Commentary: US$13 billion Hugging Face deal would crown Nvidia king of AI

Nvidia reported $96.2B revenue, up 106% YoY, with data center contributing $89B. CEO Jensen Huang highlighted AI's growth. Nvidia is financing AI infrastructure, extending credit, and partnering with firms like BlackRock and KKR. Morgan Stanley estimates $200B exposure by 2028, mostly off-balance-sheet. Risks include AI monetization and wrong-way risk. Nvidia's role extends beyond chipmaking, impacting its financial profile.

Nvidia (NVDA) reported $96.2B revenue in Q2, up 106% YoY, with data center revenue at $89B, up 117%. GAAP EPS was $2.46. The Trump administration is considering broader semiconductor tariffs, potentially affecting Nvidia's growth. Nvidia's data center division accounts for 92.5% of sales, highlighting its exposure to AI infrastructure demand and potential tariff impacts.

The Trump administration is drafting a rule to ban renting Nvidia GPU computing time to Chinese AI firms via servers in Thailand and Singapore, but experts question its legal authority. The rule aims to close a loophole created by previous administrations' interpretations of export laws. The move follows concerns about China's access to advanced US AI chips, highlighted by the Kimi K3 model's release, which caused a market reaction. Nvidia stated it complies with export controls.

Nvidia reported $96.2B revenue, up 18% QoQ, with data center sales at $89B. Gross margin was 75%, but guidance suggests a drop to 74% due to rising memory costs. CFO Colette Kress cited increased memory procurement costs as the reason. This benefits Micron, a memory supplier, as Nvidia's higher memory commitments may lead to higher prices for suppliers.

Nvidia reported strong Q2 earnings with $96.2B revenue, driven by 117% YoY growth in data center sales. However, rising memory costs, particularly high-bandwidth memory, are reducing gross margins, which Nvidia attributes to increased component procurement costs. The company expects margins to decline further before recovering in fiscal 2028. This trend benefits memory suppliers like Micron Technology, as Nvidia's higher memory commitments suggest increased pricing power for suppliers.

Fed Chair Warsh rejected the Phillips curve, attributing inflation to fiscal deficits and money creation. NVIDIA (NVDA) reported $96B revenue, CAT (CAT) hit $20.5B quarterly sales. JPMorgan (JPM) posted 23% ROTCE. Warsh's stance may reduce rate volatility, benefiting growth stocks, industrials, and banks.