Japanese video game giant Nintendo announced a significant 55% decline in profits for the April-June quarter of 2024, primarily due to falling sales of both its gaming consoles and software, with Switch sales falling considerably. 

The period saw Nintendo’s profit drop to 80.95 billion yen ($543 million) from 181 billion yen a year earlier, while quarterly sales plunged 46.5% to 246.6 billion yen ($1.7 billion).

The Nintendo Switch, now in its eighth year, has surpassed 140 million units sold globally. However, as often happens with gaming consoles as they age, sales are beginning to taper off.

Switch sales fall, decrease in sales from movie drags down earnings

The latest quarter reported a sharp 46% year-on-year decline in Switch sales, from 3.9 million units to just 2.1 million.

Similarly, software sales also experienced a notable decline of 41%. 

Despite the successful launches of games like “Paper Mario: The Thousand-Year Door” and “Luigi’s Mansion 2 HD,” which sold 1.76 million and 1.19 million units respectively, overall software sales could not match the previous year’s performance, Nintendo said. 

Hardware and software sales in the first quarter of last fiscal year were substantially driven by the May 2023 release of The Legend of Zelda: Tears of the Kingdom, so compared to then, hardware sales were down 46.3% and software sales were down 41.3% year-on-year.

It added that last year’s exceptional results were also driven by the release of “The Super Mario Bros. Movie,” which substantially increased audience engagement and related sales.

However, a decrease in the revenue related to the movie in Q1 dragged down sales in the mobile and IP-related business by 53.8% to 14.7 billion yen.

In terms of digital sales, Nintendo reported a 32.6% decline year-on-year, totalling 80.7 billion yen. This drop was primarily attributed to decreased sales of downloadable versions of packaged software for the Nintendo Switch.

Nintendo did not release any new information about a promised Switch successor. Earlier this year, its president, Shuntaro Furukawa, said an announcement would be made before April 2025.

Nintendo shares fall

Nintendo’s shares fell by 2.3% in Tokyo trading shortly before the earnings announcement. The overall Nikkei benchmark saw a larger drop of 5.8% on the same day.

The weakening of the US dollar against the yen, now trading at about 149 yen after previously being above 160 yen, has also impacted Nintendo’s financial results. 

A weaker yen generally benefits exporters like Nintendo by enhancing the value of overseas earnings.

Future outlook 

Nintendo did not offer any changes to its financial forecast published on May 7, 2024. 

For the fiscal year ending in March 2025, Nintendo has maintained its profit forecast at 300 billion yen ($2 billion). 

Nintendo is planning to release new titles in popular franchises such as Mario Party, Donkey Kong, and Zelda over the next several months. 

Additionally, another Super Mario film is set for release in 2026, as the company continues to leverage its valuable intellectual properties.

To further engage its fan base, Nintendo is also expanding its physical presence. A new Nintendo Museum is slated to open later this year in Kyoto, Japan, the company’s headquarters.

Moreover, a new Nintendo store is scheduled to open in San Francisco’s Union Square next year, aiming to attract more customers and boost brand loyalty.

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Turkey’s infotech regulator, the Information Technologies and Communication Authority (BTK), has blocked access to Instagram.

The decision, announced on August 2, has left millions without access to the popular social media platform, both on desktop and mobile apps. The BTK did not provide a specific reason or duration for the ban.

Criticism over content moderation

The move comes in the wake of a controversy involving Fahrettin Altun, the communications director of the Turkish presidency.

On July 31, Altun publicly criticised Instagram for blocking condolence posts related to the death of Ismail Haniyeh, a key figure in the Palestinian militant group Hamas.

Altun labelled Instagram’s actions as “censorship, pure and simple,” and expressed frustration that the platform did not cite any policy violations as the basis for its decision.

No response from Meta

As of now, Instagram’s parent company, Meta Platforms Inc., has not issued any statements regarding the ban or Altun’s allegations.

The lack of response has further fuelled speculation and debate over the motivations behind both Instagram’s content moderation decisions and Turkey’s subsequent ban.

Historical context of social media bans in Turkey

This is not the first instance of social media platforms being blocked in Turkey. Over the past decade, the Turkish government has imposed similar bans on platforms like Twitter, Facebook, and YouTube, often citing reasons related to national security, public order, or protection of citizens from harmful content.

These bans have usually been temporary, lasting from a few hours to several days, but they have sparked significant public outcry and concerns over freedom of expression.

Potential implications

The ban on Instagram could have wide-reaching implications for both Turkish users and the platform itself. Instagram is one of the most popular social media platforms in Turkey, with millions of active users who rely on it for communication, entertainment, and business.

The sudden inaccessibility of the platform disrupts these activities, potentially leading to economic and social repercussions.

Moreover, this incident raises questions about the broader issues of censorship and content moderation on global platforms.

The tension between national regulations and the policies of multinational tech companies continues to be a contentious issue, highlighting the complex dynamics of governance in the digital age.

Future of digital communication in Turkey

The current situation remains fluid, and it is unclear how long the ban will last or what conditions might lead to its reversal. In the meantime, Turkish users are left to navigate alternative means of communication and content sharing.

The ban also serves as a reminder of the broader challenges and debates surrounding digital rights, freedom of expression, and the role of social media in contemporary society.

As Turkey continues to navigate these challenges, the international community will be watching closely. The outcome of this situation could set precedents for how other countries and platforms handle similar conflicts in the future.

For now, Turkish users and global observers alike await further developments and potential resolutions to this ongoing issue.

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Japan’s stock market plunged to an eight-month low on Friday, following the Bank of Japan’s (BOJ) decision to raise benchmark interest rates to their highest level since 2008. 

This decline, spanning two consecutive days, has rattled investors and analysts, leading to significant market volatility.

The Nikkei 225 fell 5.81% to close at 35,909.7, marking its worst day since March 2020 and dropping below the 36,000 mark for the first time since January. 

Meanwhile, the broader Topix index experienced an even larger loss of 6.14%, closing at 2,537.6, marking its worst day in eight years.

Nikkei 225’s worst day since March 2020

This sharp decline contrasts starkly with Nikkei’s performance less than a month ago when it hit an all-time closing high of 42,224.02 on July 11. 

The sudden downturn has sparked discussions among analysts about the future trajectory of Japan’s markets. Bruce Kirk, Chief Japan Equity Strategist at Goldman Sachs, described the situation as a “transitional phase” during an interview with CNBC.

The recent rally in Japan’s stock markets had been driven by three primary factors: yen weakness benefiting blue-chip exporters and banks, expectations of monetary policy normalization, and corporate governance reform. 

However, the BOJ’s recent rate hike has altered these dynamics. 

“The rules of the game have definitely changed, particularly around rates and FX,” Kirk noted. 

Investors are now reassessing their sector positioning in light of the new economic environment.

Shift to domestic demand-focused stocks

Despite the sharp declines, there is a silver lining in this repositioning. 

Investor interest in Japan’s small- and mid-cap companies is on the rise for the first time in about three years. 

These companies, with higher exposure to domestic demand and reduced vulnerability to foreign exchange fluctuations, are becoming more attractive to investors. 

Kirk highlighted that “people are now looking for areas that are more domestic demand-focused, and that’s really putting the interest back on Japan’s small and mid-caps.”

Kirk outlined two possible reasons behind the current reassessment following the BOJ’s rate hike. 

First, there is skepticism among investors about the Japanese economy’s ability to handle a 25 or 50 basis points policy rate hike. 

Second, there are concerns about the profitability of Japanese corporations with the yen trading below 150 against the dollar. As of now, the yen trades at 149.4 against the greenback, having dipped below the 150 level since the BOJ decision on Wednesday.

Japan’s markets were Asia’s top performers last year and remained strong until June this year. 

The recent downturn marks a significant shift, but analysts like Kirk believe the market’s rally story is not entirely broken. 

Instead, the narrative is evolving, and this evolution is likely to be accompanied by continued volatility and aggressive sector rotation. 

The reassessment by investors indicates a search for new opportunities in a changing economic landscape.

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The United Nations Food and Agriculture Organization (FAO) released its latest data on Friday, indicating a slight dip in the global food price index for July.

The index, which monitors the prices of the most internationally traded food commodities, fell to 120.8 points, down from a revised 121.0 in June. This slight decrease marks a pause in the upward trend observed over the previous four months.

Cereals index sees significant decline

The primary driver of the overall decrease in the index was a notable drop in cereal prices.

This component of the index registered a decline, alleviating some pressure on global food markets. The FAO’s cereal price index fell due to improved crop conditions and expectations of strong harvests in major producing regions.

In contrast, prices for other food categories showed upward movements. The index for vegetable oils, meat, and sugar saw increases, contributing to the complex dynamics of the global food market.

Meat, vegetable oils, and sugar indices rise

The meat price index experienced an increase, reflecting higher demand and constrained supply in several regions. The vegetable oil price index rose, influenced by tight global inventories and lower-than-expected production levels.

Sugar prices also climbed, driven by concerns over adverse weather conditions affecting key sugar-producing countries.

Year-on-year analysis shows a significant decline

Despite the minor decrease from June to July, the FAO index was 3.1% lower than its level one year ago.

More strikingly, it was 24.7% below the peak reached in March 2022, following the geopolitical turmoil caused by Russia’s invasion of Ukraine, both significant exporters of agricultural products.

Factors influencing the index’s movements

The July data underscores the volatility in global food markets, influenced by a myriad of factors including weather conditions, geopolitical events, and shifts in supply and demand dynamics.

For instance, improved weather in the United States and Brazil contributed to better crop conditions, which in turn helped ease cereal prices.

Other commodities like vegetable oils and sugar faced supply constraints, partly due to adverse weather in key producing regions like Southeast Asia and Brazil, respectively.

The meat index’s increase was partly attributed to continued high demand in major markets, coupled with supply chain disruptions and disease outbreaks in some livestock sectors.

Broader implications for global food security

The fluctuations in the FAO food price index have broader implications for global food security.

While the recent dip provides some relief, the overall high prices continue to pose challenges, particularly for low-income countries that are heavily dependent on food imports.

The high costs of essential commodities such as vegetable oils and sugar can strain household budgets and exacerbate food insecurity.

Moreover, the ongoing conflict in Ukraine continues to pose risks to global food supply chains. Disruptions in production and export activities from Ukraine and Russia have significant impacts, given their roles as major suppliers of wheat, corn, and sunflower oil.

Looking ahead: cautious optimism

Looking forward, there is cautious optimism regarding global food prices. Improved crop forecasts and expectations of strong harvests in major producing regions could help stabilise prices.

The FAO warns that ongoing geopolitical tensions, climate-related disruptions, and economic uncertainties could continue to affect food markets.

Policymakers and international organisations are urged to monitor these developments closely and implement measures to support vulnerable populations.

Ensuring the resilience of global food supply chains and addressing the underlying causes of price volatility are crucial steps towards achieving food security for all.

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Intel Corp (NASDAQ: INTC) has been striving to establish itself as a significant player in the artificial intelligence (AI) sector. However, Eric Ross, Chief Investment Strategist at Cascend Securities, warns that Intel is not truly an AI stock. 

Ross criticizes Intel for lagging in process technology advancements over the past decade, which has contributed to the company’s disappointing earnings for its second financial quarter.

In Q2, Intel reported a 3% year-on-year decline in its data center revenue, suggesting that AI may not be the expected growth driver for the semiconductor giant. 

Following this news, Intel’s stock plummeted more than 20% in premarket trading on Friday.

Intel trails behind TSMC

During an appearance on CNBC, Ross labeled Intel as “ancient history” due to its failure to aggressively transition its process technology from 14 nm to 10 nm, and then to 7 nm. 

He highlighted that Intel is now nearly two generations behind Taiwan Semiconductor Manufacturing Company (TSMC), which has executed its technology transitions flawlessly. 

As a result, Intel is losing market share even to Advanced Micro Devices (AMD), which benefits from TSMC’s advanced technology.

Ross also pointed out that Intel has poorly capitalized on the US government’s multi-billion-dollar initiative to onshore chip manufacturing. 

He predicts that Intel will need at least two to three years of aggressive investment to catch up with TSMC in process technology, making the stock unattractive in the near to mid-term.

Intel stock falls amid gloomy guidance

Intel’s shares are taking a significant hit, not only due to disappointing earnings but also because of its plans to reduce its global headcount by 15%. 

This means that approximately 18,000 employees will be laid off as the company aims to achieve $10 billion in annual cost savings. 

Additionally, Intel suspended dividend payments for the fourth quarter on Friday.

For the current financial quarter, Intel has guided for a per-share loss of 3 cents on up to $13.5 billion in revenue, significantly below analysts’ expectations of 31 cents per share in earnings and $14.35 billion in revenue. 

This stark contrast in guidance led Bank of America analyst Vivek Arya to downgrade Intel stock to “underperform” and lower his price target to $23, aligning with Intel’s current trading price.

Intel’s recent struggles highlight the challenges it faces in the competitive semiconductor industry. 

Despite its efforts to rebrand itself as an AI-focused company, Intel’s technological delays and strategic missteps have hindered its progress. 

The company’s need to play catch-up with industry leaders like TSMC and its failure to leverage government initiatives effectively suggest a challenging road ahead.

However, Intel’s commitment to significant cost savings and potential future investments in process technology may eventually position it better in the market. 

Investors will need to watch closely how Intel navigates these challenges and whether it can regain its footing in the highly competitive tech landscape.

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ExxonMobil and Chevron, the largest oil and gas companies in the US by market capitalization, reported their Q2 earnings on Friday, highlighting divergent strategies and outcomes in a challenging market. 

While both companies faced pressure from declining refining margins, Exxon managed to weather the storm more effectively than Chevron, showcasing its robust strategic adjustments and operational efficiencies.

Exxon Mobil’s strong Q2 performance

ExxonMobil reported a net income of $9.2 billion, or $2.14 per share, marking a 17% increase from the $7.9 billion, or $1.94 per share, recorded in the same quarter last year. 

This performance exceeded analysts’ expectations, which forecasted earnings per share of $2.01. Revenue also surged to $93.06 billion, up from $82.91 billion a year ago, surpassing the anticipated $90.99 billion.

The company achieved these impressive results through record production levels in Guyana and the Permian Basin, and a successful merger with Pioneer Natural Resources, which added $0.5 billion to its earnings. 

Additionally, the expansion of the Beaumont refinery bolstered margins, and structural cost savings alongside high-value product sales helped mitigate the impact of lower industry refining margins.

Exxon also raised its 2024 output target by 13% to 4.3 million barrels of oil equivalent per day (boepd), following the Pioneer merger.

Darren Woods, Exxon’s Chairman and CEO, remarked, “We achieved record quarterly production from our low-cost-of-supply Permian and Guyana assets, with the highest oil production since the Exxon and Mobil merger. We also set a record in high-value product sales, growing by 10% versus the first half of last year. Our transformative merger with Pioneer was completed in about half the time of similar deals, and we’re continuing to invest in high-potential businesses such as ProxximaTM, carbon materials, and virtually carbon-free hydrogen.”

Chevron’s struggles amidst lower refining margins

In contrast, Chevron reported earnings of $4.4 billion, or $2.43 per share, a significant decline from the $6 billion, or $3.16 per share, earned in the same quarter last year. 

The earnings fell short of analysts’ projections, which estimated earnings per share of $2.93. 

Although Chevron’s revenue of $51.18 billion exceeded expectations, its profit was adversely affected by lower refining margins, increased operating expenses, and foreign exchange headwinds.

Chevron’s global net oil-equivalent production increased by 11% to 3.29 million barrels per day, driven by the integration of PDC Energy and strong performance in key regions. However, the company’s U.S. downstream earnings plummeted to $280 million from $1.08 billion a year earlier, and international downstream earnings fell to $317 million from $426 million. 

CEO Mike Wirth acknowledged the operational challenges, stating, “This quarter, we delivered strong production and enhanced our global exploration portfolio but faced operational downtime and softer margins.”

Following the earnings reports, Chevron’s stock declined by 2.4%, while Exxon’s stock also fell by 1.63%. 

Chevron’s share price has dropped about 4.5% over the past year, whereas Exxon’s stock has gained 9%.

Chevron’s proposed $53 billion acquisition of Hess, which would give it a 30% stake in a Guyanese oil field controlled by Exxon, remains stalled due to an arbitration claim filed by Exxon. 

This acquisition could potentially enhance Chevron’s upstream production and margins once completed.

Overall, Exxon’s strong performance and strategic moves position it favorably in the energy sector, while Chevron’s challenges and ongoing acquisition efforts offer a mixed bag of opportunities and risks for investors.

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VSee Health Inc (NASDAQ: VSEE) saw its stock nearly triple on Friday, fueled by an exciting new partnership with Ava Robotics. 

This collaboration aims to enhance intensive care units (ICUs) by integrating VSee’s telehealth technology into Ava’s robotic systems, allowing for remote, personalized patient care.

The newly announced partnership will see VSee’s software embedded into Ava robots, significantly enhancing telehealth services. 

This integration is set to extend advanced medical care from large hospitals to regional and smaller intensive care units across the United States, according to a joint press release from the two companies.

Despite impressive jump, stock remains significantly below

VSee Health’s stock experienced a remarkable surge on Friday, with its price nearly tripling. 

This dramatic increase in stock price was accompanied by a surge in trading volume, with over 6 million shares changing hands—far surpassing the average daily volume of 163,000 shares. 

Despite this impressive jump, VSee Health’s stock remains significantly below its year-to-date high reached in early June.

Imo Aisiku, Co-CEO of VSee Health, emphasized the significance of telehealth as a transformative innovation in modern medicine. 

He expressed confidence that the partnership with Ava Robotics would democratize access to high-quality critical care across the nation, extending the reach of top-tier physicians to patients in even the most remote areas.

Despite the dramatic rise in VSee Health’s stock price, investors are advised to proceed with caution. 

The stock’s current price, below $10, makes it susceptible to market manipulation and volatility. 

Potential investors should be mindful of these risks as they consider entering or expanding their positions in VSee Health.

At the time of writing, the stock was trading at $4.38, down from the opening highs of $6.25.

Recent developments at VSee Health

In addition to its partnership with Ava Robotics, VSee Health has been active in expanding its reach and capabilities.

Last week, the company announced a collaboration with SkywardRX to provide telehealth and billing services to various clients, including nonprofits, hospitals, and Fortune 20 corporations.

This move underscores VSee Health’s commitment to improving healthcare delivery and access, particularly for vulnerable populations.

The company also recently appointed two new independent directors, David L. Wickersham and Cydonii V. Fairfax, to its board.

Furthermore, VSee Health’s subsidiary, iDoc Telehealth Solutions, secured a contract to provide specialty medical services to the U.S. Federal Bureau of Prisons last month.

Although the company is showing promising upward momentum, it is important for investors to remember that VSee Health does not currently offer a dividend, making it less appealing to income-focused investors.

As the company navigates this period of growth and transformation, keeping an eye on its future developments and market performance will be crucial.

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Elliott Management, a Florida-based hedge fund managing approximately $70 billion in assets, has issued a stark warning to its investors regarding Nvidia, asserting that the chipmaking giant’s stock is caught in a “bubble” driven by exaggerated expectations surrounding artificial intelligence (AI).

The firm conveyed this message in a recent letter to clients, a copy of which was obtained by the Financial Times.

Elliott skeptical over AI’s long-term viability

In the letter, Elliott Management expressed skepticism about the ongoing high-volume purchases of Nvidia’s graphics processing units (GPUs) by Big Tech companies.

The hedge fund questioned whether the AI technology propelling Nvidia’s stock price is truly as revolutionary as it is portrayed.

Many of AI’s supposed uses are never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy.

Nvidia has become a dominant player in the market for powerful processors required to build and deploy large AI systems, such as the technology behind OpenAI’s ChatGPT.

Companies like Microsoft, Meta, and Amazon have invested tens of billions of dollars to develop AI infrastructure, with a significant portion of that capital directed to Nvidia. Despite this, Elliott Management remains unconvinced about the long-term viability of these investments.

Market reactions and broader implications

The hedge fund’s warning comes at a time when chip stocks, which have experienced a significant rally fueled by enthusiasm over generative AI, are facing a downturn.

Concerns about whether large companies will continue to spend heavily on AI have led to a reevaluation of stock prices in the sector.

For instance, Intel’s shares fell by 20% following the announcement of plans to cut approximately 15,000 jobs.

Nvidia’s stock, which briefly made it the world’s largest company with a market capitalization of over $3.3 trillion in late June, has since declined by more than 20%. Despite this drop, Nvidia’s stock remains up approximately 120% for the year and over 600% since early last year.

This volatility reflects the broader uncertainties facing tech companies heavily invested in AI.

Elliott Management’s cautious approach

Elliott Management has largely avoided investing in what it terms “bubble stocks,” including those within the Magnificent Seven group of tech giants.

Regulatory filings indicate that Elliott held a small position in Nvidia worth around $4.5 million at the end of March, though the duration of this investment is unclear.

The hedge fund has also been cautious about shorting high-flying tech stocks, describing such a strategy as “suicidal.”

Founded by billionaire Paul Singer in 1977, Elliott Management has a strong track record, having only posted losses in two calendar years since its inception.

The firm reported a 4.5% gain in the first half of this year. In its letter, Elliott highlighted the gap between AI’s promised productivity gains and its actual performance.

The firm argued that AI applications to date have been limited to tasks such as summarizing meeting notes, generating reports, and assisting with computer coding, falling short of the extensive hype.

Potential for an AI market correction

Elliott Management suggested that the AI investment bubble could burst if Nvidia reports disappointing financial results, which might “break the spell” of investor confidence.

This scenario could lead to a broader reassessment of AI-related investments and their true impact on productivity and market value.

Elliott Management’s warning about Nvidia and the broader AI investment landscape highlights growing concerns over the sustainability of the current tech boom.

As AI technologies continue to evolve, the challenge for investors and companies alike will be to distinguish between genuine innovation and speculative hype.

The hedge fund’s cautious stance serves as a reminder of the need for measured expectations and careful evaluation of long-term value in the fast-paced world of technology.

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