News of the week summary - 24/05/2026

Nvidia reports $81 billion in revenue as AI spending accelerates

On Wednesday, Nvidia posted first-quarter fiscal 2027 results that beat Wall Street expectations by a margin that, for almost any other company, would be extraordinary: revenue of $81.6 billion against analyst forecasts of $78.9 billion, representing growth of 85 percent compared with the same quarter a year earlier. Earnings per share of $1.87 topped estimates of $1.76. Data centre revenue, the segment that captures AI infrastructure spending, reached $74.6 billion, up 88 percent year-on-year. The company guided second-quarter revenue to approximately $45 billion, absorbing an estimated $8 billion shortfall from export restrictions on certain chips sold into China.

To appreciate the scale of what Nvidia has become, it helps to note that its quarterly revenue now exceeds the full-year GDP of many mid-sized economies. What drives these numbers is the insatiable demand for computing power from companies training and running large AI models. Every major cloud provider, from Microsoft and Google to Amazon and Meta, is engaged in a capital expenditure race that shows no sign of slowing: each new generation of AI model requires substantially more processing power, and Nvidia's GPU architecture remains the dominant platform on which that processing runs. The company announced a 25-fold increase in its quarterly dividend, from $0.01 to $0.25 per share, alongside an $80 billion share buyback programme, signals that management views the current level of cash generation as sustainable rather than cyclical.

Markets responded cautiously. The stock declined slightly in the days after the announcement, a pattern that reflects how elevated expectations had become heading into the report. At these revenue levels and growth rates, even a strong beat can leave investors asking whether the pace can be maintained. The quarter ahead is also complicated by the China export restrictions, which will reduce near-term revenue from one of the world's largest technology markets. For the broader economy, the Nvidia results carry a specific implication: the companies building AI infrastructure are spending at a pace that is meaningfully supporting growth in the United States, even as the energy shock drags on other sectors.

SpaceX opens its books

On the same day Nvidia reported earnings, SpaceX filed its public S-1 registration statement with the Securities and Exchange Commission, the document that formally opens the path to an initial public offering and the first time in the company's 24-year history that its full financial statements have been made available to the public. The filing revealed 2025 revenue of $18.7 billion, with Starlink, the satellite internet service, accounting for roughly 61 percent of that total and growing rapidly. The company reported a net loss under accounting standards of nearly $5 billion for the year, reflecting heavy capital expenditure on the Starship programme and, following the February acquisition of xAI, on artificial intelligence infrastructure. Adjusted operating profit was substantially positive.

The S-1 targets a valuation of approximately $1.75 trillion. To put that in context: Alibaba's 2014 listing, long the largest IPO on record, raised $25 billion. SpaceX is targeting $75 billion, three times that figure. The filing draws investors not just on the strength of Starlink's subscriber growth, which passed 10.3 million active customers across 160 countries by early 2026, but on a forward-looking case built around orbital AI computing infrastructure. SpaceX describes plans to deploy AI compute satellites beginning as early as 2028, positioning the company at the intersection of the two dominant investment themes of the decade.

The S-1 is a disclosure document, not a verdict on valuation, and the pricing will come in the weeks ahead. But its publication this week set off a wave of analysis about a business that had long operated in the private markets, and confirmed that one of the most anticipated capital markets events in years was now formally under way.

Oil falls sharply as Iran talks advance

The week's most consequential development for the broader global economy may have been neither of the above. Oil prices tumbled more than 10 percent between Monday and Friday after reports that both sides in the Iran conflict had paused further military action, allowing more time for diplomatic negotiations to proceed. Brent crude fell toward $93 a barrel by the end of the week, having fallen close to 19 percent across May, the benchmark's worst monthly performance since the early months of the pandemic in 2020.

The mechanism is straightforward. Since late February, when the Strait of Hormuz effectively closed to normal commercial traffic, the disruption had removed roughly 20 million barrels of daily supply from global markets, sending Brent to a peak above $120 a barrel in March. Any credible progress toward reopening the strait translates directly into lower energy prices, lower inflation, and reduced pressure on central banks to tighten further. Equity markets took the oil move as an unambiguous positive: the S&P 500 continued its recovery from the March lows, and European indices also gained as investors priced in the possibility that the stagflationary impulse from energy costs could begin to fade.

The diplomatic picture remained complex and the strait remained largely closed at week's end, with significant obstacles still to be resolved. But the directional shift in oil prices was already doing economic work, providing early relief to households and businesses that had been absorbing elevated fuel costs for months.

UK inflation drops sharply, beating expectations

On Wednesday, the Office for National Statistics reported that UK consumer price inflation fell to 2.8 percent in April, down from 3.3 percent in March and meaningfully below the 3.0 percent that the Bank of England had projected in its April Monetary Policy Report. The main driver of the decline was a sharp fall in household energy bills, following the introduction of a new Ofgem energy price cap on April 1, which lowered electricity and gas costs relative to the same month a year earlier. That cap effect is temporary and will not repeat in subsequent months, but its immediate impact was to pull headline inflation back to a level that had not been seen since early 2025.

The reading provides a moment of respite in what remains a difficult inflation picture for the UK. The Bank of England expects CPI to rise again through the summer, as the energy cap effect fades and the pass-through from globally elevated oil prices feeds into transport and goods costs. The IMF revised its 2026 UK growth forecast upward this week to 1.0 percent, from 0.8 percent in April, citing resilience in consumer spending and services activity. But with inflation still above target and the Bank of England holding its policy rate at 3.75 percent, the April reading offered little room for complacency.