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  • 💼 Nvidia’s AI Boom Slows

💼 Nvidia’s AI Boom Slows

+ Amazon Bets Big on AI With Revamped Alexa+

February 26, 2025

Good afternoon! Fyre Festival is making a comeback, and this time, Billy McFarland swears it won’t be a disaster. Set for May 30–June 2 in Mexico, Fyre Festival 2 promises a "three-day escape" with luxury accommodations and a lineup of yet-to-be-named artists. Tickets range from $1,400 to a jaw-dropping $1.1 million, with McFarland himself offering exclusive adventures like scuba diving.

Despite its infamous history, McFarland claims the festival has an "incredible production company" handling logistics to avoid another PR nightmare. At least $500,000 from ticket sales will go toward the $26 million he still owes in restitution, but buyers might want to keep those expectations—and refund policies—on standby.

MARKETS

*Stock data as of market close*

  • Stocks kicked off strong but lost steam after President Trump confirmed 25% tariffs on EU goods, adding pressure to an already tense trade environment. The S&P 500 barely edged higher, breaking a four-day losing streak, while the Dow slipped 0.4% as investors reassessed the economic outlook.

  • The Nasdaq Composite managed a 0.3% gain, though it had been up nearly 1% earlier in the day. Market optimism faded as traders braced for more volatility, with uncertainty around trade policy keeping investors on their toes.

STOCKS
Winners & Losers

What’s up 📈

  • Axon Enterprise soared 15.25% after strong Q4 earnings and forward guidance, with EPS and revenue topping estimates. ($AXON)

  • Super Micro Computer jumped 12.23% after filing its long-overdue earnings report just in time to avoid Nasdaq delisting. ($SMCI)

  • Intuit surged 12.58% on a strong earnings report, proving that TurboTax frustration translates into big profits. ($INTU)

  • Workday climbed 6.22% after beating Q4 earnings expectations on both revenue and profit. ($WDAY)

  • NRG Energy popped 10.63% after announcing a partnership with GE Vernova and Kiewit to increase electricity generation for AI demand. ($NRG)

  • Anheuser-Busch InBev gained 7.21% after beating Q4 earnings expectations, with revenue and profit exceeding forecasts. ($BUD)

  • General Motors climbed 3.75% after announcing a 25% dividend increase and a $6 billion share buyback plan. ($GM)

What’s down 📉

  • Flywire plummeted 37.36% after missing top and bottom line estimates and announcing a 10% workforce reduction. ($FLYW)

  • Lucid Group dropped 13.60% despite beating earnings, as investors reacted negatively to the sudden CEO departure. ($LCID)

  • Instacart tumbled 12.26% after missing Q4 revenue estimates and issuing soft guidance for the next quarter. ($CART)

  • AppLovin slid 12.22% after short-seller reports accused the company of ad fraud and data theft. ($APP)

  • Advance Auto Parts sank 17.83% after forecasting a 2% drop in Q1 same-store sales, worse than expected. ($AAP)

  • Stellantis fell 5.27% after reporting a 70% decline in fiscal 2024 profit, missing analyst expectations. ($STLA)

EARNINGS
Nvidia’s AI Boom Slows as Investors Look for the Next Big Pop

Nvidia has been riding the AI wave like a champion surfer, but this quarter, it looks like the tide is starting to settle. The chipmaker posted a 78% jump in revenue to $39.3 billion, along with a massive 80% spike in profit, but after two years of blowing past expectations, the bar was set sky-high. Investors were hoping for fireworks, and instead, they got a solid but unspectacular earnings report.

Blackwell Hits the Market, But Margins Take a Hit

CEO Jensen Huang was all-in on the company’s next-gen AI chip, Blackwell, calling demand for it “amazing” and touting its $11 billion in revenue as the fastest product ramp in Nvidia’s history. But the excitement was tempered by Nvidia’s shrinking profit margins, which dropped to 73%, down three points from last year, thanks to the high cost of rolling out its latest AI hardware.

Even more concerning? Wall Street was expecting more. The company’s Q1 revenue guidance of $43 billion barely edged out estimates, leading some to wonder if Nvidia’s explosive growth is finally normalizing.

Tariffs, DeepSeek, and AI Competition Loom

Nvidia isn’t just battling high expectations—it’s also facing some serious headwinds. There’s concern over U.S. tariffs, which could make Nvidia’s AI chips pricier for global buyers. Then there’s DeepSeek, a Chinese AI startup that rattled investors last month by unveiling an AI model that runs on far fewer Nvidia chips—potentially signaling a shift toward more efficient AI development.

But Huang isn’t worried. He shrugged off the DeepSeek threat, arguing that future AI models will require up to 100x more computing power, which should keep demand for Nvidia chips soaring.

What’s Next? With its stock up over 800% in two years, Nvidia has been the undisputed AI darling of Wall Street. But this quarter’s “good, not great” results show that the AI gold rush may be getting a little harder to mine. Investors will be watching closely to see if Nvidia’s Blackwell chips deliver the next growth wave or if the competition is finally starting to catch up.

NEWS
Market Movements

TECH
Amazon Bets Big on AI With Revamped Alexa+

Amazon is finally giving Alexa a serious AI upgrade—and slapping a price tag on it. Alexa+, the company’s new AI-powered assistant, will roll out next month, promising to be smarter, more conversational, and more proactive than its predecessor. Prime members get it for free, while everyone else will have to fork over $19.99 per month.

Alexa, Do Something Useful

For years, Alexa has been stuck in a loop of setting timers, playing music, and answering the occasional trivia question. Now, Amazon is betting on generative AI to make it an actual digital assistant. Alexa+ can now book restaurant reservations, analyze documents, create calendar events, and even monitor security camera footage to confirm if you walked the dog.

Unlike the old Alexa, which mostly pulled responses from a static database, Alexa+ is powered by Amazon’s Nova AI models, alongside Anthropic’s AI tech (Amazon has invested up to $8 billion in Anthropic). This means Alexa can now hold fluid conversations, remember user preferences, and act as a full-fledged AI agent.

Alexa’s Long Road to AI Greatness

Amazon had originally planned to launch an AI-powered Alexa in early 2024, but the project hit delays when internal tests showed it wasn’t ready for prime time. Some early users said Alexa’s responses dragged on too long, while others found it lacking compared to ChatGPT. The problem? Alexa wasn’t built to generate answers—it was designed to fetch pre-written ones. Amazon had to rewire the entire system.

The delay left Alexa looking outdated in an AI arms race where OpenAI, Google, and Meta were making rapid progress. Meanwhile, Amazon’s devices division had already burned through tens of billions of dollars, struggling to monetize Alexa’s massive user base.

Will People Pay for Alexa?

This is the first time Amazon is charging a subscription for Alexa, and it’s a big gamble. Unlike ChatGPT or Claude, which are available in free versions, Alexa+ is locked behind a paywall unless you're a Prime member.If Alexa+ can prove itself useful beyond what Siri and Google Assistant already do, Amazon might finally turn Alexa into a profitable business instead of just another expensive gadget. But if it stumbles? Consumers might not be willing to pay $20 a month for a fancy smart speaker upgrade.

Alexa+ will launch in March with early access for select users, and Amazon is promising continued upgrades to keep it competitive in the fast-moving AI space. The real test? Whether Alexa can finally be more than just a glorified voice-activated kitchen timer.

Calendar
On The Horizon

Tomorrow

Thursday is packed with economic data, starting with the latest read on initial jobless claims. Normally a snooze-fest, this report is getting extra attention as economists monitor for any ripple effects from the latest round of DC layoffs. Also on deck: pending home sales, a second revision of Q4 GDP, and durable goods orders, all offering fresh clues on where the economy is headed.

On the earnings side, there’s no shortage of action. Reports are rolling in from Vistra ($VST), Toronto Dominion Bank ($TD), Norwegian Cruise Lines ($NCLH), Warner Bros. Discovery ($WBD), Bath & Body Works ($BBWI), The Mosaic Company ($MOS), Hormel Foods ($HRL), CubeSmart ($CUBE), Monster Beverage ($MNST), and Duolingo ($DUOL).

After Market Close:

  • Dell has been chasing the AI boom for so long that it might have finally caught up. New partnerships with AMD and xAI are boosting its AI server business, while a broader tech refresh cycle could give PC sales a much-needed lift. Yet, its low valuation still makes it look like a company with little to offer—setting up the perfect storm for a surprise breakout if earnings impress. Consensus: $2.51 EPS, $24.53 billion in revenue. ($DELL)

  • HP is still lagging behind Dell in both stock performance and AI business development. The company has set its sights on enterprise AI, a space with massive potential but little immediate payoff. Meanwhile, its planned acquisition of Juniper Networks remains under scrutiny by the Justice Department, and investors will be eager to hear how the deal might fare under a new administration. Consensus: $0.74 EPS, $13.38 billion in revenue. ($HPQ)

NEWS
The Daily Rundown

  • 🎈 Party City Shuts Down After Second Bankruptcy: After nearly 40 years in business, Party City is closing its doors, following a failed restructuring and $800 million in remaining debt. Some franchisees will keep 29 stores open, while retailers like Dollar Tree and Five Below are taking over its vacated locations.

  • 🏺 Egypt’s Grand Egyptian Museum to Open in 2025: After two decades of development, Egypt’s $1 billion Grand Egyptian Museum is set to open on July 3, 2025. The cultural landmark will house over 100,000 artifacts, including King Tutankhamun’s treasures, and is expected to boost Egypt’s tourism industry with an unparalleled historical showcase.

  • 📉 US Companies Hesitate to Return to Russia: Russia is courting American businesses to re-enter its market, with President Trump and Vladimir Putin discussing economic opportunities. However, political risks, sanctions, and prior asset seizures have made companies wary of reinvesting. Most multinationals earned less than 1% of their revenue in Russia before the war, making the market less attractive.

  • 🚢 Taiwan Detains Chinese Ship Suspected of Cutting Undersea Cable: Authorities in Taiwan intercepted a Chinese-crewed freighter suspected of severing a vital undersea communications cable. While China denied knowledge of the incident, Taiwan views it as part of ongoing "gray zone" tactics, with similar disruptions reported globally.

  • 💰 Consumer Confidence Drops Amid Inflation and Tariff Concerns: The Conference Board’s Consumer Confidence Index saw its biggest monthly decline since 2021, as Americans worry about rising prices and potential trade wars. Economists warn that Trump’s proposed tariffs on key trade partners could worsen inflation, despite overall economic growth.

  • 💊 Eli Lilly Cuts Price of Weight Loss Drug to Fend Off Competition: The pharmaceutical giant reduced the price of Zepbound vials by about $50 to compete with cheaper alternatives. The company aims to maintain market dominance as demand for weight-loss treatments surges, though patients must now self-administer the drug with syringes.

  • 💸 Trump Administration’s Canceled Contracts Fail to Save Money: A review found that nearly 40% of federal contracts cut by Trump and Elon Musk’s Department of Government Efficiency (DOGE) won’t actually reduce costs. Many projects had already been funded, raising doubts about the administration’s cost-cutting claims.

  • 🔄 Unilever Ousts CEO in Leadership Overhaul: Unilever announced the departure of CEO Hein Schumacher after less than two years, replacing him with longtime executive and CFO Fernando Fernandez. The leadership shake-up signals the company’s intent to accelerate its turnaround strategy and pursue more aggressive changes.

  • 🚗 Tesla’s European Sales Plummet as Rivals Surge: Tesla’s sales in Europe tumbled 45% in January, a stark contrast to the 34% growth in overall EV sales across the continent. Analysts cite growing competition from European and Chinese automakers, along with potential consumer backlash against Elon Musk’s political involvement, as key factors behind the decline.

RESOURCES
The Federal Reserve Resource

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