| Here’s your daily business briefing. - ๐ Nvidia shares hit $1,000 amid AI sales boom
- ๐ Deep Dive: Conflict spurs military spending
- ๐ผ PwC: AI skills could boost pay by 25%
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Following the release of its fiscal first-quarter results report, Nvidia shares rose beyond $1,000 for the first time ($NVDA) in extended trade. The adjusted earnings per share for the quarter came in at $6.12 against an expected $5.59, and the revenue came in at $26.04B over an estimated $24.65B, above expert expectations. More: - Nvidia's strong results signal robust AI chip demand, with CEO Jensen Huang expecting significant revenue from the next-gen AI chip, Blackwell, by Q4.
- Nvidia forecasts $28B in sales for the current quarter, surpassing Wall Street's expected $26.61B and $5.95 earnings per share.
- In the quarter ending April 28, net income reached $14.88B, translating to $5.98 per share, compared to $2.04B, or $0.82 per share, in the same period last year.
- Nvidia's data center sales, its primary revenue stream, soared by 427% YoY to $22.6B, propelled by robust shipments of its Hopper graphics processors.
- Nvidia's overall performance was bolstered by various segments, including an 18% increase in gaming revenue to $2.65B, professional visualization sales totaling $427M, and automotive sales reaching $329M.
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What the numbers say: Global military spending hit a record $2.4T in 2023, a 7% increase from the previous year, with the U.S. accounting for 37% of the total at $916B. Significant increases were seen in Russia (24%), Ukraine (51%), and European nations (16%), while China's spending rose 6% to $296B, and Middle Eastern defense budgets grew 9% to $200B. Relevance: Global military spending surged due to heightened geopolitical tensions, especially in Europe, Asia, and the Middle East, driven by conflicts like Russia's war in Ukraine. China's growing military power has also increased defense budgets among its neighbors, focusing on military strength in an unstable geopolitical landscape. More data: Global defense spending was 2.3% of economic output in 2023, with a $60B U.S. aid package for Ukraine. Sipri data shows Middle Eastern defense spending had its highest growth in a decade, while Latin American countries like the Dominican Republic increased spending due to criminal gang threats. | | | |
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| 3 | | According to PwC's research, jobs necessitating AI skills offer a notable wage premium, with a 25% increase in the U.S. compared to non-AI roles. Analyzing over 500 million job ads across 15 countries in North America, Europe, and Asia, PwC found that the wage premium for AI-related positions is 14% in the U.K. and 11% in Canada. More: - Certain professions, such as U.S. lawyers with AI skills, can command a 49% wage premium, while financial analysts can earn a 33% premium.
- From 2012 to 2023, the demand for AI skills in jobs surged 3.5 times faster than the overall job market in the surveyed nations.
- Skills demanded by employers in AI-exposed jobs are evolving 25% more rapidly than those in non-AI-exposed roles.
- Labor productivity in AI-intensive industries is increasing 4.8 times faster than in other sectors, improving overall productivity.
- AI-powered productivity gains are essential for driving real wage growth and sustaining economic expansion, especially in aging populations such as the U.K.
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| 4 | | Warner Bros. Discovery ($WBD) secures a 5-year sublicense deal with ESPN to air first-round and quarterfinal College Football Playoff (CFP) matchups. TNT, a Warner Bros. Discovery subsidiary, will broadcast two first-round games in 2025 and 2026, with an additional two quarterfinal games from 2026 onwards. More: - Disney retains exclusive rights to the CFP championship game until 2031, paying about $1.3B annually.
- The new 12-team CFP format debuts in December, with ESPN producing games branded as TNT broadcasts.
- TNT intends to improve its live sports offerings by adding the CFP games to its Max sports tier.
- The ESPN deal comes as TNT risks losing NBA games to NBCUniversal and Amazon, impacting its sports programming lineup.
- The sublicensing agreement keeps all CFP games on Venu Sports, a new streaming service by Disney, Fox, and Warner Bros. Discovery that will launch in the fall.
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| 5 | | E.l.f. Beauty ($ELF) reached a significant milestone, achieving its first $1B fiscal year with a 77% sales increase, its shares dropped initially post-report but later surged (20%) on hints of conservative guidance. In the fourth fiscal quarter, E.l.f. surpassed Wall Street expectations, reporting adjusted earnings per share of $0.53 (expected $0.32) and revenue of $321.1M (anticipated $292.6M). More: - Net income for the quarter ending March 31 was $14.53M, or $0.25 per share, down from $16.25M, or $0.29 per share, a year ago.
- E.l.f. expects next year's net sales to be $1.23 to $1.25B, reflecting 20-22% growth, below analysts' 27.4% growth expectation of $1.27B.
- The company forecasts adjusted net income of $187-$191M and earnings per share of $3.20-$3.25, below the expected $3.51.
- Ulta Beauty CEO Dave Kimbell warned of a slowdown in the beauty category, which could impact stocks like E.l.f., Estรฉe Lauder, and Coty.
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| 6 | | DuPont de Nemours ($DD), an American chemical giant with a history spanning 220 years, intends to divide into three separate publicly traded entities. The restructuring will involve the tax-free separation of its electronics and water segments, leaving a rebranded DuPont to function as a diversified industrial firm. More: - On June 1st, Ed Breen, the present CEO, will assume the role of executive chairman, while Lori Koch will become the CEO.
- Large multinational corporations increasingly opt to break into smaller entities to capitalize on their agility and flexibility.
- Pending board approval, DuPont's breakup transactions, slated to conclude within 18 to 24 months, lifted its shares by 1.5% in Thursday morning trading.
- This is DuPont's second breakup in recent years, following the 2019 division of DowDuPont into three entities: DuPont, Dow Chemical, and Corteva.
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- In April, sales of newly built homes fell as prices and mortgage rates rose, with the median price reaching $433,500, up 4% from a year earlier, and the average 30-year fixed mortgage rate jumping from the high 6% range in March to 7.5% in April.
- Mondelez, known for Oreo and Cadbury Dairy Milk, received a $366M fine for manipulating intra-EU trade of chocolate, cookies, and coffee to maintain elevated prices.
- In the largest blank-check deal of the year, Admiral Acquisition Ltd., led by serial dealmaker Martin Franklin, has agreed to acquire industrial-services provider ASP Acuren Holdings Inc. for $1.85B.
- U.K. regulators fined Citigroup a total of $79M on Wednesday for deficiencies in its trading systems, which nearly led to the dumping of stocks valued at $189B onto European markets.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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