The latest look at Nvidia (NVDA)... Analyzing its earnings report... Meta makes a big deal... Why sports are a 'scarce asset'... The next booming addiction... A new way to play...
The AI boom – or bubble – isn't popping yet...
After yesterday's close, industry bellwether Nvidia (NVDA) – the backbone of much of the AI boom – reported another round of quarterly earnings and revenue that beat Wall Street expectations.
Revenue for the second quarter increased 106% year over year. And on an earnings call with analysts, Nvidia Chief Financial Officer Colette Kress said revenue is forecast to grow 70% in the next fiscal year ending in January 2028.
The stock surged roughly 9% today, toward a record high, and traded at a $5.5 trillion market cap... and other AI plays enjoyed a lift.
For example, Salesforce (CRM) and CrowdStrike (CRWD) were up more than 20% today, after citing demand growth in their earnings reports yesterday.
The tech sector of the S&P 500 Index was up 3.2% today, while the other 10 major sectors were down. It was enough for a nearly 1% overall gain in the U.S. benchmark, and a 1.5% gain in the Nasdaq Composite Index.
Stansberry's Investment Advisory editor Whitney Tilson published a detailed analysis of Nvidia's earnings report in his daily e-letter today.
As he explained, it wasn't necessarily a "blowout" report, nor one without questions. Nvidia CEO Jensen Huang said the company "never" forecasts revenue a year out but is doing so to indicate long-term demand.
That 70% number is well above previous expectations of 45%, which is impressive. But the mechanics of the math, rooted in future "commitments," make for high expectations that could become a liability "if (or when) the AI bubble bursts," as Whitney wrote.
Check out Whitney's full analysis here.
Elsewhere, Meta Platforms has agreed to a deal...
In March, a Los Angeles jury found Meta Platforms (META) and Alphabet (GOOGL) negligent in a case of a 20-year-old woman blaming the companies for her depression and anxiety.
She was 6 years old when she started watching YouTube and 11 when she joined Instagram, which is owned by Meta.
The award was for $6 million – relative pennies for a big tech company. But it was the first time a jury treated social media apps as a "defective product" – specifically as something built deliberately to exploit the way young brains work. And it opened the door for more legal action.
This month, 29 state attorneys general tried another, larger case against Meta in federal court. And, yesterday, Meta made a deal...
The company agreed to pay up to $18 billion to settle claims that it built Facebook and Instagram to keep kids hooked, while sitting on knowledge about damage to their health. It's the largest penalty ever levied against a social media company.
Meta admitted no formal wrongdoing, but the deal comes with promises that suggest otherwise.
Going forward, Meta says users aged 13 to 17 will get a default two-hour daily limit across both apps. The apps will go dark from midnight to 6 a.m. under a new "night mode," and a "school mode" silences notifications during class. "Like" counts and "beauty" filters will also get switched off.
Adults are the only ones who can undo any of this. Meta has until late February to have everything up and running, and there will be accountability in the form of an independent auditor who gets to check the work, monitored by the states.
The devil is in the details, however...
Only about $12.7 billion of this $18 billion is guaranteed. The remainder would be paid out by Meta if the company's competitors, TikTok and YouTube, each pay an additional $6 billion and adopt similar rules. Neither has plans to do that right now. Plus, all of this assumes Meta knows which of its users are teenagers.
It doesn't, at least not reliably. The company has committed to better age detection (aided by AI) and audits of how well that might work. But if kids or teenagers are using adult accounts (by, say, signing up with an adult birthday, which isn't that hard), none of this plan is enforceable.
Meta's own preferred solution is to make Apple (AAPL) and Alphabet vigorously verify ages in their app stores, but neither does.
Then there's the math...
Meta trades at nearly a $1.5 trillion market cap.
The company warned Wall Street that losing to just four of these attorneys general could cost it more than $1 trillion. Instead, it's "getting off easy" by paying $18 billion at most – and not all at once. The money is set to be paid over 10 years.
As for how much business is actually at stake, nobody outside Meta knows, but it's probably not as bad as it could be.
Some analysts say Meta generates more than $10 billion in revenue from minors. But Citi says teens are less than 1% of the top line, and points out that the average teen spends about an hour a day on Instagram, half of what the new limit allows.
Wall Street appears to understand this math, as shares of Meta finished yesterday up about 1% and were down only slightly today.
Speaking of addictive products...
As our colleague Sean Michael Cummings wrote in an issue of the DailyWealth e-letter earlier this month, sports franchises – and by extension the games they play and media rights they command – have become "scarce assets."
Sean pointed to the proposed sale earlier this month of the Los Angeles Lakers at a $12.5 billion valuation, up from $10 billion when it was sold 10 months earlier. As he explained...
Traditionally, sports teams were bought by billionaires who kept them as trophy assets. Teams were status symbols... And the wealthy would pass ownership down through the family for generations.
But a new kind of buyer has flooded into this space: private equity.
Last December, the NBA changed its rules to allow investment firms to buy equity in up to eight franchises – a jump from the previous limit of five.
At the same time, AI has revealed something important about major-league sports teams: They're scarce assets.
The drama and excitement of a pro sports event cannot be replicated by technology. As Sportico recently reported, that's a rare quality in a world where AI is recreating all kinds of content. And it has made sports teams look like a reliable way to make money.
These two factors have propelled team values to surprising heights. Take a look at the biggest sports-team sales since 1989...
Now, depending on the sport and the market, some teams generate more or less revenue, and some even lose money from gameday operations if there aren't enough butts in seats. But the valuations of teams across all the major sports leagues keep going up.
Part of the reason is the money the leagues and teams get from massive media rights deals with companies that see value in live content. Another factor is the increasing demand for sports betting since it has become legal in person and online in locales well beyond Las Vegas.
The newest way to 'play'...
Sports betting could soon be coming to futures markets...
Three firms have filed prospectuses to track National Hockey League ("NHL") teams in exchange-traded funds ("ETFs"). But the funds won't be based on exposure to the value of the teams or the league. No, they're pure speculation – with values tied to futures contracts and a convoluted measure of performance by the teams.
Volatility Shares filed a prospectus on August 14, and Roundhill Investments followed a week later. Then a startup ETF issuer called LeagueShares one-upped them on Tuesday with fund versions carrying 2X daily leverage.
Basically, every NHL team would open each season at 7,500 points. A team's index would then score what actually happens on the ice. A shutout adds 50 points, for example. A player being ejected subtracts 10 points, and so on, with values tied to other important statistics.
Maybe there's a market for this, maybe not...
Volatility Shares says in its own prospectus that the action will be "dominated by retail speculators."
As someone who has watched, played, and covered sports for decades, I know there's too much randomness in the games for me to ever want to participate, though I am tempted to gamble a paltry sum on a New York Islanders fund (I'm a fan).
But we'll have to wait and see how these futures contracts play out if, or when, they go live under the CME Group's umbrella. It could happen as soon as October, according to ETF.com – just in time for the early part of the NHL season. And regulators don't appear set to step in the way.
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New 52-week highs (as of 8/26/26): Abercrombie & Fitch (ANF), Alpha Architect 1-3 Month Box Fund (BOXX), Quest Diagnostics (DGX), Global X MSCI Greece Fund (GREK), IQVIA (IQV), Plains All American Pipeline (PAA), Invesco High Yield Equity Dividend Achievers Fund (PEY), and Union Pacific (UNP).
In today's mailbag, thoughts on the U.S. government draining the Strategic Petroleum Reserve ("SPR"), which we wrote about earlier this week... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"We have idiots in our central government who can't see the forest for the trees! For years thru at least two administrations we have been draining the U.S. gas tank.
"The SPR is exactly that. A reserve for EMERGENCY USE ONLY, NOT for political posturing to soften up the harsh realities of stupid policy decisions. Biden started draining the tank years ago. And never put in place a plan to fill it back up at LOW PRICES!
"Now here we are again in a squeeze and we are draining it some more and we can't fill it up because the price is ridiculous. Holy crap, politicians, stop screwing with the U.S. GAS TANK!!" – Subscriber Jon M.
All the best,
Corey McLaughlin
Baltimore, Maryland
August 27, 2026
