WSJ What’s News - ‘Nvidia Crushed Everywhere.’ Can the Party Last?

Episode Date: August 27, 2026

A.M. Edition for Aug. 27. A bullish AI forecast from Nvidia lifts markets. And despite blockbuster growth and revenue forecasts, IG Markets’ Chris Beauchamp says Nvidia still has more room to run. Plus, Fed chairman Kevin Warsh has so far kept his views on interest rates to himself. But investors hope that’s about to change. And, WSJ’s Tripti Lahiri brings us the latest from the devastating floods in Nepal and China. Luke Vargas hosts.  Sign up for the WSJ’s free What’s News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A bullish AI forecast from Nvidia lifts markets. We'll break down what its results mean for the larger AI trade. Plus, Fed chairman Kevin Warsh has so far kept his views on interest rates to himself. Though investors hope that's about to change. He doesn't think it's the Fed's job to walk them through their next move. But I think there's a lot writing on this speech in Jackson Hole because the general consensus was that this sort of of tight-lift, less is more strategy, did not pay off. And we'll get the latest from the devastating floods in Nepal and China.

It's Thursday, August 27th. I'm Luke Vargas for the Wall Street Journal. And here is the AM edition of What's News, the top headlines and business stories moving your world today. Invitya crushed everywhere. That was the sentiment of one tech analyst after the world's most valuable company forecast 70% revenue growth for 2028. and its latest earnings yesterday, far above the 45% growth expected.

Asian chip companies powering the AI buildout are broadly rising today, following Nvidia's results, even as analysts cautioned that the winners and losers of the AI trade could soon be cast into stark relief amid rising component costs and the need to demonstrate real AI revenue. Well, here to put all this into perspective, especially for the many retail investors out there whose fortunes are linked to the AI trade is Chris Beecham, chief market analyst at ID markets. Chris, the enthusiasm around Nvidia's earnings had been equated to the World Cup final. Much of the world is, of course, tuned in in various ways. One of our reporters even went to a bar in New York City where the earnings were being live streamed on TV. Though we should note there are

hangovers after big games as well. Is that what we're seeing this morning? I think there's a generally positive atmosphere. I wouldn't say we were hung over after the results, but enough to be positive on what comes next, which I think makes a change from last couple of times where it's kind of been a bit of sense of a disappointment, really. What we've picked up from these numbers last night is that for a company that seemed to be shifting firmly out of that incredible growth phase, the incredible surge in the share price, sort of Nvidia's greatest days, if you like, we're behind it. From what we're seeing in those numbers last night in the comments and then anything's cool,

it does look like actually there is still room for more growth. And it seems ridiculous to talk about it in that way when the numbers, so you've got the data that they're generating $89 billion. It's still huge numbers. But the story appears to be becoming more exciting in a way that it hasn't done for a while. Where is that greatest excitement as you see it? I think it's the fact that Jensen was highlighting in the call that this isn't just Nvidia and the hyperscale and feeding off each other and building these huge data centers.

It's moving out further into industry and partnerships with other firms that shows that what was previously confined to the Mag 7 is now sort of escaped into the broader economy. You mentioned there maybe AI and the hyperscalers not just feeding each other. I mean, this has been a concern around the sustainability of the AI buildout. Circular financing in particular surrounding Nvidia deals where the company invests in its customers to help them buy its chips. The CFO of Nvidia collect Crest yesterday tried to head off that concern. Independent capital still underwrites every deal.

on its own merits. We're not making loans. In this model, we get paid twice, once on the hardware sale, and again through the share of rental revenue, a highly reoccurring stream layered on top of a one-time equipment purchase. Chris, NVIDIA has had answers before about circular financing concerns. Does that satisfy you? This is just highly recurring revenue streams. Depends on where you sit with NVIDIA, I think it's going to be very hard to convince a lot of people that this isn't circular financing. It's a question that will recur again and again until if you like we finally reach kind of escape velocity and the investments really start to pay off. And it is almost a question of what Nvidia does with all the cash that it generates. And if it can

use that to try and feed demand in the right way and in the right places, then it should help to allay at least some of the concerns that this is some giant circular game where the money just gets passed around. And one of the real areas of concern, right, is it's like, Not that its biggest customers don't have the capital to finance purchases of Nvidia chips. It's the smaller ones. Like how wide is that market if Nvidia takes itself out of the financing equation? Yeah, it is the query that it just has to become self-sustaining. For the moment, it looks like everything is moving the right direction.

Even the debt to equity ratio is very strong and shows that it can sustain at least some mistakes, if you like, in this area. Let's look at how AI demand is being felt across software and hardware, starting with Salesforce on the software's at the beginning of the year, Wall Street was kind of falling out of love with software. Would clients be shifting their spending away from enterprise software and just putting it towards AI? We got results from Salesforce yesterday. The company posting double-digit revenue gains that said that demand for its AI and for its data products was increasing. And it's going to team up with Anthropic and offer this Claude Force product, as it's calling it. All of this had Chief Executive Mark Benioff in a pretty good mood, to say the least,

and kind of dunking on the haters who saw SaaS or. software as a service earlier this year as being dead. As everyone can see, we just had one of the best quarters ever, and we outperformed on all of our key metrics. And as I just went through in all these key metrics and these key areas, this nonsense of this Sassapocalypse, I think it's time for it to stop. Chris is Mark Benioff right about that?

I think so. And markets do this from time to time. They go from rampant optimism to irrepressible fear, if you like, around the software. firms. It went too far. The key was that the software firms like Sales Force had to show that they were not just being obliterated by AI, but taking it, making it their own. And I think if you look at the numbers, the Asian Force AI analyze revenue is up more than 200% over the year. And so it's taking AI and using it and making it to improve their own performance. And yes, it requires job changes and losses and

those are painful, but I think for the moment, these businesses look to be weathering this storm quite well. And looking leaner and meaner as a result of AI. Exactly. And that will please investors. And certainly it seems to be delivering the kind of improvements and the improvements in net income that people want to see. Chris Beecham is the chief market analyst at IG Markets. Chris, thanks so much for being with us on What's News. Thank you for having me. Next on the mind of investors, Fed Chairman Kevin Warsh's take on the U.S. inflation outlook, as central bankers gather in Jackson Hole. Plus, the rest of the day's news after the break.

We are exclusively reporting that a surprise visit to Moscow by CIA director John Ratcliffe this week was to deliver a message to Russia not to attack NATO countries. The trip is Ratcliffe's first publicly known visit to the Russian capital and follows U.S. intelligence assessments that President Vladimir Putin could test NATO with a limited assault on an allied country in the next few years. The journal's Dan Michaels says that while Rackcliffe didn't meet with Putin himself, a Kremlin spokesman confirmed that he was briefed on the talks. The message comes as Russia has been increasing a number of small-scale attacks in Europe,

sometimes called hybrid or gray zone attacks, because they're not quite at the level of outright combat. But, for example, in recent weeks, a explosive drone was found under, a Ukrainian cargo plane at a German airport, and several others were found also. So it seems that Washington is getting a little nervous that Russia may think that it can attack NATO countries in Europe without the U.S. reacting. And all indications are that Ratcliffe was there to say, don't do that. We take Europe seriously and don't think that you can go and bite off a piece of, for example, one of the Baltic countries that border Russia and Russia had occupied as

part of the Soviet Union. A spokeswoman for the CIA declined to comment while President Trump has described the trip as, quote, semi-routine. More than 1,400 people remain missing in Nepal and China following tsunami-like floods there yesterday that were likely triggered by the collapse of a glacier in the Himalayas. Our Southeast Asia Bureau Chief Tripti Lahiri has the latest. It's going to take a long time for rescuers to either find some of these missing or decide that they need to declare them as dead even though bodies won't be found. There is a body that's been recovered 150 miles away from where all of this is happening. This was a busy area. The flood went through this place called Girong Port, which is the mainland crossing hub between Nepal and China. It's become very busy.

Electric cars go through there, tourists go through there in both ways because there are these sites that Hindus and Buddhists tend to go to around this time of year, which is why you'll see that among the missing very large numbers of foreign tourists. And then, of course, there's been development. So there are hydropower projects. There are just more settlements, more commerce. Highways have been built. And all of that, obviously, has brought more people to the area.

And the Fed's annual conference in Jackson Hole, Wyoming, kicks off today with all eyes on Chairman Kevin Warsh, who's due to speak tomorrow. As part of a new policy of communicating less, Warsh has been tight-lipped about his thoughts on the economy, despite high inflation and recent wild trading in bond markets. But his former Fed Governor Frederick Michigan told the WSJ's Take On the Week podcast, Warsh may just have to speak up to keep investors on side. The issue right now is that for a pretty substantial period of time, markets are going to be very skeptical about Kevin. We're already seeing a mini-inflation scare with these long bond rates go up.

This is because people are not sure about Kevin Warsh, just that they were not sure about Alan Greenspan when he first became chair. And of course, Alan Greenspan was extremely successful in getting inflation down and convincing the markets that he was serious about controlling inflation. And this is one of the reason why I think transparency is extremely important because I want the markets to say, you know, it doesn't matter who's the chair of the Fed. The Fed will do a reasonable job. For more on Jackson Hole and what to expect from the new Fed chairman, check out the link. we've left in our show notes. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with

the news show. And until then, thanks for listening.