World Street | Nvidia slump continues; Ackman’s IPO stumbles; Starbucks revenue miss; Samsung’s record earnings and more

World Street offers a sneak peek into the world of business and the economy.

Nvidia stock's descent continues. down 26% from June's high. Bill Ackman's IPO for Pershing Square USA Ltd. is set to raise $2 billion, much less than the earlier $20 billion target. Starbucks misses revenue expectations. Tesla recalls 1.85 million vehicles over a hood issue. Samsung sees its highest net income growth since 2010. All this and more on this edition of World Street.

Chip Slip

Nvidia stock plummeted 7% to $104 after reporting worse-than-expected Q2 results, outpacing the Nasdaq Composite's 1.3% decline amid a tech stock slump. This marks Nvidia's lowest closing price since May 23, down 26% from its June intraday high of over $140.

The leading semiconductor chip designer, crucial for generative AI technology, has seen a more than 10% correction.

Fund Fizzle

Bill Ackman’s planned IPO for a US closed-end fund is projected to raise $2 billion, significantly lower than the $20 billion target suggested earlier this month, according to Bloomberg.

Pershing Square USA Ltd.’s IPO is expected to price on August 5 after the market close, per a term sheet seen by Bloomberg News. The pricing depends on the SEC approving the IPO registration statement, with the fund set to debut on the NYSE the following day.

Brew Blues

Starbucks reported quarterly revenue on Tuesday that fell short of analysts' expectations due to weaker demand in both its US and international cafes. Its net sales dropped a percent to $9.11 billion. The company’s same-store sales fell 3% in the quarter, fueled by a 5% decline in transactions.

However, the results weren't as disappointing as investors anticipated, leading to a more than 5% rise in the company's shares during extended trading.

Outage Outcry

Microsoft Corp. said an outage of Azure cloud applications was triggered by a distributed-denial-of-service cyberattack. The DDoS attack began early Tuesday and an error in Microsoft’s automated protection mechanisms worsened the impact rather than mitigating it, the tech giant said in a status update. Customers were affected in multiple regions, including services running on Azure.

Tesla Trouble

Electric vehicle maker Tesla on Tuesday announced the recall of 1.85 million vehicles in the US because of an issue with software failing to detect an unlatched hood. The National Highway Traffic Safety Administration (NHTSA) said that an unlatched hood opening fully could cause the driver to crash because of their view being impeded.

The recall is Tesla's biggest since December when it recalled 2.03 million vehicles, nearly all of its cars on US roads at the time, to install new safeguards in its Autopilot system.

Amazon Accountability

Federal regulators have ruled that Amazon is responsible for defective goods sold by third-party merchants on its marketplace, rejecting the company's claim of being just an intermediary.

In a landmark order, the US Consumer Product Safety Commission said the agency unanimously agreed Amazon “fits squarely” within the definition of a distributor of goods, “and therefore bears legal responsibility for their recall.” Amazon must now devise a plan to inform buyers and the public about product hazards and provide refunds or replacements.

Samsung Strides

Samsung Electronics Co. reported its fastest pace of net income growth since 2010 after artificial intelligence (AI) boom lifted earnings at its semiconductor division.

The world’s largest maker of memory and smartphones posted a six-fold surge in net income to 9.64 trillion won ($6.96 billion) in the June quarter. Earlier this month, it reported a 15-fold rise in preliminary operating profit and a 23% rise in revenue, the biggest gain in sales since 2021.