WSJ What’s News - Nvidia’s Outlook Comes Under the Microscope

Episode Date: August 28, 2025

A.M. Edition for Aug 28. Nvidia posts another record quarter, but Journal Heard on the Street columnist Dan Gallagher says its $4 trillion-plus valuation sets an awfully high bar that even strong numbers don’t always meet. Plus, The White House says it has fired the director of the Centers for Disease Control, following clashes with Robert F. Kennedy Jr. over the agency’s guidance on vaccines. And WSJ economics reporter Justin Lahart unpacks new research that shows AI’s effect on job prospects for young Americans. Azhar Sukri hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

One, and sip, and two, and sip, and three, and sip. Oh, hey, I'm just sipping Tim's all-new protein ice latte. Starting at 17 grams per medium latte, Tim's new protein lattes, protein without all the work, at participating restaurants in Canada. Envidia sales hit record highs, but its growth potential comes under scrutiny. Plus, more firings in Washington, including the freshly confirmed head of the C-Earthier. CDC, and is AI ruining job prospects for young Americans. Steve Jobs famously described the computer as a bicycle for the mind.

His idea was that the computer could make people more efficient at what they do just as a bicycle can. To a degree that's been lost with AI, a lot of AI is being developed as a replacement technology. It's Thursday, August the 28th. I'm Azhar Sukri for the Wall Street Journal. Well, here is the AM edition of What's News, the top headlines and business stories moving your world today. We begin today with a closer look at Nvidia's earnings, also known as Wall Street's Super Bowl. The chipmaker posted yet another set of record figures yesterday, even with sales of its AI chips to China effectively shut off. But its outlook for the third quarter was seen as lackluster, sparking worry that growth in demand. for AI chips could be hitting a plateau.

Journal heard on the street columnist Dan Gallagher told us that when you're the only public company with a market value north of $4 trillion, the potential to disappoint investors is high. Expectations are really, really high for Nvidia. This is a stock that's up 35% in just the last three months when there's been a lot of selling pressure on a lot of other tech companies. And the company's data center revenues, which are the main part of its business that are selling AI chips to these big tech companies. That was about 1% short of analyst estimates for the quarter. And that did send the stock down after hours following the report. Dan says China is another

source of uncertainty for Nvidia, which has been caught in the crosshairs of the Trump administration's tech rivalry with Beijing. Invidia's business in China remains a complicated picture. The company scored what looked like a big victory last month when the Trump administration said it could sell these age 20 chips into China. But it disclosed on its earnings report that it has not yet started shipping those chips, and it's still waiting for some more clarity on the geopolitical situation. As a result, Nvidia did not include any real China sales in its forecast for the current quarter, and so that leaves the status of that business still a bit unclear. The White House says it's fired the director of the center.

For Disease Control and Prevention and several top CDC officials have resigned throwing the agency's leadership into turmoil. Susan Monares held the top job at the CDC for less than a month. According to a senior Trump administration official, she clashed with Health and Human Services Secretary Robert F. Kennedy and members of his staff, with a major source of disagreement being the CDC's guidance on vaccines.

Lawyers for Monares said that she was notified of her, firing by a White House staffer and that they reject the notification because only the president himself can fire her. And we're exclusively reporting that President Trump has fired Robert Primus, a board member of the railroad regulator

that's weighing the proposed mega merger between Union Pacific and Norfolk Southern. Primus, a Democrat, was the only member of the board to oppose the tie-up of rail companies Canadian Pacific and Kansas City Southern a few years ago. He said yesterday that he planned to challenge his termination. The White House didn't immediately respond to a request for comment. President Trump chaired a meeting at the White

House yesterday aimed at breaking the impasse in negotiations between Israel and Hamas, as well as mapping out a post-war plan for Gaza. The meeting included top national security aids and senior Israeli officials, though there was no representation from the Palestinian side. Journal reporter Annat Pallid has more. We understand from Israel's perspective they want to come up with a post-war plan before the UN General Assembly in September because that's when several countries, including France and Canada, plan to recognize a Palestinian state, something that Israel opposes,

and it claims is a reward for Hamas. As for the talks right now, we're sort of at an impasse. Earlier this month, Hamas said it agreed to a temporary 60-day ceasefire agreement, but Israel hasn't responded yet. That agreement was supposed to entail a 60-day ceasefire where Hamas would hand over 10 living Israeli hostages, some deceased hostages, and Israel would hand over Palestinian prisoners in Israeli prisons.

They were supposed to enter talks on the first day of the agreement for a lasting ceasefire. But Israel hasn't responded and has now said it wants some sort of comprehensive deal. The discussions on Gaza's future after the war come amid plans to expand the fighting. The Israeli military is calling up about 60,000 reservists for September when an operation to take over Gaza City is expected to begin if there isn't a ceasefire deal. Coming up, we'll look at the growing evidence of how AI is wrecking the job prospects of young Americans

and possible silver linings. That's after the break. With MX Platinum, access to exclusive MX pre-sale tickets, can score you a spot track side. So being a fan for life turns into the trip of a lifetime. That's the powerful backing of Amex. Pre-sale tickets for future events subject to availability and vary by race. Terms and conditions apply. Learn more at amex.ca.com slash Y Annex. Now we've been highlighting the major shifts that artificial intelligence is creating in the job market for some time now. But new research shows just how

limiting it is for some young Americans. A paper released this week by three Stanford University economists shows that young workers are getting hit in fields where generative AI tools such as chat GPT can most easily automate tasks done by humans. And as economics reporter Justin Layhart explains, its findings raise profound questions about the future of entry-level work. Justin explained to in a little bit more detail the findings of this Stanford study and why it's pretty unique. We've heard lots of anecdotal evidence that AI is displacing jobs, but the data hasn't really been there. And what these economists did is they used data from ADP, which processes lots and lots and lots of paychecks in the U.S. And they were able to get a very, very granular look at what's

going on. And what they did was they looked at the occupations that have been identified as the places where generative AI could automate the most tasks. If you think about sort of customer service is one area, another one is software development. And when they looked at these fields, they saw that young people's employment has really, really been weakening since 2022 when ChatGPT was rolled out. But it's not all bad news, am I right? No, it isn't. I'm not. I'm not. I'm The first thing that they notice is that young workers are really affected. So, for example, amongst the youngest cohort of software developers, employment, the head count among them, has fallen by nearly 20 percent since the end of 2022.

On the other hand, older developers, employment has continued to grow. What this suggests is that people who are more seasoned have maybe learned things on the job, I guess what they call tacit knowledge, right? things that you can't automate. And those skills are very, very valuable, still to employers. But that also creates something of a paradox because how do you become a senior software developer if you can't become an entry-level software developer? Yeah, there is this issue that's been raised that. What companies might have to do is more thoughtfully train young workers in doing these things. It's kind of like how we use calculators, right? We do not give

calculators to young children who are learning math, right? We make them learn how to do math with pencil and paper. And then once they learn the math, then we give them the calculator. It's the same sort of thing, right? You need to learn these soft skills and be able to employ them and really going to have to sort of think about, you know, how we train people. What fields then could AI create more employment opportunities in according to this paper? When people think about AI or really any new technology and how it affects the labor market, it can do one of two things, right? It can automate tasks. It can just, you know, replace the things that people are doing. Or it can augment tasks. It can make people better at their job.

What the hope is, is that more AI will be sort of channeled into these augmentative tasks, if you will. And in that case, employment can grow. And in fact, what the economists found was in areas where people have sort of identified as being more augmentative nursing would be one, that there has been an improvement in employment for younger people. That makes sense, right? If suddenly a kind of worker is able to do more, is being more efficient and productive, you as a manager will want to hire more of those people. So that is the hope with AI.

Justin Layhart, thank you very much for your insights. Thank you. And that's it for what's news for this Thursday morning. Today's show was produced by Kate Bullivant and Daniel Bark. Our supervising producer was Christina Roker. I'm Azhar Sukhri for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

Thank you.