Good morning. On Fortune’s radar today:

Nvidia’s $366 billion asterisk.

Markets: Holding pattern.

Warsh speaks today—but will he say anything?

Target vs. Walmart: The most misleading chart in stocks.

Gap CEO Richard Dickson on where the chain went wrong: “Somewhere along the way, we lost the story and became more about the stuff.”

Europe’s vibe shift.

Kevin O’Leary (net worth $400 million) pays only $29 for his jeans.

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ONE BIG THING

Nvidia’s massive future spending commitments make its risk profile more complex, Saxo says

Charu Chanana, chief investment strategist at Saxo, is not suggesting that Nvidia is financing a circular bubble in AI. But in a recent email to Fortune, she also said she is not dismissing that possibility entirely.

Nvidia’s second-quarter earnings on Wednesday were stunning and helped lift the broader market on Thursday. Nvidia shares rose 8.74% yesterday. Still, Chanana says the company’s 10-Q also reveals a large set of future commitments and financing arrangements, while free cash flow fell from $48.5 billion last quarter to $21.3 billion this quarter.

The future commitments Nvidia lists in its 10-Q, on page 18, include:

• Supply and capacity commitments: $279 billion, up from $119 billion last quarter
• Cloud service agreements: $29 billion
• Data center leases: $25 billion
• Equity investments: $25 billion
• Capex commitments: $8 billion

Those items total $366 billion.

In addition, Nvidia disclosed $56 billion in AI-cloud and third-party lease commitments, land and power guarantees of $108.5 billion, and memorandums of understanding with various finance providers for “more than $500 billion of third-party capital over time,” according to the 10-Q.

Even if some of those figures overlap, the amounts are still substantial for a company that generated $96 billion in revenue in the last quarter, and they show how far Nvidia’s business has expanded beyond just selling chips. As the AI buildout has accelerated, investors have been watching not only demand for GPUs but also the financing, leasing and infrastructure arrangements that help support that demand.

Nvidia is growing quickly, and planning ahead is necessary. The company is also profitable. But Chanana said the future commitments “also make the company’s risk profile more complex. Investors increasingly need to consider customer credit quality, leases, guarantees, revenue-sharing agreements and Nvidia’s equity investments—not just GPU shipments. This does not automatically make the revenue circular. It does mean Nvidia is increasingly helping to create and finance the ecosystem into which it sells.”

Nvidia Insists It Can Keep Printing Money to Fund the AI Boom - WSJ

Nvidia Shares Add $442 Billion, Second-Biggest Gain of All Time - Bloomberg

THE MARKETS

Stocks on hold as traders wait for Warsh

The S&P 500 is back within 1% of its all-time high, boosted by Nvidia and other technology stocks. The equal-weight index fell yesterday, while the Nasdaq 100 rose 1.43%. Asia was mixed today, Europe was slightly higher, and U.S. futures were flat as investors waited for clues on interest rates from Fed Chairman Kevin Warsh’s speech later today.

S&P 500 futures were flat this morning. The index rose 0.72% yesterday.

In Europe, the Stoxx 600 was up 0.55% in early trading and the U.K.’s FTSE 100 was up 0.2% before lunch.

In Asia, South Korea’s KOSPI fell 1.79%. Japan’s Nikkei 225 gained 0.41%. India’s Nifty 50 was up 0.1%. China’s CSI 300 declined 0.46%.

Brent crude was at $88 per barrel this morning.

Bitcoin was at $79.4K.

Fed’s Warsh will speak today. Whether he will say anything is anyone’s guess.

Fed Chairman Kevin Warsh is scheduled to deliver his annual Jackson Hole speech at 10 a.m. today. Because he has said the Fed should not be guiding markets, there is plenty of speculation about how he can communicate without giving too much away.

“Amidst the toasting of marshmallows at the Jackson Hole summer camp for economists, there are some hopes Federal Reserve Chair Warsh will offer a sensible structure for thinking about U.S. monetary policy,” UBS’s Paul Donovan said in an email this morning. “Warsh’s communication style, telling investors ‘you figure it out,’ is not working, creating uncertainty and introducing an unnecessary risk premium into financial markets.”

The most misleading chart in stocks: Target vs. Walmart

Over the last 12 months, Target’s stock has beaten Walmart’s, as this chart shows.

But timing matters, and the last 12 months are historically unusual. If you had bet on Target before that period, especially over the past five years, you would have lost money while Walmart investors did well.

MORE FROM FORTUNE

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Bridge founder Zach Abrams sees an opportunity for ‘tokenized local currencies’ across Asia - Angelica Ang

The $40 trillion national debt is growing while Social Security goes broke—because wealthy Boomers are collecting over $100k in benefits per year - Joshua Hong

MIND THE GAP

Can The Gap get it back?

The Gap’s heyday was about 20 years ago, when its stores were everywhere and nearly everyone wore its T-shirts and jeans. Since then, the company has been in what has often seemed like a never-ending turnaround. By the 2010s, the brand had lost momentum, sales were falling, and the company closed hundreds of stores. Before Richard Dickson became CEO in 2023, Gap Inc. had cycled through five CEOs in five years.

There are signs the brand is improving. In the first quarter of this year, comparable sales rose 10%, and they have been increasing for two years. Even so, the brand generated $3.5 billion in sales last year, while the company as a whole brought in $15.4 billion. That means Gap remains about half its size at its early-2000s peak.

“I’m really fascinated with brands that had a cultural impact then lost their way. I love a good turnaround,” Dickson told Fortune’s Phil Wahba in a conversation about how the company is trying to win back customers.

CHART OF THE DAY

Europeans are unexpectedly upbeat, unlike their American cousins

GDP growth in the euro currency area was 0.4% in the second quarter, stronger than expected. Despite two wars, a heatwave, a drought, and a burst of inflation, Europeans are surprisingly upbeat about themselves, ING’s Marieke Blom wrote recently.

The White House may believe Europe faces “civilizational erasure,” but Europeans arguably feel better about themselves than Americans do right now. The chart compares whether people in Europe feel “European” with the share of Americans who are proud to be American. Those measures are not directly comparable, but the contrast is still striking.

American self-confidence has slipped. More than 80% of Americans said they were proud in 2010, but only 53% say so today.

NUMBER OF THE DAY: Population decline

-33%

That is the expected decline in South Korea’s working-age population by 2050, the largest among declining nations. By contrast, Africa’s population is forecast to grow 82%, with major implications for government tax bases, EY-Parthenon Chief Economist Gregory Daco wrote recently.

“By 2050, Japan and South Korea are projected to have around 80 people aged 65 or older for every 100 working-age individuals, up from roughly 54 and 31, respectively, in 2025. The ratio is expected to approach 80 in Spain and 74 in Italy. China’s is projected to more than double, from around 22 to 47, while the increase in the United States is more moderate, from roughly 33 to 40.”

THE FRONT PAGES TODAY

Anthropic wins legal battle with Pentagon in California - FT

Iran says return to diplomacy ‘isn’t impossible’ — but all Mideast wars must end to reopen Hormuz - CNBC

Dems plan bill to counter Trump's "Lake America" order - Axios

Corporate America Cut Big Checks to Trump. Now CEOs Fear Subpoenas Are Coming. - WSJ

Thieves Snatch $4 Million Necklace From Vienna Museum - Bloomberg

C.I.A. Chief Delivered Bleak Assessment of Russia’s War in Secretive Moscow Visit - NYT

Trump admin set to target George Soros nonprofit, Southern Poverty Law Center and CAIR in major tax crackdown: sources - NY Post

ONE MORE THING

Despite having a net worth of $400 million, Kevin O’Leary still shops at Walmart for $29 jeans

With an estimated net worth of $400 million, Kevin O’Leary could easily avoid cooking, cleaning, or grocery shopping for himself. But the Canadian businessman and Shark Tank investor still likes saving money, even when the savings are small, Fortune’s Preston Fore writes.

“I’m always looking for a great deal, that’s why I’m in Walmart,” he said in a recent Instagram video. “You know those fantastic black jeans I’m always wearing? That’s right—Walmart special, 29 smackaroos. That’s how you save dough.”

The 72-year-old said his wife sent him to buy essentials including batteries, butter, paper towels, and OxiClean laundry spray, and he did not want to waste the trip.

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