What’s going on here?

Nvidia – the chipmaker at the center of the AI frenzy that’s driven US stocks to record highs – reported its hotly awaited quarterly results late on Wednesday.

What does this mean?

Nvidia is responsible for roughly a fourth of the S&P 500’s uptick this year. And with its AI chips more in demand than ever, analysts had been bucking up their projections ahead of this week’s big reveal. Turns out they were still too conservative: Nvidia made $26 billion in revenue last quarter – 18% more than the period before and well beyond predictions of $24.7 billion. What’s more, the company said the next set of results would be even spiffier, forecasting sales of $28 billion – above analyst expectations of $26.8 billion. Investors liked the sound of that: they initially sent Nvidia’s stock 4% higher after the news, meaning it’s now virtually doubled this year after more than tripling in 2023.

Why should I care?

The bigger picture: Hey, big spender.

Remember, every dollar Nvidia makes is a dollar spent by someone else. Right now, that spender is Big Tech firms: they’re funneling billions into data centers to earn big bucks down the line. But it’s an expensive bet: when a business buys a big-ticket item, the depreciation – that’s the value an item loses each year – counts as an expense for years to come. So unless Big Tech firms bring revenue up in line with those rising costs, they could see their profit margins shrink over time.

For markets: Pockets feeling heavy.

Nvidia also announced a 10-for-1 stock split on Wednesday, which isn’t a shocker. See, companies perform splits when their stock becomes too successful, commanding a price tag so high that it puts retail investors off. By splitting the stock, the firm creates the illusion that its shares are better value – even though it would take ten new $100 shares to match the ownership of a single old $1,000 one.

What’s going on here?

China's critical minerals dominance is only getting stronger despite the West's best efforts.

What does this mean?

From nickel to cobalt and lithium, Chinese companies are dominating the critical minerals industry right now. They’re expanding operations, pushing up supply, and driving down prices, making it nearly impossible for global companies to compete. Just look at nickel, which is essential for making EV batteries. Chinese firms are flooding the market with the metal, while a Swiss plant and Western Australian mines had no choice but to close up shop. The US isn’t immune, either. The country’s only dedicated cobalt mine shut down last year, unable to keep up with China’s cheaper prices. That’s a common trend: countries outside of China are producing the lowest levels of refined cobalt in 15 years. And when it comes to lithium, China’s global market share of the mining side has jumped from 14% in 2018 to 35% this year.

Why should I care?

Zooming out: Not letting up.

China’s producers are digging in resource-rich countries that Western firms often avoid, like Indonesia, Mali, and Bolivia. Mind you, it helps that they’re flush with cash, benefiting from serious backing from the state. Thing is, China’s domestic market can’t soak up this flood of minerals, so the country’s been pushing uber-cheap products and resources into the global market. This is only the latest saga, too: China’s stream of EV exports contributed to a global price drop last year.

The bigger picture: Fighting back.

The US tried to raise its shield last week, hiking tariffs on $18 billion worth of Chinese goods. And now, it’s attempting to rally European allies into a united front – but the longer it takes, the lower prices fall. The stakes are high: if a trade war heats up, global supply chains could be thrown into chaos. That would hike costs for businesses, and possibly trigger inflation again.