News & Insight • Weekly Newsletters

29 August 2025 | William Buckhurst

That Was The Week That Was

MACRO NEWS

US PCE inflation, the Federal Reserve's preferred inflation measure, rose by 2.9% year-on-year in line with expectations; although at its highest point since February, it was seen by markets as not enough to upset the chances of a 25bps rate cut in September. 

It emerged that Federal Reserve Governor Lisa Cook has sued President Trump over his attempt to fire her from the Fed over alleged mortgage fraud. Trump has claimed that Cook may have lied on mortgage applications to get better loan terms on a pair of homes with Cook stating that this was not a sufficient “cause”.

President Trump doubles tariffs on Indian goods to 50% in retaliation for India’s continuing purchases of Russian oil. The new tariffs will impact more than 55% of goods shipped to the US and will hurt labour intensive industries such as textiles and jewellery, although key export sectors such as electronics and pharma were exempted.

French bond and equity markets reacted this week to news around a potential no confidence vote in Prime Minister Francois Bayrou’s government.

India and China will resume direct flights after more than five years as two of the world’s biggest economies seek to rebuild political ties amid rising trade uncertainties. The plan was announced by Indian Prime Minister Modi as he met Chinese President Xi at a summit in Tianjin. He did not provide details on when the flights will resume.

COMPANY NEWS

Nvidia’s much anticipated quarterly results showed that it continues to grow at a phenomenal rate (revenues up 56% compared to last year, with profits up 54%). Revenue growth forecasts for the current quarter were not much higher than analysts' estimates ($54bn "plus or minus 2%" compared with estimates of $53.14bn). But importantly, their forecasts exclude any potential shipments to China since exports of Nvidia's H20 chip, designed with the Biden administration's export crackdown on advanced AI powering chips in mind, has now been banned under US national security grounds. If geopolitical issues subside and it gets more orders, the company said that it could add $2bn to $5bn in H20 revenue this quarter. CEO Jensen Huang estimated spending on AI infrastructure will reach $3 trillion to $4 trillion by the end of the decade.

Meanwhile, China’s own AI chip designer Cambricon Technologies Corp. plunged almost 9% in one day last week after warning investors about a doubling in its share price over just a month.

Snowflake closed up sharply on the week after reporting better than expected revenue and profits. The cloud data platform, which charges businesses to store, analyse and share large amounts of data without having to build their own servers, has seen its share price more than halve over the last two years. The company guided to quarterly product revenue slightly above estimates while increasing full-year product revenue guidance to $4.4bn vs $4.34bn expected as management commented that they had an enormous opportunity ahead as they continued to empower every enterprise to achieve its potential through data and AI.

Super Micro Computer cautioned that weaknesses in its controls related to financial disclosures could, if not fixed, hurt the company’s ability to report results “in a timely and accurate manner”.

Eli Lilly extended its lead over rival, Novo Nordisk, after releasing encouraging trial data around its attempts to release its successful weight-loss drug in pill (oral) format.

Pernod Ricard results showed that organic sales fell 4% in the first half of its fiscal year and they lowered sales guidance for the year ahead.

PROPERTY PULSE

A RICS index showed new vendor instructions have been posting net positive readings since July 2024, meaning estate agents seeing an increase in supply. It’s the longest supply growth stretch since 2004.  The sudden abundance in a market where supply has been tightening for most of the past decade is in part the result of landlords putting their rental properties on sale as they brace for a raft of cost increases from regulatory and legislative changes. The Times suggested that the Labour government is considering applying national insurance to rental incomes.

Despite a modest rally from a low point in late 2023, most UK housing data (from the likes of Halifax, Nationwide and Rightmove) still show marked falls in prices from the high points reached in 2021, with that fall looking particularly acute in London and the South East.

CHIPS WITH EVERYTHING

With the market focused on Nvidia results last week, it is an opportune time to drill down into where their mammoth revenue gains may be coming from. For a company that first came to prominence designing advanced chips for video games, we now know that chips related to AI infrastructure/data centres account for 88% of their revenues.

The company reported that two Nvidia customers made up 39% of its revenue last quarter and this raises concerns about the concentration of the chipmaker's clientele. "Customer A" made up 23% of total revenue, and "Customer B" comprised 16% of total revenue, according to the company's second-quarter filing. We know that last year the five largest hyperscalers (big cloud players like Amazon, Microsoft, Alphabet, Meta, etc.) collectively poured about $197bn into AI infrastructure. Much of that likely went to chips - GPUs, custom accelerators, and related servers. This year that figure is expected to grow to around $280bn. Nvidia also said that demand for its AI systems remains high, not just among cloud providers but among enterprises buying systems for AI, "neoclouds" and foreign governments.  

Chief Financial Officer Colette Kress said the company's "sovereign AI" efforts - a push to sell AI chips and software to governments around the world - are on track to generate $20bn in revenue this year. Kress also said AI efforts are on track to spur $600bn in spending by cloud and enterprise customers this year alone and, as mentioned earlier, could generate $3trn to $4trn in infrastructure spending by the end of the decade.

THE WEEK IN HISTORY

1907: James E. Casey founded the American Messenger Company, which eventually grew into UPS. The company went public in 1999, becoming one of the largest IPOs at that time.

2007: Amid the early warning signs of the impending global financial crisis, President George W. Bush announced a limited bailout for homeowners unable to service their mortgages, and subprime lender Ameriquest collapsed on August 31 2007.