What’s bigger than Google? Nvidia tops trillion-dollar valuation on AI demand for chips.
Has generative AI hit the tipping point? That’s the explanation Nvidia’s CEO, Jensen Huang, made Wednesday when the Silicon Valley computer-chip maker reported sales and earnings that sent its shares soaring. Nvidia’s stock has climbed roughly 60% this year, and an imposing 1,650% over the past five years, surging past Google and Amazon to become the fourth most valuable company in the world, with a market cap of $1.9 trillion. That’s because Nvidia made a smart switch from complex chips for gaming to those that power AI. Goldman Sachs called Nvidia “the most important stock on planet earth,” and with artificial intelligence still in its infancy, the growth story is far from over, legendary tech investor Gene Munster, head of Deepwater Asset Management, wrote on X. “There are three bigger AI waves to still to come (enterprise, heavy industries and sovereign AI) that should be positive for demand for the next several years.”
Fubo Fubar? Sports spat as bundle dream team is flagged in antitrust lawsuit.
Sports streaming service Fubo has dropped a flag on the sports bundle announced this month by Disney, Fox and Warner Bros. Discovery, claiming it's being undercut by the same people it has to buy its programming from. In a lawsuit filed in federal court in New York, Fubo asked that the deal be halted and better terms set for its own contracts with the trio. CEO David Gandler fumed that the three networks have been waging “a years-long campaign to block Fubo’s innovative sports-first streaming business” at consumers’ expense. Fubo says it’s forced to carry non-sports programming and is being charged 30% to 50% more for the same games than other streaming outlets, all as part of an alleged plan to put it out of business. The new service would reportedly sell for about $50 a month, while Fubo’s English-language offers range from $80 to $100 a month. The three-way tie-up still has to pass scrutiny by federal antitrust regulators, so Fubo’s suit may yield dividends even before it is tried. As Gandler commented in a statement, “This sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves.”
Food is eating up your income; Blame shrinkflation and profit-pumping
We’re not all going hungry yet, but American consumers are spending more on food and getting less bread for their buck. For the first time in more than three decades, Americans’ spending on food topped 11.3% of the average household budget, according to data from the U.S. Dept of Agriculture. Some of that is carry-over from the pandemic when logistics squeezes and labor shortages raised the price of almost everything. Now that commodity prices are falling—wheat is down by half since its pandemic-era peak—retail prices should be dropping, but companies are keeping prices and profits high, with supermarket bills rising about 1.2%and restaurant prices up 5.2% in the past year, compared with 3.2% overall inflation. That doesn’t sit well with many Americans. “Ice cream cartons have actually shrunk in size, but not in price,” President Biden said in an Instagram post slamming so-called “Shrinkflation” that he posted during the Super Bowl. “I’m calling on companies to put a stop to this,” he added. Some of the price hikes have damped consumers’ appetites, cutting into sales and company share prices. An S&P 500 subindex of restaurant stocks has risen just 10% in the past 12 months, while the broader index gained about 25%. An S&P subindex tracking packaged food and meat companies fell roughly 8%, the Wall Street Journal reported.
Tick-tock, TikTok, the EU is coming for you!
The European Union says it’s opened an inquiry into whether TikTok is dangerous for kids. EU industry chief Thierry Breton said regulators will be looking at “addictive design & screen time limits, rabbit hole effect, age verification, default privacy settings,” in a post on X.
TikTok's owner, China-based ByteDance, could be fined up to 6% of its global revenue if the company is found guilty of breaching EU rules. The EU fined TikTok $370 million in September for weak safeguards on personal data of kids using the platform, and says TikTok’s design issues could potentially compromise a person’s “physical and mental well-being.” As anyone knows who’s ever surfed car crashes and dance moves on TikTok, we’re all kids.
Capital One’s $35.3 billion offer for Discovery might not be a good deal for consumers.
One thing every consumer knows is that credit card companies do what’s best for the company, not for consumers. So there’s ample reason to be skeptical of the plan by Capital One Bank to buy the beleaguered consumer credit card company Discover for $35.3 billion. Sure, market leaders Visa and MasterCard could use some competition, and the new company might even boost its luxury perks to win more customers. But there’s a downside to consolidation in the U.S.’s ever-growing credit market. As Massachusetts Sen. Elizabeth Warren, the body’s top consumer advocate, warned in a post on X, the tie-up “threatens our financial stability, reduces competition, and would increase fees and credit costs for American families.” A study last week by the Consumer Financial Protection Bureau found that large credit card firms charge interest that’s 8 to 10 percentage points higher than rates charged by community banks and smaller card issuers. That matters when the total household debt in the U.S. stands at $17.5 trillion, up $3.4 trillion since the end of 2019, and credit card balances rose 4.6% from September to December, to $1.13 trillion.
