Investors remain chipper about Nvidia

Summary

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FT News Briefing

Episode Title: Investors Remain Chipper About Nvidia
Date: August 29, 2025
Host: Mark Filippino, Financial Times
Guests: Katie Martin (FT Markets Columnist), Leo Lewis (FT Tokyo Bureau Chief)

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Overview

This episode covers three key global business themes:

1. Small Nations’ Trade Partnerships: A new initiative among smaller WTO members aiming for greater trade openness
2. Nvidia's Earnings and Market Mood: Mixed signals following Nvidia’s strong earnings against a backdrop of AI-hype concerns and macro uncertainty
3. Japan's "Ninja" Stock Rally: The quiet but record-breaking climb of Japan’s Topics Index, fueled by both domestic and foreign investors

The tone is brisk and incisive, aiming to provide context and clarity to complex financial stories shaping investor sentiment and global markets.

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1. Small Nations Band Together on Trade (01:37–03:13)

Key Points

• New Trade Group: Singapore, UAE, and New Zealand are preparing to unveil the “Future of Investment in Trade Partnership” to promote trade openness, likely including about 10 countries.
• Objective: Small and mid-sized nations strengthening links amidst US protectionism (notably, tariffs under President Donald Trump).
• Coalition Nature: The group will start as a loose coalition focused on openness and international trade rules, but it could evolve.
• Contextual Hook: A related episode of the FT’s Swampnotes podcast covers the WTO and shifts in global trade.

[No direct quotes or hard timestamps; segment concludes at ~03:13]

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2. Nvidia’s Earnings: Investor Optimism Defies Gloomy Outlook (03:13–07:34)

Key Points

Earnings Snapshot

• Nvidia posted revenues of $47 billion last quarter—a “banger earnings report” (03:33).
• Despite this, it issued a more uncertain outlook due to China sales risk and broader market concerns.

Why the Stock Barely Moved

• Market Reaction: “Not a lot happened to its stock, but there was some stuff you could read in between the lines...that do give some reasons for caution.” – Katie Martin (03:33)
• China Complications: Trump administration recently allowed certain Nvidia chip sales to China, but with a US government cut; long-term sales rebound remains unclear.

  “They're reluctant to build future Chinese sales into their earnings outlook...They’re just not sure how quickly sales are going to come back after this prohibition...has been lifted. So it's all just a little bit iffy.” – Katie Martin (03:54)

Nvidia’s Significance in the Market

• Market Titan: Nvidia is now the world’s largest company, alongside tech giants like Amazon, Apple, and Meta—collectively dominating the S&P 500 index.
• Magnificent Seven: The top 10 companies occupy around 40% of the index; sparse market breadth sparks concern.

  “It's hard to overstate. This company is the biggest company in the world...together with...Amazon, Apple, Meta...occupy a gigantic slice of the US stock market.” – Katie Martin (04:53)

AI Hype and Investor Disquiet

• AI Bubble Concerns: Even AI leaders (e.g., Sam Altman, OpenAI) warn that some investors are “getting overexcited.”

• Thin Real-World Returns: Recent MIT report showed 95% of organizations are getting zero return from AI (06:10).

• Macroeconomic Headwinds:

  • Recent tech selloff
  • Central bank independence concerns in the US
  • Perception: a hostile market climate—yet investors seem unbothered.

• Unanswered Questions:

  “There are plenty of people out there in financial markets who are like, nope, this does not make sense and at some point something's got to give.” – Katie Martin (07:05)

• Katie reassures the host:

  “It's not just a you thing. No, you're not being an idiot. No, absolutely not.” – Katie Martin (06:58)

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3. Japan’s “Ninja” Stock Market Rally (07:41–11:46)

Key Points

What’s Happened?

• Japan’s Topics index has reached a record high after four months of gains following Trump’s “Liberation Day” tariffs.

  “The Japanese market just kept going higher and higher...what was interesting about it is how little fuss was being made about this very steady advance...So the reason it was dubbed a stealth rally, a ninja stealth rally, was because it reached this all time high without anyone really making a big fuss about it.” – Leo Lewis (07:58, 08:39)

Who’s Investing?

• Foreigners led the charge, but domestic investors (including retail) are increasingly active, in part thanks to government incentives.

  “Domestic investors—which include retail investors, individual Japanese...were getting involved as well. So we had multiple forces pushing this rally up.” – Leo Lewis (08:51)

Why Now?

• Tariff Relief: Initial news of 25% tariffs alarmed markets.

• Outcome: Actual tariffs closer to 15%—“a certain relief”.

  “It’s not great, but it’s not quite as bad.” – Leo Lewis (09:28)

• China is Less Attractive: US-China tensions make Chinese and some Asian emerging markets less appealing; Japan stands out as a logical, liquid destination for Asian-invested capital.

  “If you’ve got loose capital that’s been destined for Asia and now it’s looking for a home, Japan is really pretty much the logical choice. And that’s exactly what’s happening.” – Leo Lewis (10:07)

Risks to the Rally

• Ongoing US Tariff Uncertainty

• Japanese Political Instability

• Potential for Rate Hike: Could help domestic banks (a major part of the index); Bank of Japan assessing wage and labor market trends.

  “There is certain political ruction...some uncertainty about how long the Prime Minister will last...the idea of an interest rate hike...is now something that everyone's taking pretty seriously. On the other hand, a rate hike is pretty good for the banks...We had the governor of the Bank of Japan talking about...the link between the tightness of the labor market here and the prospect that wages will rise.” – Leo Lewis (10:47)

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Notable Quotes & Memorable Moments

On the Unnerving Calm Among Investors

“There are plenty of people out there in financial markets who are like, nope, this does not make sense and at some point something's got to give.”
— Katie Martin (07:05)

On the AI Trade’s Monolithic Market Share

“The top 10 companies in the S&P 500 just occupy a really unusually massive slice of the index, like something like 40% of the index. If you really want to, you can get really worried about that.”
— Katie Martin (05:13)

On Japan’s Stealth Rally

“It reached this all time high without anyone really making a big fuss about it.”
— Leo Lewis (08:39)

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Timestamps for Key Segments

• Trade Partnerships & WTO: 01:37 – 03:13
• Nvidia Earnings & Market Mood: 03:13 – 07:34
• Japan’s Rally: 07:41 – 11:46

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Takeaways

• Investor Resilience: Despite mixed signals—ranging from AI skepticism to macro uncertainty—investors remain undeterred, particularly in tech (Nvidia) and Japanese equities.
• Trade and Policy Shifts: Small countries are organizing in new coalitions to resist rising protectionism, carving out space for global trade rules.
• Cautious Optimism: While rallies persist, both experts and market participants highlight underlying fragilities and the risk of sudden sentiment shifts.

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Transcript

[A]

Today's markets move fast. Get the insights you need in 10 minutes with the Barclays Brief, a new podcast from Barclays Investment Bank. Through sharp dialogue and scenario based analysis, our leading experts analyze key market themes each week. So whether you're managing a portfolio or leading a business, the Barclays Brief podcast can help you make smarter decisions today. Stay sharp, Stay briefed. Find Barclays Brief wherever you get your.

[B]

Podcasts Good morning from the Financial Times. Today is your lucky day. I'm going to the FT Weekend Festival in London on Saturday, September 6th. We're kicking off the festival just before 10am with a political podcast event. I'll be joined by Whitehall Editor Lucy Fisher, Political Editor George Parker and US Managing Editor Brooke Masters for your fix of all things political. You can book your ticket and find all the details on the FT Weekend Festival website. So please join me Mark Filippino, in person for all the news you need to start your day. Or I guess in this case, festival. Okay, for real this time. Good morning from the Financial Times. Today is Friday, August 29th and this is your FT news briefing. There is a stirring of a trade partnership by small nations within the World Trade Organization and Japan is enjoying a so called ninja rally. Plus, investors are unfazed by Nvidia's not so great outlook, but there are plenty.

[C]

Of people out there in financial markets who are like nope, this does not make sense and at some point something's got to give.

[B]

I'm Mark Filippino and here's the news you need to start your day. A few members of the World Trade Organization are looking at collaborating on trade. Singapore, the United Arab Emirates and New Zealand are preparing to unveil a new grouping to boost quote trade openness. It's going to be called the Future of Investment in Trade Partnership and it's expected to include about 10 countries. A final list of nations has not been confirmed though. So why are they doing this? Well, small and medium sized countries are trying to strengthen their own trading links in the era of US President Donald Trump's tariffs. Someone involved in the discussions told the FT that the idea is to keep it as a loose coalition to bolster openness and international trade rules, but they added that it might evolve into something bigger. Shameless plug here we did an episode of the swampnotes podcast that I host about the WTO and the new global Trade order. If you want to check it out, the link is in the show notes. The US Chipmaker Nvidia released a solid earnings report this week. Sales were up more than 50% last quarter, its outlook was a little bit more gloomy. The company warned that uncertainty about China sales could slow growth this quarter, which could fan the flames of investor anxiety that all this artificial intelligence hype might fall flat. Here with me to talk about investor thinking is the FT's markets columnist, Katie Martin. A hey, Katie.

[C]

Hey, Mark. How you going?

[B]

I'm doing all right, but I'm a little confused by what's happening in the markets right now, as I normally am, which is why I've come to you. Why don't you set the scene for us first? Nvidia comes out with this banger earnings report after the US Market closes on Wednesday. What happens to its stock and why?

[C]

Well, the answer is not a lot happened to its stock, but there was some stuff you could read in between the lines of what Nvidia was saying that do give some reasons for caution. So let's not not muck about with this. They had a great quarter. They had revenues of $47 billion in the quarter.

[B]

That's a ton of money.

[C]

That is a lot of dollars. But as you say, they're reluctant to build future Chinese sales into their earnings outlook for the coming quarters, which is a bit of a kind of way of saying, yeah, we're just not sure how this stuff is going to pan out. Because if you rewind just a couple of weeks, Nvidia is one of the companies that struck a deal with Donald Trump and the Trump administration recently to say, okay, we're going to restart certain chip sales to China, but the federal government's going to get a 15% cut of the revenues. This is a very unusual thing to do. And they're just not sure how quickly sales are going to come back after this prohibition on selling these types of chips to China has been lifted. So it's all just a little bit iffy.

[B]

Right? As we're talking right now about midday New York on Thursday, Nvidia is down 1%.

[C]

Yeah.

[B]

I think it's important to unpack just how important Nvidia is in the AI investing story overall.

[C]

Honestly, it's hard to overstate. This company is the biggest company in the world and together with a clutch of other really big technology companies, the likes of kind of Amazon, Apple, Meta, that they occupy a gigantic slice of the US stock market.

[B]

Something this is the Magnificent Seven, right?

[C]

This is the Mag Seven. But together, like the top 10 companies in the S&P 500 just occupy a really unusually massive slice of the index, like something like 40% of the index. If you really Want to, you can get really worried about because you can think to yourself, okay, there's been this enormous surge into the AI trade effectively over the past two years. This idea that artificial intelligence intelligence is the transformative technology of the 21st century and that there's no such thing as throwing bad money into this. It's all going to make money. Even some of the really big executives in this space. You look at Sam Altman from OpenAI, they're the brains behind ChatGPT. Even he is saying, look, there are some investors who are getting over excited. And so now there is a little bit more disquiet. And I don't know, and you don't know how far that's going to run, but it is new and it's worth keeping an eye on.

[B]

Well, this is the thing that trips me up, right? So you have the thing that Sam Altman said. We had the MIT report that came out a little while ago that basically said that 95% of organizations are getting zero return from artificial intelligence. We saw a sell off in stocks last week that dragged down the S and P and the nasdaq. Then on top of that, we're starting to see central bank independence in the US come under severe threat, which in theory should shake investors. And those two things combined in my mind would have created a really unwelcoming climate for investors.

[C]

No, not just in your mind. I am asking exactly the same question. Economists who know an awful lot more about the world, like Paul Krugman, are asking exactly the same question.

[B]

Okay, so I'm in good company. This is, this is not just a me thing, not understanding markets.

[C]

It's not just a you thing. No, you're not being an idiot. No, absolutely not.

[B]

I love to hear, hear that. It's so great.

[C]

So some investors that I speak to in absolute fairness are saying, look, you don't need to worry about that stuff. It's all just noise. Just focus on the corporate earnings. And if you look at the corporate earnings from places like Nvidia, I don't see anything to not like here. There are optimists out there who think that this stuff doesn't matter. But there are plenty of people out there in financial markets who are like, nope, this does not make sense. And at some point, something's got to give.

[B]

Kati Martin is the FT's markets columnist. Thanks, Katie.

[C]

Pleasure.

[B]

The Japanese stock market is silently rallying. Four months of gains have driven Japan's Topics index to a record high. I'm joined now by the FT's Leo Lewis, our Tokyo bureau chief. Hey Leo.

[D]

Hello there. Hi.

[B]

So tell me about this rally. When did it start?

[D]

So it started about four months ago and the low point was just after Donald Trump announced his Liberation Day tariff plans. And really after that, the Japanese market just kept going higher and higher. And what was interesting about it is how little kind of fuss was being made about this very steady advance in what is a very big market. And often a market that rallies don't last for a very long time. So the reason it was dubbed a stealth rally, a ninja stealth rally, was because it reached this all time high without anyone really making a big fuss about it.

[B]

Well, we are talking about it now and I'm wondering who's investing all this money into the Japanese market? Is it foreign investors? Is it domestic investors? Is it both?

[D]

So the really interesting thing about rallies in the Tokyo market are that the biggest ones have tended to be led by foreigners. And these rallies are good, but they don't last terribly long. And this one, it was led by foreigners. But what was so interesting about this is that domestic investors, which include retail investors, individual Japanese who invest in their money more enthusiastically than in the past with some government incentives to do so, were getting involved as well. So we had multiple forces pushing this rally up.

[B]

And why are we seeing this rally now, Leo?

[D]

Well, one of the key reasons is that earlier in the year we heard about the big tariffs that were going to be imposed and Japan discovered that it was going to be subject to perhaps tariffs of 25%. And obviously for a country that is exporting a lot of cars to America, along with a lot of other industrial goods, this was, you know, a disaster. And eventually the news came out, well, look, it's going to almost certainly be close to 15 and actually there was a certain relief. It's not great, but it's not quite as bad.

[B]

Well, are there other factors at play here besides the Trump administration tariffs?

[D]

Yes, there are, notably China. The level of tension between the US and and China is high enough that it's quite premature in many investors view to think about getting back into China. Emerging markets in Asia have got their own risks. And actually Japan is this big, deep, liquid market sitting there with a lot of opportunity. And if you've got loose capital that's been destined for Asia and now it's looking for a home, Japan is really pretty much the logical choice. And that's exactly what's happening.

[B]

Is there concern that this rally could fizzle out, that it could be in danger?

[D]

Yeah. So there's a couple of things there. The tariff and other negotiations with the United States continue with some setbacks. There's a certain level of political ruction here in Japan, with some uncertainty about how long the prime Minister will last. And the idea of an interest rate hike, perhaps within the calendar year, is now something that everyone's taking pretty seriously. On the other hand, rate hike is pretty good for the banks, and the banks are a big constituency of the Topics index. We had the governor of the bank of Japan talking about what he sees as a link between the tightness of the labor market here and the prospect that wages will rise. And so there is still good reason to think that a lot of the factors that people have been hoping for in Japan are all combining. And that is the view that's underpinning all of this.

[B]

Leo Lewis is the FT's Tokyo bureau chief. Thanks so much, Leo.

[D]

Thank you.

[B]

You can read more on all these stories for free when you click the links in our show Notes this has been your daily FT news Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Sonia Hudson, Josh Gabbard Doyon, Ethan Plotkin and me, Mark Filippino. Our show was mixed by Blake Maples and Kelly Garry. We had help this week from Adam Sampson and Gavin Kallman. The FT's acting co head of audio is Topher Forges and our theme song is By Metaphor Music.

[D]

Thinking long term about your investment career? Hear stories, advice and lessons from seasoned leaders at Capital Group on the Capital Ideas podcast. Subscribe and start listening today. Published by Capital Client Group Inc.

[A]

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