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Luke Kawa8/12/25

Nvidia whipsawed by report that China’s internet regulator barred companies from ordering its chips

Plot twist!

Nvidia briefly erased all of its premarket gains of 1% after The Information reported that China’s internet regulator has “ordered local tech companies including ByteDance, Alibaba Group, and Tencent Holdings to suspend their purchases of Nvidia chips, citing data security concerns with the chips, according to three people briefed on the matter.”

Per The Information, this decision was made shortly after reports surfaced that Nvidia would be allowed to sell its H20 chips to China once again.

Chinese demand for these processors had reportedly been white-hot, with Reuters saying that Nvidia quickly reversed plans to sell down just its existing inventory and instead ordered an additional 300,000 chips from TSMC.

I’m so old, I remember when US national security concerns were the reason these chips couldn’t be sent to China. That is, I was born before mid-April 2025, when those export restrictions were put in place.

Nvidia recently reached an agreement with the US government to receive export licenses for the H20 in exchange for providing 15% of revenues generated from their sale to the US government.

The chip designer’s calendar 2025 sales estimates hadn’t been rising too briskly following reports that it regained access to what CEO Jensen Huang called a $50 billion AI data center market, suggesting that analysts had been slow to incorporate any potential top-line boost into their forecasts just yet.

Nvidia took a $4.5 billion impairment charge in its Q1 earnings report related to this loss of its China business, and said that its Q2 revenue forecast would have been $8 billion higher if not for the export curbs.

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US stock futures turn negative, oil flips positive after Iranian media reports explosions on Kharg Island

Stocks returned to negative territory in premarket trading and oil futures jumped after Iranian state-sponsored media said that explosions were heard on Kharg Island.

The Mehr News agency, which reported this at 6:25 a.m ET, did not comment on the source of these explosions.

The SPDR S&P 500 ETF turned from slightly positive to down about 0.5% in the wake of this report.

West Texas Intermediate crude oil futures traded about 1.5% higher to $114 after having previously been roughly flat.

The island handles roughly 90% of Iran’s crude exports. Strikes that reduce Iran’s ability to ship oil would further disrupt energy markets, which have been roiled by the war and limited the movement of tankers through the Strait of Hormuz, a key chokepoint. Initial US attacks on Kharg Island in March were said to have hit military sites rather than energy infrastructure.

President Donald Trump has threatened to escalate attacks on Iran, including targets that can be considered war crimes, if the Strait of Hormuz is not reopened. His current deadline, which has previously been pushed back on multiple occasions, is 8 p.m. ET on Tuesday night.

On Sunday, the president’s Truth Social account posted that “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran.”

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Claire Yubin Oh3h

Universal Music jumps on Pershing Square’s $64 billion merger proposal

Universal Music Group ADRs rose 11% in premarket trading on Tuesday after Bill Ackman’s Pershing Square Capital offered a deal to combine the world's largest music company with Pershing Square SPARC Holdings, with the resulting new company listed on the New York Stock Exchange.

The proposed transaction purportedly values UMG at a 78% premium to its last closing price, with shareholders receiving €5.05 per share in cash, plus 0.77 shares of the new company for each share of Universal Music held, per Pershing Square’s statement released on Tuesday. Together, the offer estimates UMG to be worth €30.40 per share, or €50 billion ($64 billion) as a whole.

Proposing a corporate shakeup for the record label, Ackman said, “UMG's stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.” According to Pershing Square, those issues include an underutilization of UMG’s balance sheet, uncertainty over what the Bolloré group will do with their 18% stake in the company, and a delay in the US-listing of the business. UMG’s shares have slumped more than 30% in the last six months before this morning’s jump.

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Broadcom jumps after locking down Google as a customer for future generations of TPUs

Shares of Broadcom rose more than 3% in postmarket trading on Monday after its most important customer doubled down on the custom chip specialist’s ability to produce its most valuable commodity.

In a filing, Broadcom said that it entered into a long-term agreement with Google to supply future generations of TPUs (custom AI accelerator chips) as well as a supply assurance agreement for networking and other equipment “through up to 2031.”

Bernstein analyst Stacy Rasgon indicated that Broadcom’s investor relations team told him that Google’s long-term agreement “has revenue commitments that go along with it through the timeline.”

Gemini 3 launched to rave reviews in November. The model was trained on TPUs co-developed by Broadcom and Google.

The same Monday filing showed that Broadcom, Google, and Anthropic expanded a partnership that will see the Claude developer access 3.5 gigawatts of AI compute capacity beginning in 2027, powered by the TPUs co-designed by the custom chip specialist and the search giant.

Bernstein’s Rasgon added that Broadcom’s team suggested these 3.5 gigawatts are “only part of a larger partnership over time.” He thinks Broadcom’s fiscal year 2027 guidance for AI revenues of $100 billion “is looking increasingly light” thanks to this news.

For what it’s worth, the enhanced pact with Anthropic hinges upon the firm’s ability to afford AI compute. But based on the insane trajectory of its run-rate revenue that may not be a big hurdle to clear.

“Broadcom’s expanded agreements with Google and Anthropic add rare multi-year visibility, reinforcing a $40-$50 billion AI revenue opportunity tied to Anthropic’s 3.5 gigawatt deployment starting in 2027, while building on the previously disclosed 1GW ($10 billion) starting in 2H,” wrote Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada.

Anthropic boasts revenue run rate of $30 billion as the Claude developer expands its partnership with Google and Broadcom

Anthropic’s revenue run rate is higher than the trailing 12-month revenues of all but 129 S&P 500 companies.

Anthropic Co-founder and CEO Dario Amodei

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Health insurers surge after Medicare agrees to pay 2.48% more in 2027, a bigger-than-expected boost

Health insurance stocks are surging after the Centers for Medicare & Medicaid Services said it plans to boost Medicare Advantage and Part D payments by 2.48% in calendar year 2027.

The likes of CVS, Humana, UnitedHealth, Molina Healthcare, Oscar Health, and Elevance Health are gaining in postmarket trading.

Wall Street analysts had anticipated that rates for 2027 would go up between roughly 1% and 1.5%.

These stocks had gotten crushed in late January when the Trump administration proposed relatively flat federal payment rates.

Insurance companies that provide government-sponsored plans, like Medicare Advantage, faced headwinds from higher-than-expected costs in 2025.

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