What We Learned This Week

Nvidia is in a Tough Spot: Nvidia has had a tough run lately. After dominating markets as the undisputed leader of the AI boom, the company now finds itself caught in the crossfire of a fast-evolving U.S. trade policy. Heavily reliant on Taiwan for manufacturing, Nvidia took a hit when the administration announced sweeping reciprocal tariffs—Taiwan included—with rates nearing 40%. A brief rally followed news of a 90-day tariff delay and exemptions for certain tech components, but that was quickly muddied by talk of separate, targeted tariffs for chips and related tech.

The real blow came mid-week, when Nvidia disclosed that U.S. regulators would now require special permits to sell China-specific GPUs, forcing the company to write down over $5 billion in inventory this quarter. While the export controls began under the previous administration, the renewed pressure adds real weight to concerns over future growth. Nvidia still sits at the center of the AI infrastructure buildout, but its valuation is based on global, uninterrupted demand. If geopolitical friction becomes a permanent headwind, those growth assumptions may need to be reset.

Meta Faces Potential Breakup: The high-profile antitrust case against Meta kicked off this week, and it could mark a pivotal moment for both the company and the broader U.S. regulatory landscape. The FTC argues that Meta’s acquisitions of Instagram and WhatsApp nearly a decade ago were anti-competitive moves meant to eliminate emerging threats, resulting in a dominant position that harms consumers. Unlike traditional antitrust cases involving price manipulation, this one hinges on the idea that Meta’s dominance has led to lower-quality experiences—more ads, less innovation, and fewer viable alternatives—despite the platforms being free to use.

Meta is expected to push back hard, arguing that the competitive landscape is much broader than just social media. It will point to TikTok, YouTube, Apple’s iMessage, and even Netflix as direct competitors for users’ time and attention. The case is shaping up to be a long legal battle, but the implications are massive. A ruling against Meta could lead to a forced divestiture of Instagram—one of the most significant corporate breakups in modern U.S. history. While a final decision is likely years away, this is a case worth watching closely given its potential to reshape both tech and antitrust enforcement.

Economy Hitting Louis Vuitton Buyers: Luxury giant LVMH reported a disappointing quarter, fueling concerns that macroeconomic uncertainty may finally be catching up to even the higher-end consumer. The company, which owns brands like Louis Vuitton, Moët Hennessy, and Tiffany, saw notable year-over-year declines in its wine and spirits division as well as key leather goods, with drops between 5–10%. While weakness in the U.S. and China led the slide, growth was sluggish globally, with Europe the only region showing positive organic growth. LVMH noted it’s closely monitoring the U.S. tariff situation but hasn’t adjusted pricing yet.

Luxury brands like LVMH are especially sensitive to shifts in consumer sentiment—particularly among aspirational buyers, who can afford the products but are more likely to pull back during uncertain times. These consumers are not necessarily in financial trouble, but their willingness to spend on discretionary luxury can wane quickly. This contrasts with ultra-luxury names like Hermès, which cater to the ultra-wealthy whose spending is far more resilient. The stock’s sharp decline—its worst since the early pandemic—underscores growing concerns that softness is creeping into broader consumer behavior. With more luxury and discretionary earnings reports ahead, all eyes will be on whether this is a one-off or part of a larger trend.