Nvidia shares fall despite revenue doubling and Berkshire joins $1tn club

Good morning. OpenAI is trying to raise billions of dollars, while French authorities have issued preliminary charges against Telegram’s CEO. More details below.

But first, we have the latest market updates, starting with Nvidia. The Silicon Valley-based company’s revenue more than doubled in the past quarter to $30bn, continuing its run of blockbuster growth on the back of demand for its artificial intelligence chips.

Yet the strong performance failed to impress investors and analysts with the most ambitious forecasts. Shares fell in after-hours trading yesterday by as much as 8 per cent after an earnings call led by chief executive Jensen Huang, potentially wiping more than $200bn off its market capitalisation.

On the same day, Warren Buffett’s Berkshire Hathaway joined Nvidia in the exclusive club of companies to be valued at $1tn or more, after a small advance in market capitalisation made it the first publicly traded US company outside the technology sector to do so.

Buffett, who turns 94 tomorrow, has spent the year selling off stocks — including half of Berkshire’s stake in Apple — and pumping the proceeds into cash and short-term Treasuries. Shareholders have rewarded him by pushing the sprawling conglomerate’s valuation up by more than $200bn this year.

• AI bellwether: Nvidia’s earnings have become a gauge for the health of the AI boom and are now as crucial for US markets as key economic data, according to analysts.

Perhaps no other company is now as closely scrutinised on Wall Street. If you have any questions about Nvidia, reply to this email and include your name and where you’re writing from. We’ll answer them in a special weekend edition of FirstFT. (P.S. I’d also love to hear your questions about this newsletter. – Tee)

And here’s what I’m keeping tabs on today:

• Economic data: The US and Sweden have second-quarter GDP figures.

• Starmer in Paris: The UK prime minister is expected to discuss Ukraine and the Middle East with French President Emmanuel Macron, after promising a “closer relationship” with the EU yesterday.

The annual FT Weekend Festival is here, featuring speakers including Wes Streeting, Lesley Sharp and FT experts. Join us on September 7 in London and online for a Saturday filled with debates, tastings, masterclasses and more. FirstFT readers get a special discount — register here now.

Five more top stories

1. OpenAI is in talks to raise billions of dollars at a valuation of more than $100bn as the ChatGPT maker looks to capitalise on its early lead in the booming artificial intelligence sector. The San Francisco-based company is talking to venture capital firms including Thrive Capital, which is set to invest $1bn and lead the round. Read the full story.

2. Republicans fear Donald Trump’s campaign strategy against Kamala Harris is failing after the former president lost momentum to his rival in recent weeks. Supporters and strategists are anxious about his failure to mount effective attacks on the vice-president, with one donor saying: “If he continues down this path, he’ll lose.”

• Trump shuns China: Beijing’s officials are failing to secure meetings with his campaign, underscoring hawkish sentiment in Washington.

3. Telegram chief executive Pavel Durov has been placed under formal investigation by a French judge over alleged criminal activity on the messaging app. He must provide €5mn as a bail deposit, report to police twice a week and has been barred from leaving French territory. Here’s more on the charges.

• EU probe: Brussels is investigating whether Telegram breached the bloc’s digital rules by failing to provide accurate user numbers.

• Messenger of war: From combat orders to air-raid alerts, Telegram has become a vital tool on both sides of the war in Ukraine.

4. Fears that the UK will raise capital gains tax are driving a selling “frenzy” among business owners, property investors and shareholders, according to wealth managers and tax experts. Prime Minister Keir Starmer said this week that the October Budget would be “painful”, adding: “Those with the broadest shoulders should bear the heavier burden.”

5. A Swiss court has sentenced two former PetroSaudi executives to lengthy jail terms for their roles in the collapse of Malaysia’s sovereign fund 1MDB. Former chief executive Tarek Obaid and his right-hand man Patrick Mahony were found responsible for embezzling more than $1.8bn, in what the lead prosecutor has called the “scam of the century”.

The Big Read

A plain cotton T-shirt is a pretty ordinary item of clothing. But for one west African nation, it is intended to be the start of an industrial revolution. Benin has long been trapped in a trading pattern in which it sells cheap raw commodities and imports expensive finished goods. Now, the nation of 13mn people is trying to achieve what few countries in the continent have managed: systematically transform raw materials into finished goods.

We’re also reading . . . 

• German politics: Chancellor Olaf Scholz’s party looks set for a drubbing at Sunday’s elections in east Germany, with his far-right populist opponents polling well ahead.

• DEI: Making diversity, equity and inclusion a business priority is not a fad or a “woke” conspiracy, but a simple matter of maths and marketing, writes Anne Marie-Slaughter.

• Cancer vaccines: BioNTech and Moderna are betting that mRNA, the technology behind their Covid-19 products, can be applied to personalised treatments for tumours.

Chart of the day

China’s use of the renminbi in cross-border transactions has reached record highs this year, as closer ties with Russia bolster Beijing’s efforts to internationalise its currency and cut dependence on the US dollar.

Take a break from the news

How do the 1 per cent spend their holidays? There is a tendency for the super-rich to stick with their tribe and vacation only where other wealthy people are, writes Rhymer Rigby. But some, like Jeff Bezos, might seek an exclusive high-end experience — such as visiting outer space.

Additional contributions from Melody Abike Adebisi and Benjamin Wilhelm