UK PM Rishi Sunak Announces General Election & Nvidia's AI Boom Continues

Hello and welcome back to the Market Maker podcast by AmplifyMe, where I am joined by our co-founder Piers Curran to talk about some of the major headlines in markets this week. And 3 things really we're going to talk about. Number 1, a UK general election has been triggered by Rishi Sunak. It's going to happen on the 4th, 4th of July. And so We'll go into what was the rationale for that. He didn't have to call it so early. In fact, he could have waited to January. So we'll go through a few points of the reasons why his strategists might have thought it's now or never for the UK Prime Minister. Also, we'll talk about UK CPI that came out earlier in the week, saw a big drop, but services inflation is still up. And also the expected rate cut that markets are anticipating in June has now been largely taken off the table. So we'll dive into that report and look how the markets reacted and Piers's thoughts about UK rates going forward. And then finally, last night, fresh off the press, Nvidia shares have topped $1,000 for the first time in extended trade last night. I think they rose about 6% in aftermarket hours. So from memory now, this is two back-to-back quarter earnings releases where the Markets have kind of thought, well, the bar is exceptionally high. And then here we stand the morning after, and, uh, we're feeling quite joyous from our hangover of Nvidia. Um, so we'll look at what exactly happened there and some of the challenges which Nvidia faces now going further forward with the rollout of some of its new hardware anticipated. But yeah, Piers, first take then on on Rishi Sunak stood in the rain yesterday announcing a general election?

Uh, it's like, what? Why? What? Why call election? Why stand in the rain to announce it?

Just to be clear, so when stuff like that happens, and if you haven't seen it, have a look on YouTube, the guy is getting absolutely soaked. And because he wears that kind of suit with the sheen finish, it's all shining. Uh, but someone would have told him to do that, right?

Well, it's— what is this, a labor mole inside the, uh, advisory team to Rishi to try and lay out as many banana skins as possible? I mean, crazy. And look, very, uh, you know, sums up his premiership, really, doesn't it? Um, yeah, I mean, I'm interested in your thoughts on this, to be honest. I mean, why, why now? Why go, why go now when he could have waited until, as you say, till, till January next year? So what's the rationale here?

Yeah, so I think you can break it down very simply to 4, 4 key areas. Number one is the economy. The economy is always super important for any Western democracy. And if you go back and look through patterns of political change of power, you typically tend to see the economy leads that. And so you can imagine people are more than willing to buy into a political agenda until the point of which their lives are actually tangibly challenged, they become more difficult. And then that typically then starts to see an economic downturn, higher unemployment, and then generally, yes, a shift in sentiment because people want change. They want a better outlook for their future. So the economy is really important. And in that perspective, kind of two things really have happened. And I know we're going to talk about inflation in a lot more detail because there's a lot more of a, market spin that I think is very important for us to cover. But from the optics politically, it happened. I mean, he announced it at 5 PM, UK inflation data came out at 7 AM on the same day.

Yeah.

And that UK inflation figure dropped very dramatically, which there was a very good reason, which I know you'll go on to tell us about shortly. But UK inflation dropped to its lowest level in nearly 3 years. And obviously inflation has been one of those words I think that the general has penetrated the psyche of the normal citizen of Britain because of the cost of living crisis. Everyone has felt that in the post-COVID, Russian Ukraine price shock that we had. So inflation is something which before I don't think people would've been that plugged into, but I think most people of Britain are quite sensitive to having an understanding of that. And so that number falling to 2.3%, that being there or thereabouts back to Bank of England target. Remember inflation was up near 11%. Did we breach 11% at the time? Trying to remember.

Yeah, just, I think I'll fact check that.

So we've gone from like 11 to 2. And so obviously he can play that narrative that under his stewardship of a less volatile premiership Truss and Johnson, he's led to this, even though we know that it doesn't quite really lend its hand to his doing. But nonetheless, so he's got the inflation argument. The other one is the British economy actually grew in the first period of this, this year. So in Q1, UK economy expanded 0.2% year over year for the first few months of the year. And that was, remember, recovering. It had declined 0.2% at the end of last year, and expectations were that we were just going to basically flatline, and it actually grew. So you've got falling inflation and a growing economy. And so I think that is a key trigger for the timing, and that will lead us on to point 2. Point 2 is the polls really haven't moved. I mean, they've gone for different strategies, NI cuts and things like this. It hasn't moved the dial at all in terms of the opinion polls. And just to give you a bit of context, they're down more than 20 points in the opinion polls, the Conservatives. We're basically at the same level. I can't believe this. We're at the same level we were when, in terms of popularity, as to the Liz Truss, what, 20-day government or however long that she run. So It's quite unbelievable because you think that it was quite a messy show, that period between Johnson and Truss and then Rishi coming in. And yet the favourability of the Conservative Party has not shifted at all. It's exactly where it was. So one thing I did see is that the odds of a Tory win in 6 weeks' time were 25 to 1. Quite fancy that. If I can get in at 25 to 1, I'll sell you 10 to 1 in about 2 weeks' time.

Wow, 25 to 1 in basically a 2-horse race.

That's, uh, it's a bit tasty, isn't it?

That is actually a bit tasty. I mean, you'll lose your money, but yeah, I'll take that though.

And yeah, if I could sell that, that's going to narrow. So yeah, for anyone who's not lived through, uh, I guess a lot of our listeners have a demographic, if you haven't gone through these kind of election cycles, In Britain, every, well, I say every 5 years, it might not work out that exact, uh, given the amount of turmoil there's been. But generally, you do see a little bit of convergence in the polls going into D-Day because people get a little bit nervous. Nothing's ever a conclusive done deal until it's done. And so you tend to see some slight narrowing. So, well, nothing's impossible. The skeletons on Starmer might come out, Piers.

Don't count your chickens yet. Well, I mean, so maybe, I mean, now you mentioned that. I mean, look, can I push back on your economic argument here?

Yeah.

So your argument is that now's the time to pull the trigger because the UK economy has grown last quarter. And so, right, this is as good as it's going to get from the economic story point of view. So let's go for it. I mean, I actually think I mean, you quoted there the year-on-year GDP figures, right? So in Q1 of 2024, the economy grew, was 0.2% larger than it was 12 months prior. Right. But kind of in that 12-month period, we've had a recession, very mild recession. But if you look at the quarter-on-quarter growth rates, then actually in Q1 of 2024, the economy grew at 0.6%. So it was 0.6% larger than Q4 of last year. The point is that's actually the large, the fastest quarterly growth rate since Q4 of 2021. I mean, I would actually, I mean, if, I mean, what do I know? But if I was to put my economic sort of forecast thesis, I would say actually things are starting to get better and there might even be a bit of momentum behind this UK economic growth story as we go through this year. It's almost like they've just— it's a bit like trading, right? If you're in a trade and it's offside and you're losing money and you're losing money and you're losing money and you're like, ah, damn it. And I don't want to cut the trade because I'll have to realize my loss, and that's painful. There's classic psychology error here. But, but what anybody in a losing trade, all they want is to see that trade get back to break even, and then they're out, and it's relief. Oh, I haven't lost anything. Failing to realize that it's back to break even because the momentum's now changed and the trend's now on the upside. And actually, if they just hang on, they're probably now going to see the benefits of that patience, right?

I think, I think that, I think that argument holds true in the sense of when you set up a trade, it's based on the thesis of what information you have there. And then unless the narrative changes, then your, your thesis is still intact and you can hold the trade to see it through to its fruition.

Yeah.

I think the problem you have here is politics is all about momentum and the fact that they don't have budget room, which is another classic political strategy, which is you drop some sort of promise of more favorable taxes and things like that, then they can't afford to do that.

But this is my argument. So look, let's say they've been flip-flopping on shall we do more tax cuts or not? Right. And Hunt, as the Chancellor, is pretty disciplined. And so he slid through some cuts end of last year. They were hoping for some more this year. And it's like, At the moment, they're like, actually, we may not be able to deliver any more cuts. And so you're right. That's one argument as to why he's pulled the trigger. If we haven't got any giveaways this autumn, there's no point waiting until the autumn because I guess their plan was tax giveaways in the autumn and then let's have an election on the coattails of that positive news. Right. But now that positive news isn't coming. But I would argue If, and I know it's a risk and it's uncertain, but if the economic momentum builds, well, maybe actually in 6 months' time there will be some room for some tasty little tax cuts if the economy outperforms. It's like, all I'm saying is going now when at the opinion polls, they're the widest they've ever been, it's basically cementing a loss. Whereas if you wait 6 months, you never know. Look, I'm not saying, likelihood is it'll be the same situation, but you never know. Right.

If the economy improves, as you say.

Yeah.

So at the moment, we can look at inflation in a second, but let's say inflation, what does that mean for then the Bank of England cut? Surely the Bank of England cut gets delayed even further.

Yeah.

And so therefore you don't have that as another— let's remove the economics because people generally on the street won't be looking at it from that way. They will be looking at it in the one-dimensional light of interest rate cuts are good for me.

Yeah.

That's how they'll see it. And so you are not going to get those cuts if the economy continues to outperform.

But look at what's happened in the US, right? I mean, this is the most unusual economic cycle in living memory. And in the US, then what's happened there? Well, we were expecting inflation to drop and then to start cutting rates. But actually, the economy has been so strong, inflation hasn't dropped, and they haven't been able to cut rates. And actually, what's the wind-up of all of that? Well, actually, consumer confidence is building. The economy's strong. I'm just saying, can't the economic growth story be positive enough for it to counterbalance that disappointment of no rate cuts? I don't know. Just saying. I'm just saying, if I was Rishi, I would not have pulled the trigger now. I just think, well, unless he's just had enough. I mean, there are arguments about the internal Yeah, sort of dynamics of the party are pretty fractious. And so it may be he's just had enough and he's just right in protest against the far right, the Conservative Party. He's like, sod you lot.

Yeah, I do think that's, I do think that's a genuine piece of the puzzle because apparently reading all the news articles this morning, no one knew about this.

Yeah.

Even the Chancellor didn't know about this.

Right.

David Cameron was abroad, had to fly back that day. Like I think that's a big part of it. It's self-preservation. And I think he has to, you know, I was saying to you before, I think it's been a bit quiet in terms of attacks on the PM from internals. And so that always happens because if you think that, so let's say all goes as planned, the Conservative Party are going to lose. He needs to step aside. There needs to become a new opposition leader of the Conservative Party. If it all goes to plan. Yeah. So then it's about raising your voice, creating more, um, issues, which is only gonna scalpel further your likelihood of winning the election. So while that's fairly settled, then go now and don't give them time because you are gonna dominate the airwaves. 'Cause already he's gonna be on the pedestal every single day barking his tune now, and there's no room for anything else. So I think there's a little bit of that for sure. A couple of final points then. So a few things about the polls just to wrap. So there's kind of two points here of which don't look good for Rishi. So I'll play on your side for a moment. Labour hopes to gain seats from basically a crisis that's going on at the SNP in Scotland.

Yeah.

And the Conservatives across England and Wales. The second is the Lib Dems. So if you've seen any of the, uh, certainly in the Southeast, I think it's probably more, more prominent, but the Lib Dems are a serious challenge to some of the southern heartlands, essentially. So you've got Labour grabbing some of those areas, uh, in Scotland and elsewhere from the Tories. And we've seen that some of those areas in Northeast as well flip. And then you get the Lib Dems coming in, sweeping up some of the southern heartlands, which would've been usually bankable for the Tories. And then you've got your buddy Farage piping up with the Reform Party. Uh, he could also snag a couple, uh, votes from the Conservatives as well. So yeah, that hence the bloodbath that's expected, uh, at this point. Um, but yeah, I mean, that's pretty much the summation of it really.

Um, but from a market's perspective, Yeah, well, I mean, well, firstly, let's talk about yesterday. So if I, if I'm just using like the FTSE 100 as a sort of, uh, proxy to this, well then, yeah, it kind of reacted negatively. I mean, I, I mean, I don't know if it's hard to say if it's a genuine straight-out reaction to to Rishi Sunak. I think it's way more about the inflation data, which is what kind of really led to stocks going lower. You know, you asked me in our kind of— we were messaging yesterday and you were saying, right, yeah, maybe we could talk about what a Labour win might mean for markets. And I was like, I don't know. I mean, does it mean anything? I mean, historically, normally, like, go back through the years, right? A Conservative Party would be more pro-business, right? And a Labour Party would be more anti-business, just from the kind of conventional left versus right policies around tax and so on. But that's all. They're basically both Well, Starmer's taken over the middle ground and Rishi's been forced right by the right wing, the hard right wing of the Conservative Party. So Starmer's really in the middle. He's trying to paint himself as pro-business, which is just amusing from a Labour point of view. But I mean, I don't know, does it matter? Does anybody care?

That's the normal discourse from going from a more left-leaning Corbyn government to pull back small centre-left, right? Yeah.

So, yeah, Starmer versus Corbyn as to, well, of course, Starmer's way more pro-markets, pro-business than Corbyn was, of course. So, look, I don't know. I mean, it's, Starmer's better than Rishi, but so maybe it's a positive, but I don't think anyone cares, to be honest.

Well, I was having a quick look on the 6 policy priorities from the Labour Party on financial services.

Okay, specifically.

So maybe this gives us a bit more of a, a structure as to an insight as to their plans. So number 1, deliver inclusive growth of the UK's financial services sector by scaling regional financial centres. Yeah, Conservatives tried that, but number 2, enhance the international competitiveness, competitiveness of the UK's financial services sector by pursuing a more joined-up and innovation-centred approach to regulation and supervision. Like the sound of that.

Does that mean more regulation or less?

So streamlining the regulatory rulebook in line with the Consumer Duty, strengthening our international engagement in financial services, and building a more collaborative relationship with the EU.

Okay. Yeah. All right. Well, that, yeah. Fair.

Number 3, reinforce consumer protection and financial inclusion, exploring alternative models for increasing financial resilience, including longer-term fixed-rate mortgages, adopting a coordinated cross-sectoral approach to fraud. And the other stuff's quite boring.

Yeah.

Number 4, the other stuff.

Yeah.

Sorry, sorry to the poor team that put that together. I hope they're not listening. Point number 4, Lead the world in sustainable finance, making the UK a global hub for green finance activity. Embrace innovation and fintech as the future of financial services. Global standard setter for the use of AI in financial services, delivering the next phase of open banking and the roadmap to open finance.

It's good.

It's good. It's good. It's good. Nice pitching. I'm not sure.

There's no numbers. There's a lot of nice buzzwords in there. As long as you get AI in there. And that's all that matters.

The last one was reinvigorate our capital markets by reviewing the pensions and retirement savings landscape, um, greater consolidation of all type schemes, empowering the British Business Bank to invest more in growth capital, um, establishing a TB scheme, TIBI, to increase institutional investment into venture capital. And small-cap growth equity and increasing investment in infrastructure and green industries. This doesn't sound very Labour-like, does it?

Well, no, exactly. That's my point. That last one sounds actually the best of all. But, um, but yeah, I mean, I think that ultimately it's still going to be the, the economy will do its thing. I mean, whether, you know, when Starmer wins, I don't think the direction of the UK economy is going to change at all. I think it will continue on where it was heading anyway. And so ultimately, I think from a market's point of view, you know, ultimately that's what's gonna be the driving force, um, rather than the election result, which everyone already knows.

Okay, so let's talk UK inflation. So it dropped, it dropped sharply but less sharply than the markets were expecting. So tell me a little bit about what you saw.

Well, on the face of it, it sounds like remarkable, um, because it was at 3.2% in March and it dropped to 2.3%. So big, big drop, um, except that that was entirely expected. And it was entirely expected because it just so happened that the, um, the, the kind of cap the regulated energy price cap was cut by 12%. Okay, and that we knew that was happening. So we knew in April that that cap was being cut by a huge amount. And because energy is a huge portion of the inflation basket, it was for sure nailed on we'd get a big drop in inflation because of that. Now, actually, the drop was not as big as expected. So that's the kind of first point. So it came in at 2.3%. Analysts had expected a drop to 2.1%.

Yeah, because you'd see that, that headline thinking about the energy component and the prices of electricity, gas, and other fuels fell by 27.1% in the year to April. So that's the biggest fall since records began back in late '80s. So you'd be thinking, okay, so if it's fallen that much, why is this number not down? And that's worrying, right?

Well, that's right. And so therefore, you've got to look at the other side or the other portion of the inflation basket. And the most important is the services CPI. That's one portion of the inflation basket which the Bank of England monitor most closely. That's the part of the inflation story that indicates the— that's the key measure of domestic price pressures and ultimately, are businesses increasing prices of the services they're providing to consumers? Are consumers able to— what's the demand side of the equation like for those services at those higher prices? I mean, really, that's energy. We don't have control over demand side or the government or what they do with interest rates has no impact on energy prices. It's all supply side. Forget that. What's the underlying inflation story? It's services. Here, this was the most worrying thing of the whole report. This is why markets sold off. This is why we've pushed out our rate cut expectations for the Bank of England exactly like we've done for the US in previous months. What happened on the services side? The services CPI component dropped, but only a whisker. It was 6% in March and it's dropped to 5.9%. The Bank of England themselves just 2 weeks ago had predicted it would drop to 5.5%, but it hasn't. It stayed up at 5.9%. And this is the biggest story of the whole inflation report.

Yeah. So what, to put some numbers on this, I think the numbers I saw was the probability of a June rate cut. This was of late yesterday, so it might have shifted a little bit this morning. But it's now at 15%, and that's down from 50%. Yeah, on Tuesday, I think it was. And the likelihood of an August cut was seen at 40% now, and it was at 70% before.

It's going to be interesting because what— if we look at the wage growth figures which were released last week, then the wage growth is slowing at a slower rate than policymakers had expected. This then means that, all right, well, if wage growth is staying resilient, well, then that feeds into more consumer demand. If consumers are earning more than was expected, well, they're going to spend more than was expected, and then that's inflationary. We've seen this in the US. We've seen this story. You know, why aren't people just actually looking at evidence from what's happened in the US economically and just translating it across the Atlantic? Because in the US, wage growth remains strong, the consumer remains really resilient, the growth story picked up in momentum, and it prevented inflation from dropping to target, meaning the Fed's not able to cut. Aren't we now just going to see a similar pattern here? The wage growth story, to put some numbers on that, in April, wage growth on average was 4.9%. Now, that— sorry, not in April, the 3 months to April, so February, March, April, 4.9%. That's a faster rate of wage growth than the previous rolling 3-month period. It's actually about the same. If you look at the whole of the last 12 months, we've got a 5% wage growth figure. Wage growth is not slowing. Ultimately, that will feed into keeping the services side of the inflation basket probably more elevated than the Bank of England needs to be able to cut.

Yeah, just while you're explaining that, I was thinking Okay, so going back to, to Rishi. Yeah, the reason for now, like, I can understand that. Okay, so we can— wages looking good, so you can wait. Um, however, can you then frame it now as saying that— because Starmer is very much, we need change— and actually what Rishi's going to say as the counteraction to that is we need continuity to continue.

That's right. Well, he, I mean, when he was stood in the rain getting pissed on yesterday, well, you know, he was just talking about furlough. You know, I saved you as a nation because furlough was the name of that kind of scheme. I mean, most countries did it, right? Where instead of, you know, people working in restaurants being made redundant, the government stepped in and paid their salaries. This was the furlough scheme. And he said, I saved you. I mean, this is 4 years ago. All right. Decent job in the crisis. Well done. But COVID's behind us. So yeah, it's just, I don't know. It's just, it's goodbye, Rishi, isn't it? Really?

All right. Well, let's, um, let's move on and talk about the final segment, which is Nvidia. Because last night they've, they've done it again. And so, yeah, walk me through some of the, the numbers that you, that you saw.

Well, they've done it again. And actually, before I talk numbers, really, a lot of analysts out there are kind of putting Nvidia and their earnings right up there. As one of the absolute key, most important barometers for the whole global market story. And that is because what's driven markets in the last 12, 24 months has been the AI revolution, and Nvidia are the poster child of that, and they're considered to be the ultimate litmus test as to whether that AI revolution is losing momentum or not. Okay. And it's straight up like US inflation data is probably the only thing above NVIDIA earnings in people's kind of hierarchy as to what's important.

I just tried to find it, but I remember reading a snippet in an article yesterday and it was saying that it was a commodity trader and they were, I can't remember what they were trading, like tin. Or tungsten or some random metal. And it was like, actually, Nvidia is a really big deal even for us.

And I think there was some guy and he was saying that Angolan government bonds prices moved off the Nvidia earnings last quarter. Like, it's literally doesn't matter where or what it gets impacted by Nvidia earnings? I mean, where or what financial instrument? I mean, anyway, so look, it's really important. And the concern was that they just wouldn't be able to sustain this just absolutely extraordinary, you know, hockey stick growth story. But the good news is they have. So here are the numbers. Their revenue was up 262% in the past quarter. Year on year. Previous quarter, it was up 265%. So basically, a ridiculous growth rate continues. Their revenue was $26 billion, beating forecasts. The forecast was $24.7 billion. Earnings per share, $5.98. That's 600% up on the same period last year. Gross margin, 78.4%, again, beating expectations of 77. Net income, $14.9 billion, beating expectations of $13.2 billion. Bearing in mind, these expectation figures were just astronomically high. The bar they've got to beat is so high, and yet they just go and vault it, no problems whatsoever. I think one of the big concerns had been that we— this would be the first quarter we might see a slowdown in this ridiculous growth story. What, what people have been talking about— so Nvidia are transitioning from Hopper, their GPUs that have just had sensational demand that's driven all of this, their H100 chips, okay, that Facebook are buying at 40 grand a pop. Those They're transitioning now to the next gen, all right, the next generation of chip, which is called their Blackwell chip. Now they're going for a 12-month new generation cycle. Okay. And actually their CEO had confirmed that. He said, yep, Blackwell's coming now. They're expecting to start to ship that this quarter. But he says the next generation is going to be in 12 months' time. and then 12 months after that, and we're going in a 12-month cycle. What analysts had feared was the cycle's so rapid that actually a lot of these big, huge tech firms that are buying all these chips up, they might go, well, actually, rather than buying the Hopper chip, Blackwell's coming pretty soon. You know what? I might as well just wait. And the fear was there would be what they call this air pocket. Air pocket of demand where you see demand for the Hopper chip drop because people are just waiting for Blackwell. Now, what these numbers show is that definitely hasn't happened. There's no air pocket. This thing's just—

I think the speed of change in AI is so rapid. I think that air pocket is evaporated.

Wow.

Almost immediately. As the numbers suggest.

Yeah. And the Blackwell chip, which comes just 12 months after the Hopper chip was delivered, Blackwell will be twice as powerful.

Wow.

It'll have 5 times the performance on inference, which is basically the speed at which these AI bots can give you an answer back, basically. And the CEO was saying that demand for Hopper and Blackwell is way ahead of supply. And he's predicting for, for the year ahead, like for the quarter coming up, he's predicting $28 billion revenue, which is another increase on previous guidance and beating forecasts. And so look, the share price is up 6%, and as you said, it's broken the magic $1,000 level. Just to put that in context, right, at the end of 2023, final trading day of 2023, It closed just a whisker below $500. So it's doubled in 5 months. But like, if you look at, you know, if you go back to, I don't know, if you go back to pre-COVID, don't do this to me, Piers.

Don't— why are you doing this?

$41.

He's just trying to make me feel bad.

2019, $41. Oh, it's now above $1,000.

Did you say $41 it was trading at pre-COVID?

End of 2020, end of 2019, it was trading at $41.

Okay, so you going through that list of numbers would make a lot of listeners go, oh my goodness, I've just missed— I've just missed out on like a Bitcoin-esque type move.

Yeah.

And they'll be thinking, right, I want a piece of this now. As always is the case. What would your advice be to them?

I would explain to them this thing called FOMO, which is the fear of missing out, where it's like, ah, damn it, I should have got in, I should have got in, I should have got in. It goes up, it goes up. Ah, I should have got in. It goes up and it goes up. You're like, oh God, I'm just gonna get in. But of course you inevitably By the top. I mean, look, I don't think this is the top actually, but forget about doubling in 5 months, which it has just done in the last 5 months. I can pretty much guarantee you it's not going to double in the next 5 months, right? And I think, I think it can still go up, um, for a couple of reasons we'll talk about in a sec, but the growth, the rate at which it's going up has to start to calm down. And so yeah, most of this story is in the rearview mirror in terms of crazy return on investment.

I was just thinking, if the company's obviously clearly the, the market leader in their space and they're making money hand over fist, so does that make any new entrance to the market almost impossible? So it has to come from a competing existing competitor like an AMD or so forth, right?

Well, that's one of the— again, if you're the thesis of, you know, this is a bubble, Nvidia is too high, one of the key elements of that thesis is that the competition are coming. And so AMD is in talks with some of the Mag Seven, who are the biggest buyers of Nvidia chips, to come up with an alternative solution, which means basically Nvidia have cornered the market here. For now. And the idea is, well, how quickly will a rival chip come on the scene? And look, you've got Amazon and Meta, they're working with AMD to come up with an alternative solution. It's probably going to happen. But I guess the point about Nvidia is they're so far ahead. And this is why it's key about this 12-month next-gen chip cycle. They're so far ahead and they're trying to say, we will stay ahead. We've got a lead and we'll maintain our lead because we're producing the next gen. The cycle's so rapid. So that's their, that's kind of their argument. They built the moat and they'll maintain it. I don't know. We'll see. I mean, look, they're from a market cap point of view, you know, they're now $2.3 trillion. They're the third biggest country, uh, company on the planet. You know, it's only Microsoft and Apple that are bigger. They've vaulted over, they're bigger than Google. They're bigger than Alphabet. You know, They've come from no— well, not nowhere, but almost nowhere. And it's a sensational story. But that's in the rearview mirror, right? I think what happens from now? Well, two interesting things came about. The first, which is the lesser interesting thing, they increased their dividend, which again is a crazy new world, right? Tech stocks paying dividends, high-growth tech stocks paying dividends is just not the norm. And you know, you got the likes of Meta and Google and now Nvidia, they're all paying dividends now, which is interesting. So they increased their dividend by 150%. But perhaps the more interesting news, which might mean they can sustain this, some of this kind of upside momentum, they did a 10-for-1 stock split. Um, so what this means is, because look, the share price, as I've said, has gone from $41 at the end of 2019 to now $1,000, over $1,000, right? So if you want to buy Nvidia shares, They're $1,000 a pop, um, which means that they're getting to be so expensive that really it's kind of eliminating the retail investor from the marketplace, and it's really only the institutional investors that have got the type of capital that a share price of north of $1,000 isn't a problem. So this is quite a classic play, and look, everyone's done it. Apple have done it many times, Amazon have done it, Google have done it, Meta have done it. They've all done it where the share price gets so high that then do a, a stock split. So a 10-for-1 stock split means that for every share you own today, on June the 7th, one share, if you own one share now, on June the 7th, that one will be split into 10. Now the price of the 10 will be one-tenth of the price of the one. So the amount, the total value of your share ownership won't change. It's the total number of shares you own will increase by 10x. So the share price will be 10 times less. Okay. Now this is to kind of, A, bring in more demand from the lower end of the retail market. Okay. So now it's $100 a share, right? So fine, maybe a bit more affordable. And so the idea is this can lead to more demand, which, and if you look back at stock splits done by all these other big tech firms in previous years, it's been a good play to increase demand to kind of sustain that, that sort of, uh, upside momentum. That's the kind of theory behind it.

So it's, it's a regular pattern of behavior. This isn't a— shouldn't come as a shock or a surprise.

Yeah, I mean, I don't think— well, I don't, I don't know if anybody had it on their radar as something that Nvidia would do at this earning. I think it is a bit of a surprise, but it's almost like now it's, now it's announced, it's like, well, okay, yeah, Must make sense. It's not surprising. So I think it's part of the story. Look, share prices are up 6%. This is nowhere near as big a pop higher as we've seen from their quarterly earnings going back over the last 12 months, where we've been used to seeing— well, if you go back 12 months, I think their share price was up, wasn't it? Up, I think it was up 60% off one of their earnings when the AI thing really started to, to go, and Nvidia showed that we are right at the front of this. Um, so we're used to double-digit stock price pops. So this is 6%. Don't get me wrong, great, above $1,000, but it's much more muted than we've seen, uh, in previous earnings releases.

Okay, well, look, let's wrap it up there. Thanks for your, your time and your insights and your debate over, uh, the future of leadership in the UK. And yeah, hope everyone has a fantastic rest of the week, weekend, and we'll see you next week. Thanks, Piers.

Have a great weekend.