Markets
markets
Claire Yubin Oh

Nvidia falls after Chinese regulator said it violated the country’s antitrust laws in 2020 deal

Nvidia dropped as much as 2.9% in early trading on Monday after China’s State Administration for Market Regulation ruled that the chipmaker violated the country’s antitrust laws after acquiring Mellanox Technologies, an Israeli American network solutions supplier.

In 2020, Beijing approved Nvidia’s ~$7 billion acquisition under the condition that the chipmaker would not discriminate against Chinese companies. Since then, Nvidia has had to redesign its chips to comply with the US government regulations that temporarily banned the company from selling its advanced chips, including the H100, in China.

Monday’s preliminary finding from the SAMR comes amid ongoing trade talks between US and Chinese officials in Madrid, with the tariff truce between the world’s two largest economies set to expire in November.

As Sherwood News’ Luke Kawa wrote in August, China has appeared determined to “wean itself off of any dependence on Nvidia and US technology to develop its AI capabilities.”

According to Reuters, under Chinese antitrust law, companies can “face fines of between 1% and 10% of their annual sales from the previous year.” Nvidia’s sales in China generated $17.1 billion of revenue in its most recent fiscal year. Assuming the maximum penalty, the impact would be ~$1.7 billion, less than 1% of Wall Street’s forecast for Nvidia’s total revenue this fiscal year.

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S&P 500 posts weekly gain for its 8th consecutive week

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Paige Oamek

Hardware stocks jump thanks to server demand and record Lenovo revenue

Server stocks are rallying as Dell, Super Micro Computer, and Hewlett Packard Enterprise ride the momentum of Hong Kong-based Lenovo. The PC maker’s stock rose 19% on Friday, hitting an all-time high, on record Q4 earnings.

Powering the positive earnings report was the company’s AI-related revenue, which grew 84% in the fourth quarter and now makes up over a third of total revenue. Investors seem to think the increased demand for servers could have trickle-down effects for other companies.

“The company’s results and commentary reinforced the outlook for strong AI-infrastructure demand while indicating resilient broader traditional server and storage spending,” wrote Woo Jin Ho, a senior technology analyst at Bloomberg Intelligence. “Lenovo’s $21 billion AI-server pipeline and remarks that demand is outpacing supply support Dell’s AI-demand momentum and point to robust orders.”

AI’s insatiable computing demand is reshaping the hardware industry and driving up server demand.

Dell will report first-quarter earnings on Thursday, May 28.

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Take-Two’s “GTA 6” forecast feels absurdly conservative

Take-Two issued a 2027 net bookings forecast about $1 billion below Wall Street’s estimates. The stock is falling on Friday.

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markets
Helena Cheng

Ross Stores surges as Q1 results beat expectations, full-year guidance raised

Ross shares are rising after the company delivered strong Q1 results, with sales topping Wall Street’s projections.

The stock soared 6.3% just after the open.

Key numbers:

  • Earnings per share of $2.02 vs. $1.47 year over year (estimate: $1.72).

  • Sales of $6.01 billion, up 21% year over year (estimate: $5.61 billion).

  • Comparable sales growth of 17% (estimate: 8.58%).

CEO Jim Conroy attributed the results to better traffic in stores. “Customer traffic was the primary driver of the strong sales trend as compelling merchandise assortments, higher customer acquisition and engagement from our ongoing marketing initiatives, and an improved in‑store experience are resonating with shoppers.”

The company also noted that transaction volume grew across all key demographics, including “income levels, ethnicities, and age groups, including younger customers.” Sales were also likely buoyed by standard seasonal tailwinds, including consumer spending from tax refunds.

Backed by the strong quarter, the company lifted its full-year targets. Ross now projects same-store sales growth of 6% to 7%, up from the prior forecast of 3% to 4%, topping Wall Street’s estimate of 4.64%. It boosted its annual EPS guidance to a range of $7.50 to $7.74, versus the prior outlook of $7.02 to $7.36.

Ross Stores has been one of the retail sector’s standout performers this year, rising around 20% year to date as of Thursday’s close.

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