Nvidia, don't let us down
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Wednesday! That means it’s Nvidia earnings day! Folks are worried that the market could stumble if Nvidia misses trailing results or guides weakly. It’s not an idle fear. Much of the year’s stock market gains are predicated on companies with AI stories trading well. The economy is also investing heavily in AI infra. Forget the Fed, all eyes on Jensen. To work! — Alex
📈 Trending Up: Starship! … German military preparedness … inflation worries … China’s ‘little Nvidia’ … AI PACs … Valteri Bottas … borrowing costs … MongoDB, after earnings … EU defense spending …
📉 Trending Down: Domestic rail … AI copyright abuse? … AI safety … AI tenure … crashing out on main … capex caution … operational clarity in Sam’s house … profitability in China … Indian exports? …
Things That Matter
Okta’s worries dissipate: A quarter ago, identity and security company Okta told investors that it expected “some near-term uncertainty in [its] federal business.” The good news? According to its most recent quarterly results, the company’s government sales went fine. From an unofficial earnings transcript, the company’s CFO Brett Tighe said:
Last quarter, we introduced some conservatism in our business outlook with regard to uncertainty in the macro and our federal vertical. I'm pleased to say that neither materialized, and we're removing them from our outlook for the remainder of the fiscal year.
This is great news for startups that sell to the government; DOGE did not curtail software spend so much that the larger federal vertical is kaput. Palantir’s quick growth implied the point, but seeing Okta also put up solid numbers solidifies the case.
Box dogfoods: Shares of enterprise content and productivity company Box are up this morning after the company’s earnings included a bump to its full-year revenue and a $3 million revenue beat ($294 million ahead of an expected $291 million result). How did Box manage to raise its guidance? Growing remaining performance obligations, or RPO.
What drove RPO growth? Per Box CFO Dylan Smith, the “results reflect the impact of Box AI adoption on our business, which is driving strong underlying business momentum and giving our customers the confidence to increasingly commit to multiyear contracts.”
Box CEO Aaron Levie said that "across” his company, workers “are using Box AI agents to augment our work in every area of the business.” Eating what you build is a good way to either incense your staff or gear up for a very different future. Box is betting it’s on track two.
About that AI study: Yesterday, CO took a look at a Stanford study alleging an impact in employment for early-career workers in sectors where AI automation is possible today. We contrasted the study to Where’s Your Ed At author Ed Zitron’s latest post on countering AI hype. Here’s his response to our coverage, arguing that the results show correlation and not causation. I didn’t expect Ed would change his views over a single study — nor was that the goal — but I wanted to share his criticisms of the report so you could weigh them yourself.