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Luke Kawa

Nvidia tumbles after hyperscaler earnings, with GPUs no longer the missing ingredient in the AI boom

On the surface, it’s difficult to see that Nvidia is getting clobbered after the Magnificent 7’s four hyperscalers reported earnings after the close on Wednesday.

The 2026 capex guidance for this group — which went up about $15 billion thanks to Meta and Google’s updates — has been a shorthand for Nvidia’s earnings outlook throughout the AI boom. That makes sense, as it’s one of the biggest suppliers to all four firms.

But the AI boom evolves, and one reason being offered for Nvidia’s sharp sell-off is that its most important product — GPUs — simply aren’t the key missing ingredient in the AI boom right now. Rather, they’re something these companies are trying to do without while building up their own suite of offerings.

After a spike during Q4 earnings, hyperscalers aren’t talking as much about the OG brains behind the AI boom...

...but they are talking a lot about the hardware they’re bringing to the table...

Amazon CEO Andy Jassy:

“Nobody has a better set of chips across AI and CPU workloads than AWS with Trainium and Graviton, and we’re unusually well positioned for this AI inflection we’re in the early stages of experiencing. While the largest number of AI chips we’re bringing in are Trainium, we continue to have a deep partnership with NVIDIA. We have immense respect for them, continue to order substantial quantities, we’ll be partners for as long as I can foresee, and we’ll always have customers who want to run NVIDIA on AWS. And we will also have a very large chips business ourselves.

Customers always want choice. It’s always been true, and always will be true.”

Microsoft CEO Satya Nadella:

“Our Maia 200 AI accelerator, which offers over 30% improved tokens per dollar compared to the latest silicon in our fleet, is now live in our Iowa and Arizona data centers.

Our Cobalt server CPU is deployed in nearly half of our DC regions running workloads at scale for customers like Databricks, Siemens, and Snowflake. As our largest customers scale their AI deployments, they’re increasingly leveraging other services across our platform and choosing to run those workloads on Cobalt, and we’re expanding Cobalt supply significantly to meet this demand.”

Google CEO Sundar Pichai:

“We are unique in the market because of our vertically optimized AI stack and the way we co-develop the components from our infrastructure and models to platforms and the tools to applications and agents. And the fact that we own frontier models, own the silicon, you know, really helps us stay ahead of the curve.”

Meta CEO Mark Zuckerberg:

“We are very focused on increasing the efficiency of our investments. And as part of that, we are rolling out more than 1 gigawatt of our own custom silicon that we’re developing with Broadcom, as well as significant amount of AMD chips to complement the new NVIDIA systems that we’re rolling out as well. One of the primary goals of our Meta compute initiative is to lead the industry in efficiency of building compute. And we expect that will be a strategic advantage over time.”

...and nodding to the idea that escalating capex numbers are indeed a function of higher memory chip prices, rather than a more aggressive accumulation of GPUs.

Zuckerberg:

“On that note, we are increasing our infrastructure CapEx forecast for this year. Most of that is due to higher component costs, particularly memory pricing.”

Jassy:

“So, on memory and storage and the supply chain, I think everybody knows that the cost of these components, particularly memory, has skyrocketed. And we’re just in a stage where there’s just not enough capacity for the amount of demand.”

Of course, this is 20/20 hindsight: Nvidia — like every chip company — has been on an absolute heater since the market bottomed in late March. And to be clear, the chip designer’s sharply rising sales estimates strongly imply that hyperscalers’ hardware offerings are meant to augment, rather than replace, demand for the most valuable company’s products.

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Sage D. Young

MARA surges on $1.5 billion acquisition of Long Ridge Energy, adding 1 gigawatt of potential power capacity

Bitcoin miners are continuing to position themselves beyond digital assets.

On Thursday, MARA Holdings, longtime bitcoin miner turned compute infrastructure firm, announced it will acquire Long Ridge Energy & Power LLC from FTAI Infrastructure for $1.5 billion, including the assumption of at least $785 million of debt.

The move, which aims to add more than 1 gigawatt of total potential power capacity, helps the firm capitalize on the AI boom. Shares of MARA Holdings jumped 9% on the news, with FTAI Infrastructure shares surging as well.

The acquisition includes a 505-megawatt combined-cycle gas plant in Hannibal, Ohio, and over 1,600 contiguous acres of land to support the build-out of an AI campus.

MARA’s newly acquired Hannibal data center “has already received inbound interest from multiple potential investment-grade AI/Critical IT tenants,” according to a Thursday press release. The firm expects construction to begin in the first half of next year.

“Power is the scarce input in AI,” Fred Thiel, MARA’s chairman and CEO, said. “With the planned addition of Long Ridge Energy, we are gaining control of a highly efficient, contracted energy platform that has a rare combination of large-scale power, land, water access, fuel supply and grid interconnection in a single location — assets that are increasingly difficult to replicate in today’s market.”

markets
Luke Kawa

Caterpillar spikes as AI boom fuels demand for engines and turbines

Caterpillar is soaring in early trading after reporting Q1 results that crushed estimates.

The industrial bellwether reported revenues of $17.42 billion (compared to analyst estimates for $16.24 billion) with adjusted earnings per share of $5.54 (estimate: $4.63).

Behind every chatbot trying to figure out how many R’s are in strawberry is a data center in need of energy, and Caterpillar’s power generation business has been on a tear thanks to this demand.

“A record backlog provides a strong foundation for continued positive momentum,” Chairman and CEO Joe Creed said in the press release.

The industrial giant, like GE Vernova, is among the so-called “heavy assets, low obsolescence” companies that have been cashing in on the AI boom, rather than being disrupted by it.

The firm’s earnings report noted that in its power generation business, “sales increased in large reciprocating engines and in turbines and turbine-related services, primarily data center applications.”

markets
Helena Cheng

Equinix drops after Q1 results disappoint and boost to full-year sales guidance falls short of expectations

Equinix is falling in early trading after reporting underwhelming Q1 results.

Revenue of $2.44 billion and adjusted EBITDA of $1.25 billion came in modestly below expectations, and the data center REIT’s full-year guidance wasn’t as sunny as analysts had anticipated.

Management cited strong demand from AI and cloud workloads, record bookings, and a growing backlog in raising its full-year outlook for sales to between $10.14 billion and $10.24 billion. However, the midpoint of that range still falls a little short of Wall Street’s $10.22 billion estimate.

The data center REIT had surged about 42% year to date going into earnings, making it the top performer in the S&P 500 REIT industry group. After outperforming peers by more than 30% in 2026, it seems investors had little appetite to forgive any missteps.

markets
Rani Molla

Hertz surges after announcing autonomous fleet partnership with Uber

Hertz is up over 15% in premarket trading Thursday on news that its affiliated operating company, Oro Mobility, is partnering with Uber to manage autonomous vehicle fleets. That means Oro will support Uber’s autonomous Lucid robotaxis with “charging, maintenance, repairs, cleaning, and depot staffing” in the San Francisco Bay Area later this year.

The deal also expands into driver-led fleet operations, with Oro operating vehicles — and in some cases employing drivers — on Uber’s platform, a shift toward more centralized, fleet-based ride-share models.

Uber, which exited developing its own robotaxi technology in 2020, has recently positioned itself at the center of the robotaxi push through partnerships.

Hertz and Uber Partner to Power Autonomous Robotaxi and Driver-Led Fleet Operations

The deal also expands into driver-led fleet operations, with Oro operating vehicles — and in some cases employing drivers — on Uber’s platform, a shift toward more centralized, fleet-based ride-share models.

Uber, which exited developing its own robotaxi technology in 2020, has recently positioned itself at the center of the robotaxi push through partnerships.

markets
Helena Cheng

Blue Owl surges as management highlights 10x gain on SpaceX investment while “working down” software exposure

Blue Owl Capital shares are surging over 13% after the company reported Q1 results that signal its broader business is resilient in the face of some stress in private credit markets.

The key numbers:

  • Assets under management of $314.9 billion (estimate: $315.4 billion).

  • Fee-related earnings of $393.6 million (estimate: $383.5 million).

The firm signaled a shift in positioning, saying it is “working down” its exposure to software, a sector that has come under increasing scrutiny as investors reassess the impact of artificial intelligence on earnings durability and loan performance.

Executives also highlighted a roughly 10x return on an investment in SpaceX, where about half the position was sold, as an example of how upside from parts of its portfolio that investors haven’t paid much attention to can make up for some private credit gloom — and a justification for its overall investment approach.

On the conference call, co-CEO Marc Lipschultz said:

“Those are the ways we, even when we do have, and we will have some credit losses, how we can offset some of those losses. But the other thing I would just note on that is about our ecosystem. The reason we have that position is because we were one of the very earliest lenders to SpaceX And we made loans, we made a loan to the company and had the privilege of getting to know them very well, and then participating in ongoing conversations about other financing opportunities, and ultimately in this case, an equity investment.”

Ahead of earnings, analysts flagged expectations for a softer quarter driven by weaker fundraising and elevated redemptions, particularly in Blue Owl’s retail-focused private credit vehicles. Those funds have been a key growth engine but also a pressure point as investors seek exit liquidity that the asset manager has been unwilling to provide in full. Based on the reaction, much of that concern may have already been in the price.

Shares of the stock had slumped more than 40% year to date, with Blue Owl emerging as a proxy for broader concerns across the $1.8 trillion private credit market. Redemption requests have surged in recent months, at one point exceeding 40% in one fund and more than 20% in another, forcing the firm to gate withdrawals and sell assets to return capital.

On the latest call, management struck a confident tone, describing recent redemption activity as “more investor-led than advisor-led” while pointing to “continued strong support” from partners.

"We believe has been a headline driven, not fundamental driven redemption environment,” said Lipschultz.

Earlier this week, publicly traded private credit fund Ares Capital Corp marked down the value of loans to three software businesses by up to $0.18 in its Q1 report, which helped push net unrealized losses up to $357 million.

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