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Nvidia’s slump continues even after Jensen Huang softens his statement that “China is going to win the AI race”

Different words, same message.

Nvidia ended Wednesday’s session with a late-day drubbing, which was followed by an article from the Financial Times in which CEO Jensen Huang said, “China is going to win the AI race” because its regulatory environment and ability to access power is more supportive of the industry’s growth.

Nvidia’s official newsroom account on X put out a softened, more sanitized statement attributed to Huang on this topic hours later on Wednesday evening:

“As I have long said, China is nanoseconds behind America in AI. It’s vital that America wins by racing ahead and winning developers worldwide.”

To translate: the AI race between the US and China is tight, and it’s vital that America wins by winning.

The unwritten subtext is still the same: “China is going to win the AI race” — without having access to Nvidia’s flagship GPUs, or even wanting its nerfed chips!

Shares of the chip designer are down 1.7% as of 10:36 a.m ET.

It’s interesting thinking through who Huang’s audience for both sets of remarks is. The initial statement is likely aimed at the Trump administration in a bid to reinforce the urgency of the power demands of the AI boom.

The administration appears to have already been moving in this direction, with US Energy Secretary Christopher Wright reportedly looking to speed the approval process for data centers to connect to the power grid.

Microsoft CEO Satya Nadella recently said his biggest problem today is “not a supply issue of chips; it’s actually the fact that I don’t have warm shelves to plug into.”

The second statement is likely aimed at quelling alarm from anyone worried too much about the first statement!

Two things can be true, I suppose: China may be poised to race ahead of the US in AI, as Huang warned, and Nvidia’s business in China getting turfed has not stopped the chip designer from being the biggest AI-linked stock market winner. Last week, Nvidia noted that it’s received more than $500 billion in orders for its Blackwell and Rubin chips through 2026.

After the Trump administration banned the sale of Nvidia’s H20 chips to China, Jensen Huang spent a lot of time trying to convince President Trump of the importance of companies around the world (China included!) operating on his company’s CUDA software platform. Those efforts bore fruit, as export restrictions were lifted. But in the process of trying to win over hearts and minds, Huang may have also convinced Chinese President Xi as well, spurring renewed efforts from China to bolster its domestic AI capabilities in both hardware and software and shift away from Nvidia’s offerings.

(As an aside, Wednesday’s late-day slump in Nvidia had all the makings of a “someone knows something” move: though the FT story in question wasn’t published until 4 p.m. ET, shares of the chip designer were soft throughout the last hour of trading, with selling accelerating 10 minutes ahead of the close.)

Duolingo’s stock is plunging and the company is blaming its slower growth on less “unhinged” posting

The company intends to spend more on educational app technology, structure its product so it’s less focused on extracting payments, and pay more attention to boosting social media engagement.

Matt Phillips31m

Luke Kawa1h

e.l.f Beauty plunges as tariff headwinds wreak havoc on Q2 results, full-year outlook

The same day that tariff-exposed stocks soared as traders judged that the Supreme Court was likely to rule against a large portion of President Trump’s tariffs, e.l.f. Beauty showed just how much these changes to cross-border commerce are crushing select businesses.

The beauty retailer reported disappointing Q2 results after the close on Wednesday, with both net sales and adjusted earnings per share well below estimates, and offered full-year guidance that was shy of the Street’s view on both of those metrics as well.

The stock is down roughly 34% in early trading, which would be a record loss if it fails to recover during today’s session.

On the conference call, Chief Financial Officer Mandy Fields laid out in stark terms just how onerous the operating environment is for the retailer:

“To set the foundation, about 75% of our global production today comes from China. Between April 9 and May 13, we were subject to tariffs at the 170% level. From May 14 through the end of October, product imports to the U.S. were subject to tariffs at the 55% level. As of November, we are now subject to a lower tariff at the 45% level given the recent reduction announced by the administration.”

Every 10% tariff increases e.l.f.’s cost of goods sold by $17 million on an annualized basis, per the company’s earnings presentation. The company delivered an across-the-board $1 increase in a bid to offset higher costs, but that wasn’t nearly enough to prevent gross margins from sinking by about 165 basis points compared to the same quarter a year ago.

Luke Kawa2h

Krispy Kreme jumps as traders applaud turnaround efforts

Krispy Kreme is leaning on some of America’s biggest retailers in a bid to make sure its doughnuts aren’t the only dough it’s making.

Josh Charlesworth, CEO of the glazed snack seller, told The Wall Street Journal the company is focusing on its distribution partnerships with the likes of Walmart, Target, and Costco — places with heavy foot traffic — as part of an optimization push to boost profitability.

On the company’s Q3 earnings call Thursday morning, management indicated that they’ve outsourced 54% of their US logistics and plan to outsource 100% next year.

Krispy Kreme might be known more for its belt-widening efforts, but it’s the belt-tightening moves that have traders enthusiastic on Thursday. The heavily shorted company is catching a bid as traders warm to these turnaround and cost-cutting efforts amid a mixed bag of Q3 results. Net revenues of $375.3 million were shy of the consensus estimate for $381 million, but the company did manage to book adjusted earnings per share of $0.01, while the Street had anticipated a loss of $0.07 per share.

And, as expected from this sporadic meme stock, call activity is running hot: a little more than half an hour into the session, call volumes of 7,555 have nearly eclipsed the stock’s five-day average of 7,957 for a full session. The three most active contracts are call options that expire this Friday with strike prices of $4, $5, and $4.50.

Vistra misses sales and profit estimates, stock drops

The mainstay of the AI energy trade also posted meh guidance for the rest of the year.

Matt Phillips2h

Max Knoblauch3h

CarMax plunges on weak preliminary sales results and the sudden firing of its CEO

CarMax shares are down more than 11% in premarket trading on Thursday following the sudden termination of its CEO, Bill Nash, who’d served as chief executive for nine years.

The announcement came as CarMax posted preliminary third-quarter results, including an expected comparable-store unit sales decrease of 8% to 12%.

“CarMax is the nation’s largest used car retailer because we have built a business that customers trust,” said CarMax Board Chair Tom Folliard, who has been named the company’s interim CEO. “However, our recent results do not reflect that potential and change is needed.”

Folliard previously served as CarMax’s CEO for 10 years until Nash succeeded him.

The leadership change comes as CarMax rival Carvana closes its unit sales gap quarter by quarter. Despite selling more used vehicles, CarMax’s market cap is less than a tenth of Carvana’s.

CarMax Terminates CEO Nash