Markets
markets
David Crowther

Nvidia’s blowout earnings and guidance are lifting the entire AI supply chain

You might expect a company that recently reached a $5 trillion market cap (the first in history to do so) to be a relatively mature enterprise; slowing down, with a fat cash cow at its core, multiple divisions pulling in billions of dollars, and a few exciting nascent bets on the future. You probably wouldn’t expect them to post a reacceleration in revenue growth.

But that’s exactly what Nvidia posted across its Q3 earnings yesterday, with its reported $51.22 billion in data center revenue giving a huge lift to risk sentiment.

With revenue and adjusted earnings per share beating by ~3%, and guidance that was even rosier, Jensen Huang and co. have given a shot in the arm to America’s entire AI complex. Aside from Nvidia itself, here are a few of the winners this morning:

  • Companies directly in the semiconductor supply chain are catching a bid, with giants like Broadcom and AMD making the most notable moves in early trading, up 2.8% and 4.4%, respectively, as of 5 a.m. ET.

  • Upstart data center players are making even bigger gains, with IREN and Cipher Digital up between 8% and 10%.

  • Palantir is up 3.4%, aided by a mention from Nvidia’s CFO, who said that the company was “supercharging the incredibly popular Ontology platform with NVIDIA CUDA-X libraries and AI models for the first time,” having previously run the software on CPUs.

  • The neoclouds are also soaring: CoreWeave is up more than 9%, as its business model is tightly wound with Nvidia’s own. Future demand to rent the ~250,000 Nvidia GPUs that CoreWeave owns feels more assured than ever. Nebius, which offers a full-stack solution for this “surge demand” for AI compute, is gaining as well, up about 7%.

  • A number of stocks in the “powering the AI boom” theme are also springboarding from the chip designer’s results. Behind-the-meter energy play Bloom Energy is up more than 5%, while nuclear-geared stocks such as Constellation Energy, Oklo, and NuScale have all caught a bid in premarket trading — with gains of 2.7%, 4.4%, and 7%, respectively, as of 4:40 a.m. ET.

  • In the AI server space, Super Micro Computer is the standout, up nearly 6%. Data storage names like Western Digital and Seagate Technology Holdings are also trading modestly higher, paring some of their initial rise to be 2.5% and 3.4% higher, respectively, at the time of writing.

  • Other speculative stocks and risk assets have also turned green since the results. Bitcoin reclaimed the $92,000 milestone and quantum stocks were up modestly, while equity markets in Europe and Asia traded higher and S&P 500 futures climbed 1%.

On the earnings call, Huang said that “AI is going everywhere, doing everything, all at once” — that is certainly the case in premarket trading.

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markets
Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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