US stocks were mostly quiet Wednesday as investors waited on Nvidia's results and fresh inflation data. The Dow slipped 0.2%, while the S&P 500 and Nasdaq hovered near the flat line.

Then Nvidia delivered another monster quarter. Revenue hit $96.2 billion, above expectations, and the company raised its forecast again. Yet shares fell after hours, showing just how high the bar has become for the AI trade.

Meanwhile, Meta put a massive legal battle behind it, Anthropic locked in another huge chunk of computing power, and Abercrombie showed the consumer still has some firepower.

Today:

📰 Nvidia beats again. Shares fall.
🤖 Anthropic's $45 billion AI bet
⚖️ Meta settles a massive legal fight

Let's get started.

This is not financial advice. Always do your own research. Past performance doesn’t guarantee future results.

Meta agreed to pay $17 billion to settle state lawsuits over child safety and implement stronger teen protections. The settlement removes regulatory uncertainty that's been weighing on the stock. That matters more than the dollar amount.

Before this, every earnings call meant legal risk overhead. Now it's priced in. For Meta, $17 billion is 5-6% of annual revenue. Manageable. The real benefit: regulatory clarity lets the platform focus on what it does best: monetizing attention at scale.

Meta's competitive advantage hasn't changed. Network effects still drive user growth. Two billion users create an ad platform nobody else can match. Regulatory compliance is just a new cost line in an otherwise dominant business. Snapchat and TikTok will face similar scrutiny. Meta can absorb it better because of scale.

The operational changes (teen safety features) cost money but don't disrupt the core business model. Ad targeting still works. User engagement still compounds. The platform is still where advertisers need to be.

Regulatory clarity enables growth, not just survival. Meta moves forward with known constraints and continues leveraging its network advantage. The settlement closes a chapter so the next one can begin.

Sponsored by Frontieras

US stocks traded mixed Wednesday as investors waited for Nvidia's after-hours earnings report and digested fresh inflation data ahead of the Fed's Jackson Hole gathering.

Nvidia beat Wall Street expectations on both revenue and earnings, reporting adjusted EPS of $2.22 on revenue of $96.2 billion for Q2. Analysts had projected $2.09 and $92.3 billion, respectively. The company also guided Q3 revenue between $105.8 billion and $110.1 billion. Data Center revenue came in at $89 billion versus expectations of $85.8 billion, while Edge Computing brought in $7.2 billion against forecasts of $6.6 billion. Despite the beat-and-raise, shares fell more than 2% in after-hours trading as investors continue to question whether companies will see returns on their massive AI investments.

Anthropic struck a roughly $45 billion cloud deal with Nscale, the UK-based AI infrastructure company, CNBC confirmed. Anthropic will rent around 460 megawatts of compute capacity at an Nscale data center development in West Virginia, leveraging Nvidia's advanced Vera Rubin chips when the facility comes online at the end of 2027. The deal is part of a flurry of infrastructure agreements Anthropic has announced this year as growing demand for its Claude AI models caused what the company called "inevitable strain" on its systems. Anthropic confidentially filed its IPO prospectus in June and has been meeting with prospective investors ahead of a public offering that would need to justify its $965 billion valuation.

Up to half of proposed US data centers face delays or cancellation, according to investment firm Kimmeridge Energy Management. Ben Dell, the firm's managing partner, blamed political backlash and physical infrastructure constraints, saying "the sort of Silicon Valley model is running into a real-world infrastructure constraint." He estimated that of roughly 30 billion cubic feet a day of expected US gas demand growth, data centers might account for 5 billion to 10 billion, with delays pushing that toward the lower end. More than 500 US jurisdictions now restrict data centers, with New York freezing environmental permits and Texas halting approvals pending audits.

Core PCE inflation held steady at 3.3% in July, matching expectations and unchanged from the month before. The reading on the Fed's preferred inflation gauge comes ahead of the Jackson Hole annual gathering, where Chairman Kevin Warsh will deliver a speech on the central bank's future plans. Bond markets remain on edge as investors try to gauge when the Fed might shift its policy stance.

Abercrombie & Fitch stock surged 35% after the retailer posted earnings Wednesday morning and raised its guidance. The strong results suggest the American consumer remains resilient heading into the back half of the year.

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Cheers,
Brandon & Blake of Invested Inc