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- Business and finance update 2nd September 2024
Business and finance update 2nd September 2024
Nvidia takes a dip
Good morning. Today we're talking about Nvidia’s stock dip, Klarna’s workforce ambitions and Ikea’s new business.
Big Stories
Nvidia takes a dip
Shares in US chipmaker Nvidia dropped as much as 7% following the release of its second quarter earnings report. Despite surpassing analyst expectations for both revenue and profit, investors were disappointed by the company's sales forecast, which raised concerns about slowing growth. The company’s revenues in the period more than doubled to $30bn driven by strong demand for its hardware that powers AI technology. CEO Jensen Huang addressed concerns about the availability of its new Blackwell chips, assuring investors that supply will increase as manufacturing ramps up. Nvidia’s stock had already risen 160% this year as it became the third most valuable company in the world, with a market value of $3.1tn. The sudden drop in its share price wiped more than $100bn from its stock market value.
Klarna cuts back
Buy now, pay later firm Klarna is using significant cost-cutting measures through the increased use of AI. The company plans to reduce its workforce of 3,800 by nearly half, focusing on roles in marketing and customer service. This strategic move has already yielded positive results, with average annual revenue per employee increasing by 75% to $700k since the company began investing in AI. Klarna's CEO, Sebastian Siemiatkowski, emphasised the company's ability to achieve more with less through the effective use of technology. Klarna - which is based in Sweden, and has two UK offices - is preparing for a potential stock market listing with its investment in AI and focus on efficiency are likely to be attractive to investors.
Ikea tries second-hand
Ikea is launching an online marketplace for buying and selling used Ikea products. The platform, called Ikea Preowned, is currently being piloted in Madrid and Oslo. This initiative aims to capitalise on the growing second-hand furniture market, estimated to be worth $34bn. By facilitating the resale of used Ikea products, the company can strengthen its brand loyalty and potentially drive additional sales. Just like eBay or Facebook Marketplace, users upload pictures of a product and name their price. Buyers can then pick up the furniture directly from sellers, who are given the choice between cash or an Ikea credit for the amount plus a 15% bonus.
Elsewhere...
Leaving Brazil: X, formerly Twitter, has been banned in Brazil after failing to meet a deadline set by a Supreme Court judge to name a new legal representative in the country.
Flexible working: Employers will have to offer flexible working hours - including a four-day week - to all workers under government plans.
Staying alive online: Ted Baker is set to make a return as it relaunches its online business after a deal was struck by its US brand owner.
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