Hey there, finance enthusiast!

Nvidia’s latest earnings have confirmed a robust appetite for AI solutions. But DataPelago is emerging as a worthy competitor, presenting investors with a new player in the chip sector.

Will DataPelago’s hardware-agnostic approach disrupt the Nvidia stronghold, or will geopolitical factors play a more critical role in shaping the future of AI infrastructure? These factors require investors to monitor evolving market dynamics.

In today’s financial recap:

  • Nvidia’s AI Earnings & Emerging Rival Shake Up Chip Sector

  • Ethereum: Wall Street’s New Stablecoin Darling

  • M0 Raises $40M to Disrupt Stablecoin Issuance

  • US GDP Beats Expectations; Fed Turmoil and Rate Cut Odds Intensify

Nvidia’s AI Earnings & Emerging Rival Shake Up Chip Sector

The TradeWatch: Nvidia’s Q2 earnings confirm strong AI demand despite China uncertainties, but DataPelago’s new universal engine is emerging as significant competition, outperforming Nvidia’s GPU libraries and signaling a crucial shift in AI infrastructure.

Unpacked:

  • Nvidia shares dipped despite solid earnings, as data center sales slightly missed expectations, leading some investors to take profits after the stock’s significant gains this year.

  • DataPelago’s Nucleus engine outperformed Nvidia’s cuDF by up to 38.6x in string-heavy hash join tests, offering hardware-neutral operation across CPUs and GPUs without code changes.

  • China’s push for AI chip self-reliance adds geopolitical complexity for Nvidia, as detailed in a report by Tufts Fletcher School, impacting its sales outlook and market strategy; Nvidia stock falls after data center sales miss forecasts.

Bottom line: Nvidia remains a key player in the AI landscape, but faces growing competition and geopolitical pressures that require investors to monitor evolving market dynamics and potential alternatives. The rise of software-first solutions like DataPelago’s Nucleus could reshape AI infrastructure economics by improving performance metrics and reducing vendor lock-in.

Ethereum: Wall Street’s New Stablecoin Darling

The TradeWatch: Ethereum is solidifying its position as the primary blockchain for stablecoins and smart contracts, attracting significant institutional interest and ETF inflows, as highlighted by investment firm VanEck.

Unpacked:

  • Ethereum’s blockchain maintains a dominant market share in DeFi, commanding 61% of the total value locked at $95 billion.

  • Veteran investor Jan van Eck says Wall Street CTOs are going to embrace Ethereum to build stablecoin infrastructure.

  • VanEck’s Ethereum exchange-traded fund (ETF) has seen substantial growth, increasing 81% quarter-to-date.

Bottom line: Ethereum’s traction with stablecoins signifies a pivotal shift in blockchain-based finance, bolstered by growing institutional investment. This increasing adoption means Ethereum could become a cornerstone of digital asset strategies for forward-looking investors.

M0 Raises $40M to Disrupt Stablecoin Issuance

The TradeWatch: Switzerland-based M0 secured $40 million in Series B funding to shake up stablecoin issuance by empowering developers with more control over digital asset creation. This investment signals a pivotal shift in stablecoin infrastructure and the evolution of fintech capital flows.

Unpacked:

  • M0’s Series B round included participation from Polychain Capital, Ribbit Capital, and the Endeavor Catalyst fund, bringing its total funding to $100 million since its establishment in 2023.

  • M0 aims to separate stablecoin reserve management from programmability, enabling regulated entities to manage assets like cash and U.S. Treasuries, while developers define who can create, hold, and move the assets.

  • The platform surpassed $300 million in aggregate supply in July and will support the launch of MetaMask’s mUSD stablecoin, which Decrypt noted will debut on Ethereum and Linea later this year.

Bottom line: M0’s innovative approach to stablecoins could foster more tailored and application-specific digital assets. This funding highlights growing interest in platforms that give builders greater control over stablecoin infrastructure.

US GDP Beats Expectations; Fed Turmoil and Rate Cut Odds Intensify

The TradeWatch: The US economy’s revised Q2 GDP growth of 3.3% surpasses expectations, fueling market speculation for an imminent Fed rate cut amid ongoing political uncertainty linked to President Trump’s unprecedented firing of Fed Governor Lisa Cook.

Unpacked:

  • The US economy grew faster than expected in Q2 2025, with GDP expanding by 3.3%, exceeding both the preliminary estimate of 3.0% and market expectations of 3.1%.

  • Political turmoil increased after President Trump removed Lisa Cook from the Fed’s board, raising concerns over the central bank’s independence and the potential for heavy interest rate cuts.

  • Traders are pricing in high odds for a rate cut at the Fed’s September meeting, with the CME FedWatch tool indicating an 87% chance of at least a quarter-point cut.

Bottom line: The better-than-expected GDP has been overshadowed by political tension, making more traders expect a rate cut to appear at the Fed’s September meeting. These dynamics are creating uncertainty and volatility in currency markets as traders react to economic data alongside central bank actions.

The Shortlist

  • Market expects weaker stocks in September – Historically the worst month for returns, but is it really that scary following the prior months’ returns?.

  • China plans tripled AI chip output – Amidst competition with the US and its continued efforts to be on the forefront of technology self-reliance.

Cheers,

— Michael & the TradeWatch.io editorial team