investigations into crime on its platform. Durov’s arrest at a French airport over the weekend led to a global outcry concerning free speech and stood out for holding a tech executive responsible for activity on its app. The CEO faces up to 10 years in prison on the charges, but they could also be dropped if authorities later decide there isn’t enough evidence.

⚕️ Surgeon general warns the parents are not alright. Maybe take it easy on your friend with a baby who keeps canceling plans, because US Surgeon General Vivek Murthy issued a public health advisory saying parents are super stressed. The advisory noted that 48% of parents report that their stress is completely overwhelming compared to 26% of other adults. It called for policy changes to better support people raising children. This isn’t the first time Murthy has touched on a nontraditional public health issue: He’s also put out advisories on the impact of social media on children and on gun violence.

The Paralympic Games are officially open. Paris held its second grand opening ceremony of the summer yesterday, with paralympic athletes streaming down the Champs-Elysée. Competition begins today for this year’s 11-day games—the first since the pandemic to allow spectators—in which 4,000 athletes grouped by level of impairment will compete in 22 sports. There are plenty of storylines to follow, including whether China will continue to be the big winner, and here are some athletes to watch.

Lego just did two things that don’t usually go together: It reported record profits and then immediately outlined plans to decrease profits by going green.

Lego profits increased 26% over the first half of the year to $1.2 billion, while revenue jumped 13% to nearly $5 billion, the privately held company said yesterday. Those big gains are thanks to a collaboration with Fortnite as well as popular product lines, including Lego Icons and Star Wars- and Harry Potter-themed sets.

And it’s ready to spend. Lego is planning for increased future costs as it pledges to make all products from renewable and recycled materials by 2032:

• The company is working to switch out raw virgin plastic with renewable resin, which comes from biowaste like cooking oil and is between 40% and 60% more expensive than plastic made from crude oil. It’s Lego’s latest attempt to make its iconic bricks without fossil fuels.
• Because of the aforementioned profit boom, CEO Niels Christiansen said the company will absorb all cost increases stemming from the change in materials instead of passing them on to the consumer through higher prices.

Elsewhere in Toys R Us…shelves are full. Mattel and Hasbro reported lower sales for the first half of 2024 as the overall toy market struggles to recover from a 7% sales decline last year.—CC

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A cave system in Kentucky has used the age-old strategy of putting its haters on blast in a social media post to get attention. Mammoth Cave National Park was recently ranked third on a random internet list of “most disappointing US tourist attractions” and decided to promote itself using its bad reviews.

• The list ranking the world’s longest cave system behind supposed touristic flops the Kennedy Space Center and the Rock and Roll Hall of Fame was reportedly from a vague “study” put together by an online UK casino website called JeffBet.
• Learning of the list, the Mammoth Cave team posted on Facebook telling visitors to swing by and “experience what has disappointed millions of people for over 225 years!” The post has garnered 30,000+ shares.

Underselling: Other tourist destinations, like Oslo and its anti-tourism ad, have also snagged social media attention with nontraditional marketing.

But can it actually convert to real visitors? It’s too early to tell in places like Oslo or at Mammoth. But John Ricks, director of the Nebraska Tourism Commission, said in February when retiring the eyebrow-raising “Nebraska, honestly it’s not for everyone” slogan after five years that the campaign bumped up tourist interest in visiting the state from 19% in 2019 to 39%.—MM

The dream of living in a hotel like Zack and Cody has gotten even further out of reach. The Wall Street Journal reports that the $1,000-a-night hotel room has become table stakes at many luxury hotels as budget travelers pull back but high rollers don’t. In the first half of 2024, 80 hotels in the US had a $1,000 average nightly rate, up from just 22 in 2019, according to real estate analytics firm CoStar Group. And heading abroad won’t help: The number of hotels with a $1,000/night average in Europe has tripled to 183. With prices broadly up (a lot) at luxury hotels, big chains are now watching to see whether travelers who book pricey rooms continue to spring for extra services…or whether the sticker shock might start hurting demand.