It was calm on the surface, with intriguing moves beneath, as buyers emerged for tech (XLK) names yesterday, especially software (IGV), despite harsh reactions to Intuit Inc (INTU) and Zoom Communications (ZM) results, and Salesforce (CRM) and others in the batter’s box. The biggest name in the batter’s box was Nvidia (NVDA), and several artificial intelligence (AI) darlings that rallied into the closing bell.

NVDA Hits a Grand Slam

Growing up in the 1970s, my favorite baseball player was Reggie Jackson, who earned the moniker of “Mr. October” for his World Series performances, including three home runs off three pitches in 1977.

He was not a bashful man, but when he stated that he was the “straw that stirs the drink,” it was true.

Majestic

I loved Jackson's swing, which usually resulted in a home run or strikeout. The former was majestic, which is the only way to describe Nvidia's results for the quarter. The company has beaten the Street in earnings for sixteen straight quarters, so that wouldn’t have been celebrated. In fact, the stock edged slightly lower when the numbers were posted.

It's only getting better.

Jensen Huang noted that demand is accelerating, as AI has reached an inflection point. Jensen also noted strong momentum across the United States and around the world. Lots of politicians are playing with economic and national security fire, trying to block the rollout of data centers. The company is positioned to dominate with the rollout of the Vera Rubin platform and its embedded Compute Unified Device Architecture (CUDA).

Summary

Revenue

Operating Profit

The “Straw”

Nvidia increased its future commitments by $119 billion, as supply and capacity surged to $279 billion, and the total to $366 billion.

Guidance

The straw is impacting neocloud and memory, which Jensen stated:

“We are experiencing extreme pricing conditions in memory. The magnitude of the price increase has exceeded our prior expectations and is headed even higher into next year. The bottlenecks will nip at margins a little, but it's still the stuff of legends.”

Gross margins:

• Q3: 74% ±50 bps
• Q4: 71%-72%
• FY28: 72%-73%

Humble Brag

Jensen is looking for 70% revenue growth in fiscal year 2028 (FY28) (next calendar year); the Street was anticipating 40% growth but noted: “The unconstrained would be a lot higher.”

The bottom line is demand continues to outstrip supply.

Raking in the Cash

Five years ago, a 1-gigawatt AI data center required an investment of $30 billion; now it costs $60 billion.

1GW Platform Revenue

• $18 billion Hopper
• $25 billion Grace Blackwell
• $40 billion Vera Rubin

The Vera Rubin system and CUDA architecture are positioned to dominate and fend off new competition.

Software Posts Strong Results

Reactions to software earnings after the close were amazing:

• Salesforce (CRM) +13%
• Okta Inc (OKTA) +20%
• CrowdStrike Holdings (CRWD) +12%
• Nutanix (NTNX) +12%
• Veeva Systems (VEEV) +7%

Today could be one of those days when everyone joins the party. 

Cheers!

Today’s Session

The AI trade is getting most of the action in early-morning trading as some of the focus starts to shift toward Jackson Hole, where Kevin Warsh will give a much-anticipated speech that illuminates his thoughts and goals for the Federal Reserve and monetary policy.

I have strong thoughts on that and will share them in tomorrow’s commentary.

This morning we learned investor sentiment has become even more bearish, which the experts take as a buy signal. It's fine to be worried about the market, but it's a huge mistake to make moves based on day-to-day feelings.

Everyone should be pumped about the times we are living in and the opportunities.

There are concerns, especially around debt, government policies, free-falling birth rates, and more, but as an investor, this is the moment to seize the day.

Comments

Hey Charles, I love the comparison of Nvidia and Reggie. A fellow baby boomer who watched it all happen also he catapulted the AL in the 1971 All-Star game with that mammoth HR into the light towers. Chuck McGuire on 8/27/2026 10:13:59 AM

let me comment on 2 major markets issues: 1 - a little bit more intel and background on this liquidity move by the U.S. Treasury from Joseph Lavorgna / Chief Economist - SMBC Nikko Securities America (and former Senior Counselor to Treasury Secretary Bessent) who stated that this is likely a "technical operation" by the Treasury and not a months long OT (Operation Twist) strategy going into the next major U.S. Treasury quarterly refunding window in September. The Treasury is offering institutions and insurance companies among others the opportunity to offload less desirable treasury bonds that are now off the run and not at all liquid to sell and then reinvest those sale proceeds into new 20 and 30 year U.S. Treasuries... after hearing his detailed analysis and explanation (and knowing Joe when he worked for years at my legacy firm and his background) this made a lot of sense and would not put the Fed Chair (Kevin Warsh) in a difficult cross purpose position. As such, this in my mind is all about debt management in that the "end goal" here is to manage minimizing costs and maximizing funding of the overall debt. 2 - data center political pushback - why not build these data centers on U.S. government land? there is plenty to go around especially near our military bases here in California and also in Arizona - food for thought! thank you Charles! Thomas44 Thomas Caffery on 8/27/2026 11:40:41 AM

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