👋 ICYMI
After six months of newsletters covering wars, ceasefires, peace deals, record earnings, and record gold, it all came down to one company, one quarter, one Wednesday.
On Wednesday evening, Nvidia $NVDA ( ▼ 4.58% ) answered. Revenue of $96.22 billion — up 106% year over year and 4.5% above estimates. Adjusted EPS of $2.22 versus the $2.09 consensus. Data centre revenue of $89 billion, up 117% and now comprising 92% of total sales. And Q3 guidance of $108 billion — $3.8 billion above what Wall Street expected.
On Thursday, Nvidia surged 8.7% — its biggest single-day gain since April 2025 — adding $442 billion in market value in a single session. The S&P 500 rose 0.7% to 7,731 and the Nasdaq gained 1.6%. But the rally was remarkably narrow: technology was the only positive sector on Thursday, with the other ten S&P 500 sectors finishing in the red.
The week delivered another blockbuster. Salesforce $CRM ( ▲ 1.57% ) surged 22.6% on Thursday after reporting EPS of $5.90 versus $3.27 expected — a near-80% beat — on $11.35 billion in revenue. It was a powerful counter to the narrative that AI software companies can't monetise — Salesforce just proved they can.
On Friday, PayPal $PYPL ( ▼ 12.71% ) plunged 16% after Bloomberg reported that Advent International and Stripe had abandoned their $53 billion takeover pursuit. The collapse of what would have been the largest fintech deal in history leaves PayPal without a strategic bid and resets the stock to pre-deal-rumour levels.
Gold continued its extraordinary August run, with UOB forecasting that the metal is on track for its strongest monthly gain since September 1999 — up roughly 15% in August alone. Spot gold hit $4,720, a three-month high, supported by Treasury buybacks, a weakening dollar, and persistent hedging demand.
And at Jackson Hole, Fed Chair Kevin Warsh delivered his first major policy speech on Friday. Markets awaited clarity on whether the September 16–17 FOMC meeting would bring a hike, a hold, or a surprise.
🔁 Market Movers
🤖 Nvidia: $96.2 Billion. $108 Billion Guided. Questions Answered.
Revenue more than doubled year over year to $96.22 billion. Data center revenue hit $89 billion (+117% YoY), now 92% of total sales. Adjusted gross margins held at 74%. Q3 guidance of $108 billion ±2% exceeded the $104.2 billion consensus by 3.6%. Amazon announced a deal to buy 2 million Nvidia GPUs and deploy Nvidia's Vera CPU. CFO Colette Kress said top-five hyperscaler capex is expected to reach $1.3 trillion next year, up from $800 billion in 2026. Supply commitments more than doubled to $279 billion. Nvidia returned $26 billion to shareholders via buybacks and dividends during the quarter. And the company disclosed $7.8 billion in gains on equity investments — including stakes in Intel and SpaceX.
CEO Jensen Huang's message was clear: "The shift to agentic AI requires 15 to 100 times more compute." Dan Ives of Wedbush told CNBC the AI trade is "only in the third inning".
💻 Salesforce +22.6% — AI Software Can Monetize After All
Salesforce's Q2 blowout — EPS of $5.90 versus $3.27 expected, revenue of $11.35 billion — was the strongest earnings reaction in the software sector all year. After ServiceNow's 18% crash in April, IBM's worst day in 40 years, and months of underperformance in the software complex, Salesforce showed that AI-powered enterprise software can deliver revenue acceleration and margin expansion simultaneously. The stock's 22.6% jump was its best day in over two years.
💳 PayPal -16% — $53 Billion Deal Collapses
Stripe and Advent International walked away from their takeover pursuit of PayPal, sending shares down 16% on Friday. The deal, which would have valued PayPal at roughly $53 billion, was first reported in late July and had provided a floor under the stock. Without a strategic bid, PayPal faces renewed pressure. Recall that PayPal's CFO bought $255K in shares on June 15 — the day the Iran peace deal was announced — and the stock is now below that purchase price.
📊 Warsh at Jackson Hole — The September Signal
Fed Chair Kevin Warsh delivered his first Jackson Hole speech on Friday. Markets parsed every sentence for clues about whether the September 16–17 FOMC meeting would bring a rate hike. With the VIX at 14.51 and the S&P 500 near highs, the market is pricing in a hold — but Warsh's hawkish reputation means any hint of tightening bias could quickly reverse the risk-on sentiment.
👀 Signals I'm Watching
📈 Hyperscaler Capex to $1.3 Trillion in 2027
Nvidia's disclosure that top-five hyperscaler capital expenditure is expected to reach $1.3 trillion next year — up from $800 billion in 2026 — is the most important number in the earnings report. It means the AI infrastructure buildout is accelerating, not plateauing. When Microsoft $MSFT ( ▲ 1.68% ), Amazon $AMZN ( ▲ 3.97% ), Alphabet $GOOG ( ▲ 1.53% ), Meta $META ( ▲ 1.21% ), and Oracle $ORCL ( ▼ 0.72% ) together plan to spend $1.3 trillion in a single year, it validates every semiconductor, memory, networking, and power company in the supply chain. The concern that the AI capex cycle was peaking has been definitively answered — at least for the next 12–18 months.
🤖 The AI Software Narrative Just Changed
Salesforce's 22.6% surge is as important as Nvidia's 8.7%. For months, the market's verdict on AI was clear: hardware earners win, software spenders lose. Salesforce just proved that AI-powered software can deliver 80% earnings beats, margin expansion, and revenue acceleration simultaneously.
🥇Gold's Best Month in 27 Years Is Saying Something
When gold gains 15% in a single month — its best since 1999 — alongside record equity highs, it's not a contradiction. It's a signal. Gold is pricing in dollar weakness, fiscal deterioration ($1.8 trillion deficit), and the possibility that the Treasury's bond buyback intervention is the beginning of a longer period of financial repression. If the gold move is right, the dollar's decline will eventually feed back into import prices, complicating the Fed's inflation fight just as CPI appeared to be fading.
📊 The Narrowness Problem
Nvidia's +8.7% and Salesforce's +22.6% powered Thursday's market gains. But ten of eleven S&P 500 sectors closed in the red the same day. The rally is real, but it's narrow — increasingly dependent on a handful of AI-linked names to carry the index. That's sustainable when those names deliver (as they did this week), but it creates fragility when they don't.
$CRWD surge on Thursday post earnings
🦅Shares of CrowdStrike ($CRWD) — the cybersecurity leader and one of my favorite holdings — surged as much as 20% on Thursday after the company posted its strongest quarter ever.
Investment Club members were positioned accordingly. I first opened a position in CrowdStrike back in July, taking advantage of a period of short-term weakness despite the widespread view that the stock was overvalued. The Club knew the full thesis from day one.
Pumpkin spice latte season feels like the right moment to get back on financial track — which is why I've put together a limited-time offer for newsletter readers. If you'd like to follow along, get full access to my deep dives, and join a community of long-term growth investors, you can become a member here.
Thank you for your continued support,
George
⚠️ Red Flag to Note
The Third Inning Means Seven More to Go
Dan Ives says the AI trade is "only in the third inning." Nvidia's supply commitments doubled to $279 billion. Hyperscaler capex reaches $1.3 trillion next year. These are extraordinary numbers — and they assume a future that requires continuous execution over the next five to seven years.
In the third inning, the game's direction is clear but far from decided. The risk isn't that AI demand slows tomorrow — it's that the market has already priced five years of growth into today's valuations. Nvidia trades at roughly 35x forward earnings. Salesforce jumped 22% in a day. The SOX index is up over 60% year to date. If at any point the revenue growth rate decelerates — not declines, just decelerates — the repricing could be swift. The AI trade has proven its fundamentals in 2026. The question for 2027 and beyond is whether execution can match expectations that are now measured in trillions.
🔍 Insider Transactions I’m Watching
Ticker | Insider | Action | Value | Why It Matters |
|---|---|---|---|---|
Nvidia (Company) | Buyback | ~$26B (Q2) | Nvidia returned $26 billion to shareholders through buybacks and dividends in a single quarter — roughly $100 billion annualized — while simultaneously investing in Intel and SpaceX (generating $7.8B in equity gains). | |
Jamie S. Miller — CFO | Bought June 15 | ~$255K | PayPal's CFO bought $255K in shares on the day the Iran peace deal was announced. The stock is now below that price after the $53B Stripe/Advent deal collapsed on Friday. The CFO's buy looked well-timed for two months — until the deal fell apart. A reminder that even insider signals can be overtaken by events. | |
Richard Beckwitt — Director | Buy | ~$1.26M (3-day cluster, Aug 11–13) | The Dream Finders Homes director's $1.26M cluster buy from last week continues to stand out. The homebuilder is down 47% over the past year and trading near its 52-week low. With the Treasury now intervening to cap yields — which directly affects mortgage rates — Beckwitt's bet on housing at these levels looks increasingly well-timed. |
📬 Closing Note
Six months ago, we started covering the first week of the Iran war. Oil was surging past $100. The S&P 500 was entering correction territory. Consumer sentiment was collapsing. And the question dominating every market conversation was whether the world was heading for a global recession.
In the months since, we've covered the war's escalation, the ceasefire, the peace deal, the Fed's most divided meeting in 34 years, the SpaceX IPO, Intel's resurrection, Micron's trillion-dollar moment, Apple's CEO transition, Meta's cloud launch, the Treasury's bond market intervention, gold's best month since 1999, and now — Nvidia's $96 billion quarter.
Through all of it, the underlying story has been remarkably consistent: AI demand is real, it's accelerating, and it's generating the kind of corporate earnings growth that absorbs almost any macro shock.
For investors who have been patient, selective, and guided by the data — this has been one of the most rewarding stretches in market history. The S&P 500 is up roughly 10% year to date. Corporate earnings are growing 25%+. And the AI trade has broadened from one company into an entire investment ecosystem.
It's been an extraordinary six months. Thank you for reading every Sunday.
Stay patient. Stay selective. And let the data guide the story.
Until next Sunday —
