What We Learned This Week

Expectations Still Too Low: Concerns had arisen in recent days over Nvidia's ability to meet increasingly lofty expectations, prompting some investors to lock in profits, with the selling pressure spilling over into the broader market. However, it appears expectations still weren’t high enough. Total revenue surged by 265% year-over-year, with the data center segment witnessing over 400% growth. Earnings soared by an astonishing 769% compared to the previous year and revenue guidance was $2 billion ahead of consensus. These staggering growth rates were far ahead of expectations and are reminiscent of startup ventures rather than an industry-heavyweight nearing a $2 trillion market cap. Amidst the AI revolution, companies are compelled to invest, driving further growth. Yet, questions linger regarding the technology's true ROI and critical use cases. Nonetheless, the momentum behind AI remains strong, reflecting its indispensable role in modern business strategies.

Walmart Leaning Further into Advertising: Walmart's acquisition of TV maker Vizio, valued at $2.3 billion in an all-cash deal, marks a strategic shift towards bolstering its digital advertising capabilities to compete with industry giants like Amazon. As the largest seller of Vizio TVs globally, Walmart aims to leverage this acquisition to enhance its digital advertising channels by integrating Vizio's hardware and software resources with its extensive shopper purchasing data. With over 18 million registered users on Vizio's SmartCast TV operating system, Walmart seeks to optimize the advertiser and user experience, further diversifying its revenue streams beyond physical goods sales. This move aligns with the growing trend of global advertising and memberships, which are projected to contribute nearly 20% of Walmart's revenue this year. Given the success of similar strategies by Amazon, it raises speculation about potential moves by other retail giants like Costco in the future.

AI Changing the Creative Landscape: OpenAI is once again grabbing attention with its latest AI breakthrough, this time in the realm of video generation. The unveiling of Sora, an AI video generator capable of producing hyper-realistic videos from simple text inputs, is nothing short of remarkable (worth looking up). Despite some minor imperfections in its output, the progress made in just a year is astonishing. The implications of this technology are vast and will undoubtedly fuel discussions for years to come. With tools like Sora, access to advanced video editing capabilities becomes democratized, potentially reshaping industries like business, art, and production. The news has already caused ripples in the market, evidenced by Adobe's stock dipping nearly 10%. While speculative reactions may be premature, it prompts us to consider the evolving business landscape. Additionally, Microsoft's significant investment in OpenAI adds another layer of intrigue to this development. With safety concerns in mind, OpenAI has restricted access to Sora to a select group of users, emphasizing the need for careful regulation before wider deployment.