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If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 25,000 subscribers striving to be better investors with an edge in the market.
Every weekend we publish “The Weekly Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!
This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.
Grab your coffee and let’s dive in.
Market Talk
The major indexes all ended the week lower after Nvidia’s earnings and Friday’s PCE report.
3 Stories Moving the Market
These are some of the biggest stories from the second half of the week that had an influence on market action.
Nvidia earnings beat, but data center shortfall tempers excitement
Nvidia $NVDA ( ▼ 3.33% ) reported Q2 FY26 earnings that beat Wall Street expectations, with revenue rising 56% YoY to $46.7B and EPS of $1.05 topping estimates. Guidance for Q3 points to $54B in sales, keeping growth above 50% despite no China H20 shipments. However, data center revenue of $41.1B fell short of consensus for a second straight quarter, raising concerns about momentum even as Blackwell adoption accelerates.
🔑 Key Points
Revenue strength: Overall sales surged 56% YoY to $46.7B, Nvidia’s ninth straight quarter of 50%+ growth.
Data center miss: Segment revenue rose 56% to $41.1B but missed StreetAccount consensus, marking two consecutive shortfalls.
China H20 impact: No shipments in Q2, costing ~$8B in potential sales, though $180M inventory was sold outside China.
Blackwell ramp: Blackwell sales climbed 17% sequentially, reaching ~$27B and accounting for ~70% of data center revenue.
Capital return: Nvidia added $60B to its buyback program after repurchasing $9.7B in stock during the quarter.
👀 What You Need to Know
Nvidia is still growing at a remarkable 50%+ pace, but the back-to-back data center misses show the market’s expectations may be outpacing delivery. The absence of China H20 revenue highlights geopolitical risk, while Blackwell adoption confirms hyperscalers are still spending heavily. With $60B in new buybacks, Nvidia is signaling confidence, but sustaining this growth streak gets harder from here.
🔐 Edge Takeaway: Nvidia’s $41.1B Data Center sales came in a bit light vs. the ~$42B mark, but the bigger headline was.…upgrade to Edge+ to read the Full Edge Takeaway. Get 20% off today using our Labor Day Sale!
📊 Edge Score: Nvidia earns an Edge Score of 73 as fundamentals remain unmatched in AI infrastructure, but elevated valuation and geopolitical risks around China chip sales are sure to keep volatility front and center.
💪 CMG Strength: The ratio has been drifting sideways near its mean, reflecting cooling institutional momentum, especially after Nvidia’s post-earnings fade.
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Inflation Ticks Higher as Tariffs Bite Into Prices
The Fed’s preferred inflation gauge edged up in July, with core PCE rising to 2.9% year-over-year, its highest since February. Both monthly and annual readings landed right on consensus, reinforcing the view that tariffs imposed by President Trump are slowly feeding into consumer prices. Despite inflation staying above target, markets still expect the Fed to cut rates in September as labor market concerns take priority.
🔑 Key Points
Core PCE uptick: Core inflation rose 2.9% YoY, +0.1ppt from June, showing steady tariff-related pass-through into consumer prices.
Fed reaction: With inflation sticky but jobs weakening, Fed Governor Waller signaled openness to a September cut, possibly larger if data worsens.
Tariff drag: Trump’s 10% baseline tariff plus reciprocal duties and scrapped import exceptions are raising goods costs, while services drive inflation.
Spending resilience: Consumer spending grew 0.5% and incomes 0.4%, suggesting households are absorbing higher prices without curbing demand.
Energy vs services: Energy fell -2.7% YoY, food rose +1.9%, and services surged +3.6%, highlighting the Fed’s concern over persistent services inflation.
👀 What You Need to Know
This report reinforces the Fed’s policy bind: inflation remains above target, yet the labor market slowdown keeps pressure on policymakers to ease rates. Tariffs are pushing up goods prices, but the real problem is services inflation, which is proving sticky. For investors, the takeaway is that markets are betting on cuts in September, but any upside surprise in jobs or inflation data could shrink the Fed’s room to maneuver.
🔐 Edge Takeaway: Inflation is rising as Trump’s tariffs are lifting costs, but the Fed’s problem is…upgrade to Edge+ to read the Full Edge Takeaway.
📚 Edge-ucation: What is the PCE report (and why it matters)?
The Personal Consumption Expenditures (PCE) Price Index tracks how much Americans spend and how fast those prices are rising. It’s the Federal Reserve’s preferred inflation gauge, viewed as more comprehensive and flexible than CPI.
Core focus: The Fed prioritizes core PCE (excluding food and energy) since it better reflects underlying inflation trends.
Broader scope: PCE covers a wider basket than CPI, including healthcare and services often paid indirectly.
Dynamic weights: It adjusts for shifts in consumer habits (substitutions), making it more reflective of real-world spending patterns.
Market impact: PCE results directly influence Fed rate decisions, bond yields, and equity risk sentiment—especially when inflation deviates from the 2% target.
PCE directly shapes expectations for Fed cuts or hikes, making it one of the most market-moving reports each month.
Alibaba beats profit expectations as cloud and AI drive growth, announces new AI chip
Alibaba $BABA ( ▲ 12.91% ) posted stronger-than-expected profits in its June quarter, lifted by accelerating cloud demand and signs of recovery in its e-commerce unit. Net income surged 78% to $6.0B, well above forecasts, though revenue of $34.6B fell short of estimates. Gains were aided by investment disposals, but underlying profits slipped as Alibaba doubled down on China’s instant-commerce wars.
🔑 Key Points
Revenue Miss: Sales rose 2% YoY to $34.6B, below analyst estimates of $35.3B, highlighting slower consumer growth.
Profit Boost: Net income climbed 78% YoY to $6.0B on investment gains, but core profits fell 18% excluding disposals.
Cloud Momentum: Cloud revenue surged 26% YoY to $4.7B, with AI-related products delivering triple-digit growth for an 8th straight quarter.
E-Commerce Mixed: Core commerce revenue rose 10% to $2.7B, but adjusted earnings dropped 21% amid heavy instant-commerce spending.
AI & Chips: Alibaba unveiled a new AI inference chip built in China, part of Beijing’s push to reduce reliance on Nvidia and U.S. tech.
👀 What You Need to Know
Alibaba is balancing aggressive bets on cloud AI and instant commerce against weaker consumer spending and regulatory crosscurrents. The cloud unit is showing the kind of AI-driven acceleration investors want, with management prioritizing growth over margins. But profit quality remains in question as equity gains and asset sales mask weaker operating income. Meanwhile, China’s AI chip race underscores Alibaba’s role as both a tech innovator and a policy instrument, which adds long-term potential but also political risk.
🔐 Edge Takeaway: Alibaba’s launch of a domestically manufactured AI chip is a pivotal moment in China’s semiconductor strategy. For U.S. investors, the.…upgrade to Edge+ to read the Full Edge Takeaway.
In Other News
In this section, we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.
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Edge+ Posts of the Week
We continue to push out more and more content every week to give investors that edge. Here are the posts Investor’s Edge+ subscribers received this week.
The Edge Report
Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even share a sneak peek into our systems and models. This week we discussed the upcoming Nvidia earnings and the all-important PCE report. See the latest full report here:
Weekly Options Recap
This report is a breakdown of every options trade we made this week—what we opened, what we closed, and how our open trades are performing. Each edition gives you full transparency on our strategy, including entry points, premiums collected or paid, trade rationale, and risk/reward setups. See this week’s recap:
The Week Ahead
Next week may be a holiday shortened week, but there are still several reports that we, along with the entire market, will be watching.
Earnings Reports
Earnings season is coming to an end but there are still some companies that we cover left to report. Here is the list of names we will be covering next week:
Monday 9/1: --
Tuesday 9/2: --
Wednesday 9/3: Salesforce and Dollar Tree
Thursday 9/4: Broadcom and Lululemon
Friday 9/5: --
Here is the full calendar of scheduled earnings releases:
Source: Earnings Whispers
Economic Reports
Next week is all about the labor market with all eyes on Friday’s nonfarm payrolls report.
We also get initial jobless claims, JOLTS job openings, ADP employment, and key PMI data.
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Thank you for reading this edition of the Weekly Wrap-Up. Have a great weekend!
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Mark & Chris
The Investor’s Edge
Disclosure
This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
