Nvidia's CEO, Jensen Huang

Nvidia’s market cap hits $1 trillion: The Weekly Scoop

This week, Nvidia joins the $1 trillion club, Tesla talks with China and Ford, and Victoria’s Secret shares aren’t looking luxurious. It’s been a crazy week in the stock market folks, let’s dig into The Weekly Scoop!

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Nvidia shares jump 25% as market cap hits $1 trillion 🤖

The $1trillion club: If there was one company making all the headlines this week, it was Nvidia. The US chipmaker reached a $1tn valuation on Tuesday, putting it close to the value of retail giant Amazon. How? It produces the chips that are supplying the artificial intelligence boom.

  • In elite company: Nvidia joins other companies such as Meta, Amazon and Alphabet and is just the ninth company in history to reach the valuation. But, some investors have their doubts that the stock is overvalued…

  • The gold rush could be over: Cathie Wood, CEO of Ark Invest, says Nvidia will do well due to the increase in demand for AI chips. But, she feels the rally is over as Nvidia may be overvalued due to its stock price selling almost 20 times above its predicted sales for the year.

Tesla shares climb 5% as Elon Musk visits China 🏎️

Tesla wants China’s business: Elon Musk met with China’s Foreign Minister, Qin Gang, on Tuesday as Beijing pushes to show it’s open to foreign business. It’s Musk’s first trip to China in over three years, so he’s clearly keen to take advantage of the ever-growing economy. 

  • “China rocks”: Those were the words of Musk in 2020 and it seems he’s sticking by them. He’s keen to expand Tesla’s business in China despite other car markers such as Ford and Nissan scaling back their operations. 

  • An af-ford-able deal: For years, Tesla has said it would open its supercharging network up to other EV makers. This week, Ford took Tesla up on that offer and Tesla’s share price responded positively. Why? Because Tesla will be able to profit from customers who don’t even use their cars!

Victoria’s Secret slips 15% due to lacklustre earnings 👚

Slashed earnings: On Wednesday, the lingerie retailer announced some less than impressive earnings for Q1. 

  • Revenue drop: Revenues fell 5% to $1.407 billion, which is particularly worrying given the CEO, Martin Waters, admitted the company overspent on marketing activity during this quarter.

  • Trouble in America: Waters blames the volatile macro environment for harming sales in physical shops and online across North America. But, he did remind investors of the growth the company is having in China, as well as its recent successful acquisition of Adore Me. Has he done enough to calm investor worries?

What have we learned this week? 🤓

  • Sell shovels in a gold rush: AI is the buzz right now. People are waiting for the next ChatGPT, but in the meantime, the companies building AI machinery are the ones reaping the rewards. 

  • China is the world’s 2nd largest economy: Wondering why you hear about China in the news all the time? It's very influential in the investing world, as its economy is just shy of $18 trillion, only $6 trillion behind the US and $13 trillion ahead of 3rd place Japan.

  • Apparel is struggling: Last week, we saw many footwear companies struggle due to macro challenges such as inflation and reduced consumer spending. Victoria’s Secret is the latest apparel company to suffer from these same setbacks. 

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*Figures correct as of June 1st 2023.

Past performance does not guarantee future results. Capital at risk when investing.

This content is for educational purposes only. Shares does not provide investment advice. If you are unsure about anything, please seek advice from an authorised financial advisor.

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James Ashoo

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James has been investing for over five years. His aim is to explain the hard stuff, easily! When he's not chewing your ear off about stocks and crypto, he'll most likely be telling bad jokes.

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