Nvidia Earnings Are In

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EARNINGS: Nvidia

Nvidia saw its stock rise in premarket trading after a strong sales forecast. The company expects second-quarter revenue of $28 billion, above the $26.8 billion predicted by analysts. In the first quarter, Nvidia’s revenue tripled to $26 billion, with earnings of $6.12 per share, exceeding analysts' expectations.

Nvidia's stock has climbed 92% this year, and CEO Jensen Huang highlighted a new AI era. The company announced a 10-for-1 stock split and a 150% dividend increase to 10 cents per share. Nvidia’s AI accelerators have driven its market value to over $2.3 trillion. Major customers like Amazon, Meta, Microsoft, and Google account for 40% of sales. Nvidia’s data-center division generated $22.6 billion last quarter, while gaming chips contributed $2.6 billion, meeting projections.

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MINUTES: Federal Reserve

At their recent meeting, Federal Reserve officials expressed growing concern about inflation and were hesitant to lower interest rates. Minutes from the April 30-May 1 Federal Open Market Committee meeting showed uncertainty about when to ease policy, as inflation remained higher than expected. The Fed's target is 2%, but recent data showed price increases above this level.

Some officials indicated a willingness to tighten policy further if needed. The committee unanimously voted to keep the benchmark short-term borrowing rate at 5.25%-5.5%, its highest since July 2023. Since the meeting, inflation signs showed slight improvement, with April's consumer price index at a 3.4% annual rate. However, consumer sentiment surveys reflected growing concerns about inflation, particularly among lower-wage earners.

ALEXA: Time To Upgrade

Amazon is upgrading Alexa with generative AI and plans to charge a monthly subscription fee to cover the technology costs. Later this year, Amazon will release a more conversational version of Alexa to compete with new AI-powered chatbots from Google and OpenAI.

The subscription will be separate from the $139-per-year Prime membership, and the price hasn't been decided yet. Amazon declined to comment. When Andy Jassy became CEO in 2021, priorities shifted, and Alexa became less important. Jassy has been reportedly disappointed with Alexa’s current capabilities.

Chart of the Day

📊How Nvidia Makes Money

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