🤯 What Nvidia's really worth

What’s going on here?

It’s a bird… It’s a plane... It’s Nvidia’s earnings flying beyond expectations again.

What does this mean?

Nvidia made 3% more revenue than analysts expected last quarter, while profit beat projections by 6%. That had a lot to do with the tech company’s new Blackwell AI chips. Nvidia described demand for them as “amazing”, contributing some $11 billion to its $39 billion of sales last quarter.

This financial year’s shaping up nicely so far, too: Nvidia thinks it’ll bring in some $42 billion of revenue. And although those Blackwell chips will lower its gross margins by more than analysts thought, the firm’s overall profit could still land a little higher than predicted this quarter – all else equal.

Why should I care?

For markets: Do that, but every quarter for the next decade.

Nvidia is expensive by almost every metric. But, like forking out for business class flights or a pure silk shirt, you might be able to justify the cost if the AI darling proves itself as a cut above the rest. So far, so good then, with the better-than-expected quarter it just reported. But Nvidia needs to grow at least 30% a year on average for the next decade to justify its current share price. Any sign of disruption to that trajectory could lead to a sharp selloff.

The bigger picture: DeepSeek and you shall find a risk.

Investors have two main concerns about Nvidia right now. One: DeepSeek’s efficient AI systems could reduce the number of chips needed. Then again, if cheaper models mean more folk use the tools, DeepSeek’s impact could expand the entire market – keeping Nvidia’s sales on track. Two: recent reports of Microsoft canceling its data center contracts could signal that Big Tech’s shrinking its big-bet budget. That said, Microsoft might just be spending differently, not less. The firm could simply be planning to use Oracle's data centers as part of their partnership rather than its own.

What’s going on here?

BP announced a turnaround from its previous renewable energy pledges on Wednesday – and this time, there was no need to yell.

What does this mean?

In a stunning twist that no one could’ve predicted, Big Oil shareholders decided money must come first. So, determined to drill up more of the slippery sludge, BP said it’ll increase its annual oil and gas spending by 20% to $10 billion in the next couple of years. That should put it on track to produce 2.5 million barrels of oil a day by 2030. And all BP had to sacrifice was, well, Mother Nature. To fund the moneymaking plot, the oil giant will slash its annual renewable energy spending by 70% to around $1.5 billion, as well as sell off a bunch of business segments to raise $20 billion and trim its share buyback program.

Why should I care?

The bigger picture: So much for activism.

Elliott Investment Management is one of the shareholders whispering in BP’s ear. That’s on brand: activist investors like Elliott buy up big stakes in companies and use that sway to influence strategic decisions, with the aim of making shareholders more money. So assuming BP’s switch-up proves lucrative, Elliott may take part of the credit. But that claim could be contended: governments and companies have recently shifted to favoring fossil fuel production over green initiatives, so BP might’ve dumped the do-gooding soon anyway.

For markets: They do say change comes from the bottom up.

BP’s pivot probably won’t scare off institutional investors – even those that care about the earth beneath our feet. See, they tend to push for change from within rather than ditching a company outright. And in fairness, BP’s green-minded budget is still in the billions. But retail investors are more judgmental: 42% said they’d avoid a profitable opportunity if it didn’t align with their values.