Hello there, Espresso Lovers! The Diwali festivities are done; we are back to the grind, and it almost feels as if, for all the chilling we did during those 5-7 days, the news flow since Tuesday has made up for all of that, just to ensure that we do not get carried away with all the laziness!
It feels good when your optimism pays off, doesn’t it? Around the same time last month, our Espresso spoke about the underperforming largecaps and how investors have only faced disappointment since the Nifty topped in September 2024, and how the only way forward will be higher. Since then, the Nifty is up over 3,000 points, the Nifty Bank is at the cusp of a record high, ICICI Bank is already at record highs, and most other largecaps are up between 10% and 20% over the last few sessions. To all those who stuck around, your patience has just started to pay off. Of course, it’s not celebratory yet, but for stocks that have not delivered anything in years, you’d take 10-15% in days with both hands!
But this week has only been about one man and his antics. Jensen Huang’s fall from grace has been faster and swifter than anyone that comes to mind, not even Lance Armstrong! The face of the AI revolution has now become the face of scandal, speculation, gossip and endless scrutiny of how things eventually ran at Nvidia, which, from a nondescript start-up supplying gaming chips, became the most valuable company in the world in a matter of years. As Arshad Warsi mocked Ajay Devgan in Golmaal Returns (2008): “Man of the house se, man out of the house. Pent house se tent house!” Talk about falling off a cliff? Yup, exactly that.
For a man who did subah ka nashta in one country, jetted off to have dopehar ka khana in another, and had raat ka dinner in a third country, now finds himself out of the company he co-founded 33 years ago. From private jets, Huang will now have to spend the near future addressing congressional hearings, court subpoenas, and multiple investigations involving national security, considering one of his many (yes, it wasn’t only one) affairs was with a woman whom US intelligence claims is a Chinese spy.
The real winner in this? Of course, Nvidia’s competitors – AMD, Broadcom and Alphabet- but no, that’s not the answer. India’s meme factory is the actual winner, and they have had a ball tripping on this entire scandal with one hilarious video after another that are spread across social media.
Yes, there has been a loss of face, loss of reputation, and many other losses, but the real loser in all of this, as has always been the case, is the small shareholder. Nvidia has lost nearly $1.5 trillion in market capitalisation since the scandal came to light, and closed below $4 trillion in value for the first time after June last year. They trusted the man, not the company, and the man has betrayed their trust, as in his own words. There have been such instances in the past of other companies facing similar challenges and them having overcome the same as well. But for Nvidia, this will be tough, very, very tough.
Okay, enough with Nvidia. Back to our markets. The recent rebound seen in the largecap names has taken everyone by surprise. The bigger surprise, though, has been the newfound love for India among Foreign Portfolio Investors (FPIs). In just 10 sessions, FPIs have poured in $9 billion. $9 billion?! Not as if anything changed in the last 10 sessions, and neither is India the only market they could invest in! Is this a record? Almost there. The most FPIs have bought in a single month in India is $9.6 billion, which, incidentally, also happened in November 2020. But what is with this newfound love? We try to decode that in our latest Editor’s Playbook.
While everybody was still reeling from the Jensen Huang aftermath, Microsoft suddenly decided to get into Friday mode/airplane mode / go MIA, whatever. Everything went down – from mail to Teams, and everything Microsoft. The worst affected during this were the IT dudes. Every time something happened, their standard customer care response would be: MAIL DAALO. But who do we mail when the mails aren’t working either? Every two hours, Microsoft would tweet saying work is in progress. The progress lasted a full 24 hours. Full services were only restored late night / early morning on Saturday. Did we function without a mailbox? Of course we did. For those who do a Teams call for the most random things every half hour, it was a dark day for them.
Today’s is Children’s Day. Our newsroom yesterday was the brightest, the happiest, and the cutest it has ever been during the 365 days of the year! The wonderful children of our colleagues were in the studios yesterday, sharing their hopes, ambitions, and dreams, and they are definitely worth taking note. Two girls want to be cricketers, one wants to be a marine biologist, another a space scientist, another a gymnast, but then they are children after all; they only demand what we demanded when we were kids – A little more TV time, some more play time, and of course, feed us desserts and some Maggi! You can catch all of those heartwarming clips on our social media handles! To all the kids out there, you are the future; the world is yours to conquer! A Happy Happy Children’s Day to every child out there!
That’s all for this week! Earnings season is over, but newsflow will ensure we are never starved of content. There’s a lot happening on the global front, and who knows what further twists lie in the Jensen Huang saga. Maybe Abbas-Mastan are watching this very closely! But we’ll be back as always on Saturday with the latest brew! Until then, so long and take good care of yourselves, and feed a piece of cake to your children!