Nvidia posts strong results despite China uncertainty

Today’s agenda: US envoy to Denmark summoned over Greenland; E3 readies Iran sanctions; Blair at Gaza plan meeting; and the carmakers trailing in a software race.

Good morning. We start with artificial intelligence chipmaker Nvidia’s closely watched results, which were released yesterday amid market jitters about AI demand and how its China chip business will navigate geopolitical tensions between Washington and Beijing.

Strong results: Nvidia reported revenues of $46.7bn for the quarter to July 28, up 56 per cent year on year and slightly above consensus estimates of $46.5bn. The company expected around $54bn in sales for the current quarter, better than expectations of $53.8bn.

Despite the solid results, its shares fell 3 per cent in after-hours trading as the report failed to ease uncertainty over sales of Nvidia’s AI chips in China.

China business woes: The world’s most valuable company has become entangled in US President Donald Trump’s trade war with Beijing. The Trump administration earlier this year blocked exports of Nvidia’s H20 chip designed for the Chinese market. Nvidia then cut a deal to allow sales to resume in exchange for giving the US government 15 per cent of the revenues. But it is still unclear how quickly sales might recover.

An analyst noted that Nvidia’s decision not to include AI chip revenue from China in its financial guidance led to some investors’ expectations being disappointed. Read more reaction on the chipmaker’s results.

Here’s what else we’re keeping tabs on today:

• Central banks: The European Central Bank publishes minutes of its July meeting. Federal Reserve Board governor Christopher Waller speaks in Miami.

• Results: Delivery Hero, EVN and Pernod Ricard report earnings.

Five more top stories

1. Denmark “needs to calm down”, said the White House after the top US diplomat in the country was called in over reports that American citizens with alleged links to President Donald Trump had been conducting covert influence campaigns in Greenland. Lars Løkke Rasmussen, Danish foreign minister, had accused “foreign actors” of trying to sway the future of the Arctic island.

2. The UK, France and Germany are preparing to set in motion a UN process to reimpose sanctions on Iran over its nuclear programme, European officials have said, in a move that would heighten tensions between the west and Tehran. The E3 are expected to trigger the “snapback” mechanism today as hopes of a diplomatic breakthrough fade.

3. Donald Trump held a meeting at the White House with former UK prime minister Tony Blair and top officials to discuss a new “comprehensive” postwar plan for Gaza, as Israel prepares to launch another invasion of the besieged enclave. Read more on US efforts to devise a day-after proposal for the war- and famine-ravaged strip.

4. Exclusive: Hedge funds and private investors muscling into reinsurance threaten to destabilise the centuries-old market for catastrophe cover, a director at Munich Re, the world’s biggest reinsurer, has warned. The sector’s shifting shape has introduced new risks and greater volatility, he said.

5. Exclusive: Big UK banks are bracing for losses on billions of pounds in loans to troubled British broadband providers, as the weakest players in the nascent fibre sector battle mounting financial pressure. Find out which lenders are exposed to struggling “altnets”.

The Big Read

The world’s biggest carmakers are racing to develop software-defined vehicles like those produced by Tesla and a new generation of Chinese manufacturers. But for many of the industry’s traditional companies, the shift from a manufacturing model to a digital one is proving difficult and expensive.

We’re also reading . . . 

• ICE Air: Companies are jostling for a piece of the booming business of flying immigrant detainees out of the US.

• Riyadh’s long wait: The last of a series on Middle East financial centres pores over Saudi Arabia’s ambitious plans to become a regional hub.

• From widows to CFOs: Women inheriting large estates have to deal with emotional loss and financial complexity — often with limited preparation.

• Culture war controversy: Cracker Barrel, known for its Southern-style comfort food, became a Maga lightning rod after the US restaurant chain simplified its logo.

Graphic of the day

Russian President Vladimir Putin is demanding that Kyiv cede the Donbas, a proposition rejected by Ukrainian President Volodymyr Zelenskyy. The matter is not simply one of principle or legality, Ukrainian officials and soldiers say. In northern Donetsk, a 45km belt of heavily fortified cities has become the last major line of defence in the region. Fabrice Deprez sends a dispatch from Ukraine’s “fortress belt”.

Take a break from the news . . . 

Everyone hates being ambushed by hidden charges during holiday travel. However, few of us are savvy enough to dodge them and avoid paying too much, writes Tim Harford.