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The chips run on Nvidia

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Chip giant Nvidia's share price has risen steadily over the past year and a half, driven by investors' hopes that artificial intelligence is a truly transformative technology – And through their hopes that the company's high-performance semiconductors will continue to power that technology.

But in recent days the company became the third most valuable publicly traded company in the US, before falling to fifth place. The shares will face another big test on Wednesday when Nvidia reports its latest quarterly results, with billions in investor capital at stake.

Brace yourself for a big step. After the price more than doubled since May due to soaring demand for Nvidia chips, investors are wondering if the peak is close to being reached. Opinions on Wall Street seem divided: Bloomberg reports that options traders have been looking into both put options, whose value rises when the price of a share falls, and call options. That means Nvidia's market cap could do that will increase by approximately $180 billion on Wednesday.

These bets “suggest that the post-results price increase will be 10.5 percent in either direction, so watch for possible fireworks in either direction,” Jim Reid, a strategist at Deutsche Bank, wrote to investors on Wednesday.

That is after Tuesday's drop in Nvidia shares wiped out $78 billion in market value. It's worth remembering that Nvidia has become one of the largest components of the S&P 500, making it one of the most widely distributed stocks. That dip helped push the index into the red on Tuesday, demonstrating Nvidia's market-moving power.

What to pay attention to: Analysts have made a prediction that Nvidia's fourth-quarter revenue more than tripled year-over-year, and its net profit for the year rose roughly sevenfold, thanks to the company's booming data center business and robust demand for its chips.

Investors will also be paying attention to the outlook for the coming year, given how Nvidia has become entangled in trade tensions between Washington and Beijing. China was one of the company's fastest growing markets, but it is now banned from selling its best chips there. Chinese rivals are seen as fast bridging the gap between their wares and those of Nvidia; Internal AI chips are also being built by Amazon, Google, Meta and Microsoft.

  • The market is also focused on the minutes of the Fed's latest meeting: Traders have scaled back their bets on rate cuts after last week's warmer-than-expected inflation data, and Wednesday's release could provide new insight into when the central bank might can start lowering interest rates. financing costs.

President Biden's campaign is outpacing Donald Trump's. Biden's reelection effort had $56 million in cash at the end of January, compared to about $30 million for the Trump campaign. That reflects both Democratic donors who appear to be uniting behind the president and Trump growing legal costs. Separately, New York Attorney General Letitia James said she would consider doing so seize Trump's assets if he is unable to pay a $354 million judgment in the civil fraud case she filed against him.

The FTC and the states are reportedly planning to file a lawsuit to block Kroger's acquisition of Albertsons. The agency and attorneys general are preparing for this disputes the $24.6 billion supermarket deal As soon as next week, according to Bloomberg. Their expected lawsuit would allege that a deal would lower workers' wages and raise costs for consumers.

HSBC's profits plummet after a $3 billion charge in China. Fourth quarter profit up Europe's largest bank fell by 80 percent after a write-down on its stake in the Bank of Communications and a $2 billion hit on the sale of its French retail operations. Shares of HSBC fell on Wednesday on concerns that the slowdown in China, one of HSBC's biggest markets, could hurt its business.

Harvard is trying to contain a new controversy over anti-Semitism. The university's interim president, Alan Garber, condemned a social media post spread by two student organizations and a faculty organization with what he called “despicable and hateful anti-Semitic tropes.” The groups later disavowed the cartoon, but the episode is the latest controversy at Harvard following the October 7 Hamas-led attacks on Israel.

Capital One's $35.3 billion deal to buy Discover Financial was always going to be difficult to get past financial regulators because it would lead to the creation of a new credit card giant.

Public opposition to the transaction already appears strong, as consumer interests worry about combining two major lenders.

The companies' CEOs acknowledged that regulators could be skeptical. During an analyst call on Tuesday, Richard Fairbank, the head of Capital One, hinted that he would become a stronger competitor to both the larger banks and Visa and Mastercard, the nation's largest payment network operators:

  • “The increased scale and reach of our combined franchise will position us to compete more effectively with some of the largest banks and payments companies in the United States.”

  • “There are only two vertically integrated U.S. payment networks, American Express and Discover, and they compete with Visa and Mastercard, which are obviously much larger.”

Worth noting: a combined Capital One and Discover JPMorgan Chase would surpass By one estimate, it is the country's largest credit card issuer, and the lender is expected to move some of those cards to Discover's payment network.

Otherwise, Fairbank had little say in potential problems. He told analysts: “We believe we are well positioned for approval, but we obviously cannot discuss our discussions with our regulators. Naturally, we kept them informed throughout the process.”

Critics of the deal did not seem reassured by Capital One's argumentspointing to data points such as a recent report from the Consumer Financial Protection Bureau, which found that larger issuers (such as Capital One) charge borrowers more than smaller rivals.

  • “This Wall Street deal is dangerous and will hurt working people,” Senator Elizabeth WarrenDemocrat of Massachusetts, posted Tuesday on the social network X. “Regulators should block this immediately.”

  • “Capital One has a pattern of making deals that benefit the bank but not its customers and communities.” Jesse Van Tolthe CEO of the National Community Reinvestment Coalition said in a statement.

The Justice Department has not said anything publicly and will not be the main regulator looking at the Capital One deal (but will be able to weigh in). Still, bank watchers have pointed out to DealBook one speech last year by Jonathan Kanterthe department's antitrust chief, calls competition between banks “vital” and says reviewing such deals requires recognizing “modern market realities.”

The fate of corporate diversity efforts already looked bleak after the Supreme Court last year rejected affirmative action as a factor in admissions to U.S. colleges. Now, a rare action by an appeals court to challenge Nasdaq's attempt to increase board diversity is raising new questions about whether the exchange's initiative can survive.

Nasdaq wants more board diversity data than the law requires. In 2020, the exchange asked the SEC to approve a rule that would require thousands of publicly traded companies to disclose information about the composition of their boards of directors or face delisting. The SEC later approved it.

Two groups challenged the rule in court and lost before a panel of the U.S. Court of Appeals for the Fifth Circuit in October. The plaintiffs included a group founded by Edward Blum, a conservative activist who was also behind another organization that filed the lawsuits that led to the positive Supreme Court ruling.

But the Fifth Circuit agreed Monday to reconsider the challenge en banc, with all judges set to review the case after a hearing scheduled for May. The court has a reputation for being prepared to do this entertain and approve unusual legal theories.

Nasdaq declined to comment, while an SEC spokeswoman said the agency would continue to defend its actions. Blum did not respond to a request for comment.

It is becoming increasingly difficult for companies to understand the changing landscape. Republican attorneys general have done so threatened companies that are adopting diversity initiatives, and companies are struggling to figure out the legality of their programs.

That wariness manifests itself in sometimes unexpected ways: During a webinar on Tuesday hosted by the Aspen Institute Business and Society Program on the future of such initiatives, speakers insisted not to be named or quoted.

The Department of Labor on Wednesday will release its first measure of the “year of the strike” for corporate America, including disruptive work stoppages by major unions like SAG-AFTRA and the UAW.

But labor experts say the effect will almost certainly be underestimated because the data will not reflect the emerging trend of organizing smaller workplaces.

Smaller strikes are also a big problem. The Labor Action Tracker Research by researchers at Cornell and the University of Illinois Urbana-Champaign shows that there were 470 strikes and lockouts last year, amounting to almost 25 million strike days. The hotel and food industry accounted for the largest share of work stoppages found in the survey, but the smallest share of worker walkouts.

But Wednesday's Labor Department data is likely to understate that impact because it doesn't take into account work stoppages involving fewer than 1,000 workers. This inequality has been exposed before: the Labor Department counted 23 strikes in 2022, while Labor Action counted 433 strikes.

Unions see the need to gain a foothold in smaller workplaces, also at units of larger companies such as Starbucks. “For unions to be successful in representing workers, employment growth in smaller companies requires them to be able to organize these smaller workplaces,” Alex Colvin, dean of Cornell's School of Industrial and Labor Relations, told DealBook.

Changing tactics is another focus of Labor Watchers. The number of one-day strikes is increasing, Colvin said. And the UAW created a ripple effect when it staged plant shutdowns instead of an across-the-board strike, a strategy that kept management in the dark and helped the union focus longer on the Big Three automakers. That helped the country achieve major victories in the negotiations.

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