Market Overview

Dear Investor,

This week has been dominated by earnings from the world’s most expensive company, Nvidia. The AI poster child once again delivered results that most businesses could only dream of, with revenue up 56% year on year and net income jumping close to 60%. Management guided above expectations for the current quarter, though they chose to leave China chip sales out of the forecast while export rules are still being clarified. Despite that note of caution, the market reaction was measured. Nvidia’s shares remain comfortably within their recent trading range and sit less than 3% from all-time highs.

Outside China, demand remains exceptional. Data centre sales now account for nearly 90% of revenue, and the latest generation Blackwell Ultra chips are already ramping into production. Jensen Huang struck a typically bullish tone, pointing to a global AI race that is still only just getting started. The big hyperscalers have doubled capital spending to around six hundred billion dollars a year, and governments from Europe to the Middle East are rolling out sovereign AI programmes. The scale of future demand is hard to ignore.

Valuation is of course stretched, with Nvidia trading at more than thirty times sales and close to forty times forward earnings. That leaves little room for error, but the company’s track record of execution continues to reassure the market. A new sixty billion dollar buyback adds another layer of support, and with free cash flow generation running at extraordinary levels, few companies can match its financial firepower. For UK investors watching from afar, Nvidia remains a defining stock of the cycle, even if portfolio discipline is essential at these heights.

What matters for the broader market is that Nvidia’s results helped steady the ship at a sensitive moment. The S&P 500 pushed to fresh record highs this week, underlining how central AI has become to sentiment. For all the debate about valuation and policy risk, the structural tailwind remains firmly in place. Nvidia’s update may not have been explosive, but it did enough to keep the market narrative intact.

Wishing you a fantastic weekend,

Tom

Market Movers

On the rise: Empire Metals (AIM:EEE) + 39.7% on the week

Shares in AIM-listed miner Empire Metals have been surging higher in recent weeks following a drilling update on 18^th August at its Pitfield titanium project in Western Australia. The company announced outstanding assay results from the Thomas prospect, including multiple intercepts above 6% titanium dioxide across a 3.6 kilometre strike length. Nearly two thirds of drillholes averaged more than 4% titanium dioxide, with over 90% exceeding a 2% cut-off grade.

Further news this week added to the momentum, with the company reporting a breakthrough in metallurgical testwork. Results showed Pitfield’s weathered ore could be processed using conventional methods, achieving recoveries of around 67% and producing a high-purity titanium dioxide product grading 99.25%. Empire said this confirmation of processing suitability provided a clear pathway toward commercial development.

REGENCY VIEW:

Empire Metals is still firmly in the exploration stage with no revenues on the books, which explains the stretched valuation ratios and low quality metrics. For now the whole story rests on Pitfield, where drilling and metallurgical work have pointed to a giant titanium system and a processing route capable of producing a high-purity product.

On the slide: PPHE Hotel (LSE:PPH) -21.8% on the week

Shares in Park Plaza Hotels owner PPHE Hotel dropped sharply this week following the release of a disappointing set of interim results. The Group reported total revenue of £199.9 million for the six months ended 30 June 2025, representing an increase of 4.7% compared with the previous year. However, despite improved occupancy levels, margins remained under pressure as normalising room rates and higher social security costs weighed on profitability. Reported EBITDA fell by 5.7% to £45.5 million, while like-for-like EBITDA declined by 4.9%. Adjusted EPRA earnings per share also slipped, down 4.8% to 119 pence over the last 12 months compared with 125 pence at the end of 2024.

Looking ahead, PPHE reaffirmed its expectation that the new pipeline of recently opened properties will generate at least £25 million of incremental EBITDA once stabilised. However, the Group cautioned that short-term profitability will continue to be affected by lower contributions from art’otel London Hoxton, as its opening is being phased in line with long-term performance goals. The Board also noted potential cost headwinds in 2026 and beyond, including possible changes to VAT rates on hotels in the Netherlands and UK business rates.

REGENCY VIEW:

PPHE continues to grow its footprint with new openings in London and Rome alongside strategic acquisitions that expand its development pipeline. While revenues are rising, margin pressure from higher costs and phased hotel ramp-ups means the immediate focus remains on efficiency and stabilisation before the expected earnings uplift from new properties comes through.

Sector Snapshot

After finishing last week at the bottom of the pile, Energy staged a strong rebound to lead the market, with Materials also posting healthy gains. Tech and Telecom added modest support, leaving the leadership concentrated in cyclical and resource-linked sectors rather than the defensives that dominated previously.

On the flip side, Healthcare and Consumer Staples, which were last week’s stars, dropped to the weakest performers, joined by Utilities in negative territory. Financials and Real Estate also drifted lower, underscoring a clear rotation away from margin protecting defensives and back into areas more exposed to the economic cycle.

UK Price Action

The FTSE’s breakout fizzled this week as the index gave back more than half of its recent gains. The pullback has been controlled, bringing prices back to the top of the old range where broken resistance will now be tested as support.