Iran Hormuz Standoff: Nvidia's 70% Growth Wins AI Bulls

Somewhere between Nvidia's jaw-dropping earnings and Iran threatening to bomb its way to a better deal, the market is trying to figure out which story matters more. Spoiler: both do, and they're pointing in opposite directions.

Let's start with the good news. $NVDA posted Q2 sales of $96.2 billion, more than doubling year-over-year, then had its CFO do something almost unheard of: issue annual guidance. The number was 70% revenue growth for fiscal 2028, against a street consensus of 45%. Shares jumped 4.7% after hours, NASDAQ futures popped 1.3%, and suddenly every AI infrastructure bull felt vindicated. The Bloomberg Daybreak podcast called it correctly: demand still exceeds supply, and that 70% figure is apparently the conservative read. Memory stocks in Asia caught a bid too, with Kioxia up 3.7%, SK Hynix and Samsung up over 1%, and Nanya Tech in Taiwan surging nearly 5%. Chinese AI names piled on, with Z.AI up 9.5% after being outed as the creator of the viral Ox Alpha model.

Now the bad news, which smells a lot like crude oil. Iran says the Strait of Hormuz stays shut until the U.S. meets interim deal conditions. Trump says there are no talks planned and is floating the idea of bombing Oman. The UAE confirmed two Iranian missiles were detected. Reuters impact scores on these headlines are all sitting at 4.3 to 5.0, which is basically the geopolitical equivalent of a five-alarm fire. Oil is elevated on Middle East supply concerns, Australian fuel prices have hit around $2 per liter (a silver lining: it's apparently making Chinese EVs look very attractive Down Under), and bond investors are described as being in outright revolt.

The tension here is real. Nvidia's results reinforce the AI infrastructure thesis and give tech bulls exactly what they needed. But a prolonged Hormuz shutdown means energy inflation stays sticky, which means the Fed's job gets harder, which means rates stay higher for longer, which means those richly valued AI multiples need to work that much harder to justify themselves.

Lam Research already showed the semiconductor equipment playbook works when AI demand is this hot, jumping 18% post-earnings. Salesforce posted a blowout quarter with agentic platform usage up 6x. The earnings season is giving bulls plenty of ammunition. But one Iranian missile landing in the wrong harbor could rearrange the entire macro setup before the next Fed meeting.

The market wants to party with Nvidia, but Iran keeps knocking on the door and asking if anyone has seen a ceasefire.