Nvidia Earnings Lead to Share Slump; SpaceX IPO Details

0:00Did you know that passive fixed income ETFs only capture about 50 % of the US public bond market? But with JPMorgan Asset Management's active fixed income ETFs, we can help you capture 100 % of the U.S. public bond market and explore twice as many opportunities. Visit jpmorgan.com slash get active to learn more. JPMorgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by JPMorgan Distribution Services, Inc., member of FINRA. So there's a lot of noise about AI, but time's too tight for more promises.

0:34So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. Everyone has been there. Your team's feedback is scattered across emails, chats, and sticky notes. It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment.

1:15So, if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that. Do that. Do That With Acrobat. Learn more at adobe.com slash do that with Acrobat. Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Well, Karen, we begin with the lukewarm market reaction we're seeing to another blowout from NVIDIA. Sales at the world's most valuable company gained 85 % to$81.6 billion in the latest quarter.

2:07And NVIDIA forecasts sales in the coming quarter of about$91 billion. It also boosted its quarterly dividend and announced an$80 billion stock buyback. NVIDIA CEO Jensen Wong says he expects demand to come from ordinary businesses outside the tech sector. This was an extraordinary quarter. Demand has gone parabolic. The reason is simple. Agentic AI has arrived. AI can now do productive and valuable work. Tokens are now profitable. So model makers are in a race to produce more. In the AI era, compute capacity is revenue and profits. NVIDIA is the platform of this era. NVIDIA CEO Jensen Wong says he aims to rely less on giant data center operators and predicts other businesses and governments will become a bigger source of revenue for the company's chips and computing products.

2:57Paul Meeks covers NVIDIA for Freedom Capital Markets. He says he's not concerned with the numbers. I'm not necessarily worried about what they printed or even this guidance, but this guidance is not disappointing. I think it's fine because you know what? It'll be$91 billion, and then they're going to upside it like they always do. So this will be much better at the end of the day than The Whisper. Paul Meeks at Freedom Capital Markets. Right now, NVIDIA is trading down about two-tenths of one percent pre-market. Well, Nathan, there's also a couple of high-profile IPOs on the way for investors.

3:27And Bloomberg's John Tucker joins us with the very latest. John, good morning. Good morning, Karen. Elon Musk's SpaceX filed publicly for what stands to be the largest ever initial public offering. Filing with the SEC also reveals the company has billions of dollars in losses. And the way it's set up right now, it would give Musk the power to outvote anybody else and give him as many as a billion shares. Now, according to the filing, Musk would have to hit certain goals for the rocket satellite and AI company. These goals include a human settlement on Mars with at least one million inhabitants.

4:04And oh, yeah, SpaceX would first have to build data centers in space. All right, John. Well, if that's not enough to absorb this morning, there's another Wall Street debut that appears to be on track as well. Yeah, Karen, this one is OpenAI, the maker of ChatGPT. Our sources say the company aims to file for an initial public offering in the coming days or weeks as it tries to make the transition to a for-profit company. Now, the plans are falling in place after a judge dismissed Elon Musk's legal battle against OpenAI. The decision to push ahead with a listing this year could help it beat its rival, Anthropic, to the public markets and compete for investors.

4:40In New York, I'm John Tucker, Bloomberg Radio. All right, John, thanks. So, Anthropic is mulling an IPO as soon as October. Ahead of that, the company's on pace for its first profitable quarter after experiencing a surge in revenue driven by a demand for its artificial intelligence software. Bloomberg News has learned the Claude maker expects to post$10.9 billion in revenue for the second quarter, more than double the prior three-month period. Nathan, let's get to the latest now in the war in the Middle East. The U.S. and Iran are trading threats once again as the standoff over the Strait of Hormuz drags on.

5:10President Trump says he's in the final stages with Iran while warning he could resume attacks in the coming days if it doesn't agree to his terms. The only question is, do we go and finish it up or are they going to be signing a document? Let's see what happens. And that was President Trump delivering the commencement address at the U.S. Coast Guard Academy. We get more from Bloomberg's Paul Wallace in Dubai. This could be just more posturing from Donald Trump. He has given plenty of signals that he is desperate to sort of extricate himself and the U.S. forces from this war. And all signs point to him really trying to avoid a return to hostilities given the surge in energy prices globally.

5:52And Bloomberg's Paul Wallace reports Iran has threatened to retaliate beyond the Middle East if the U.S. or Israel resume strikes. Now, this morning, Iran's semi-official students' news agency is reporting Tehran is reviewing the latest USP's proposal and says it's narrowed the gaps to some extent. The report says further narrowing, quote, requires an end to the temptation of war on Washington's part. Karen, the U.S. is facing protests in Greenland's capital as a new consulate opening fuels concerns over Washington's designs for the island. The U.S. will inaugurate the new consulate building in Nuke today, its first in Greenland since the 1950s.

6:31It marks a more permanent American presence on the Arctic island, where unease has grown since President Trump revived talk of acquiring the territory. Nathan, the Trump administration is putting new pressure on Cuba as the economic standoff over the island continues. The U.S. has charged former Cuban President Raul Castro with murder over the 1996 drowning of two aircraft run by a Florida-based Cuban exile group. Four people were killed in the incident when the 94-year-old former president was Cuba's defense minister. Acting Attorney General Todd Blanche announced the indictment. For the first time in nearly 70 years, senior leadership of the Cuban regime has been charged in this country, in the United States of America for acts of violence resulting in the deaths of American citizens.

7:20The announcement by Acting Attorney General Todd Blanche could raise speculation about military action against Cuba, like the ray that captured Nicolas Maduro in Venezuela earlier this year. President Trump is indicating there won't be further escalation for now. Karen, JPMorgan Chase CEO Jamie Dimon is criticizing New York's Mayor Zoran Mamdani and his plans to slap more taxes on the rich. In an interview with Bloomberg in Asia, Diamond said the move risks doing further damage to the city's business hub status. They think that somehow being anti-business is going to help the city. It's not. So we all want to pay fair taxes.

7:56That's not the point. But at one point, people vote with their feet. And there are a lot of studies that have shown that all these people moved out. And obviously, New York's booming. So you're not going to see it in this year's taxes. but a lot of people are paying billions of dollars taxes left. Why do you want that? How does that help the lower paid person in New York? Jamie Dimon's comments followed a recent meeting with Mom Donnie. He has criticized Wall Street bankers and other executives and is pushing for tax hikes to plug New York City's budget shortfall. Catch the full conversation with J.P.

8:26Morgan's CEO, Jamie Dimon, on our new video hub on the Bloomberg Business app.

8:34Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Two police officers who helped defend the U.S. Capitol during the January 6th riot are suing to block anyone from receiving payouts from a new$1.776 billion settlement fund for people who claim to be victims of politically motivated prosecutions. There's the possibility that rioters who assaulted police that day would be eligible for fund payouts. Former Capitol police officer Harry Dunn, a co-plaintiff in the lawsuit, spoke to ABC.

9:11He's trolling us with the 1776 thing. He's trying to make this some type of patriotic symbol, but this could be the most unpatriotic thing, rewarding terrorists and insurrectionists. Former officer Dunn is currently running for Maryland's 5th congressional district. President Trump insists the fund is needed to help people he claims were mistreated by the Biden Justice Department. People were destroyed. They went to jail. Their families were ruined. But there is outrage on Capitol Hill among a growing number of Republicans and Democrats rejecting the idea of taxpayer payouts to rioters. The WHO says the Ebola outbreak probably started months ago in Central Africa and spread undetected until a super spreader event in early May, possibly a funeral.

9:58Meanwhile, health officials gave an update on Peter Stafford, the American doctor infected with Ebola while working in the Democratic Republic of Congo. Dr. Satish Pillai is the CDC's incident manager for Ebola response. The American has landed in Germany and is at the hospital and in stable condition. The WHO says almost 600 suspected cases and 139 deaths are linked to the outbreak. We didn't need this with millions traveling for the Memorial Day weekend. Planes were halted after a sinkhole opened up on the runway at New York's LaGuardia Airport. More than 200 flights were canceled and hundreds more delayed, shutting down one of LaGuardia's two runways.

10:40Airport officials are rushing to make repairs. Global News 24 hours a day and whenever you want it with the Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Game two of the NBA's Western Conference Finals. Victor Wembenyama was coming off a 42-point effort in game one. This time, half of that, he scored 21. And the Spurs lost at Oklahoma City, 122-113. The series is tied at one. Game one in the West of the Stanley Cup playoffs. Vegas took a 3-0 lead, went on to win 4-2 at Colorado.

11:16Aaron Rodgers met the media in Pittsburgh, getting ready to play for the Steelers. He confirmed that 2026 will be his final season. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Is passive investing costing you more than you think? Active ETFs aim to beat the benchmark, while passive ETFs just settle for them. Embrace an active strategy that helps you build stronger portfolios. Invest with a global leader in active fixed income ETFs with JPMorgan Asset Management. Visit jpmorgan.com slash get active to learn more. JPMorgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co.

11:58and its affiliates worldwide. This communication is issued by JPMorgan Distribution Services Incorporated, member of FINRA. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise, proof of how We can help companies get smarter by putting AI where it actually pays off deep in the work that moves the business. Let's create smarter business.

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13:36Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. It was the earnings story investors awaited for weeks, and it's getting a lackluster reaction this morning. NVIDIA came out with a revenue forecast right around the middle of Wall Street estimates. But CEO Jensen Wong says the future is here and his chip giant is right where it needs to be. The world is rebuilding computing for agentic AI and robotic physical AI. NVIDIA sits at the center of these transitions.

14:13That was NVIDIA CEO Jensen Wong on the company earnings call. joining us this morning after is Neil Campling, senior strategist with the Bloomberg Markets team. Great to have you with us this morning, Neil. So we saw the numbers, an 85 % jump in sales in the quarter gone by, even bigger forecast in the coming quarter. Why the lackluster reaction this morning? Good morning. Good morning. I think as a bit of a travel and arrive here in terms of Nvidia, being the largest company in the world, it's fueling obviously an entire AI ecosystem. But investors in this very, very narrow market that we've seen in recent months in terms of their strengths, it's likely that it is a lack of new investor money coming into this stock itself and looking to play the AI through other sort of other plays in this space.

15:06And as you mentioned, The guidance was solid, but it was within the range of Wall Street estimates. So it didn't surprise to the upside. There was no mic drop moment like we had two years ago. And it's really kind of maturing now into that mature growth tech leader, as we've seen before with the likes of Apple. But to grow those revenues, as you mentioned, 85 % year on year is a substantial number by anyone's metrics. But BuySide has now got used to these kind of estimates. And so we are above some of the whisper numbers, but there are questions that analysts are now having about the sustainability of such growth going forward, especially in my higher competition from the likes of Google creating their own internal chipsets in the future.

15:54So is this a moment where the moat that NVIDIA had built around itself when it comes to the chips that it puts out there, that there are starting to be cracks in that moat? What can it do to seal them? I think the way it's looking at this now is to extend that ecosystem into other parts of the AI market. As you mentioned, Jensen talked last night on the call about$100 trillion of industry that hasn't yet, but is about to be affected by AI. This is taking the AI into the physical AI system. To you and I, it's about in the real world and with robotics and those kind of applications of AI. So they are diversifying into other areas of the market that could be many times the size of existing AI infrastructure.

16:47And I suppose the other thing to think about is that Bloomberg News overnight had an exclusive on Anthropic. Anthropic, a key partner of NVIDIA and others. But the growth rates that Anthropic are talking about now are$10 billion in sales for this current quarter. I mean, this company had no products less than three years ago. So NVIDIA is helping fuel the entire agentic AI revolution that we're witnessing today. In the last minute I have with you, Neil, I got to get your reaction to what we learned from the filing of the IPO for SpaceX. Billions in losses and some big plans from Elon Musk. Some quite incredible statements in that S1 overnight.

17:32not least the ambitions to have 1 million people on Mars in the future. But as you mentioned, the increase in the losses, there's a tenfold increase of those losses to help to sort of fund the exceptional growth trajectory and opportunities they see in the future. It's no wonder they need to come to the market, though, because they are burning through a lot of cash. But, yeah, it's going to be highly anticipated. and with open AI and Anthropic likely to come to the market as well this year, could be a great year for tech. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

18:17Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app, now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

18:55I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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