Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at the IEA’s record oil release as the Iran war rages, Revolut finally securing a full UK banking licence, and Meta unveiling in-house AI chips in a bid to cut costs.
But first, our number of the week…
$2,116
That was the cost of a round-trip ticket from Singapore to London this week, up by nearly triple from last month. High oil prices and rerouted flights are leading to soaring ticket costs in many regions.
Sidekick Takeaway: When oil prices spike, it’s easy to focus on energy markets. But the real impact for most people shows up in everyday costs like flights, fuel, and food, potentially leading to lasting price pressures.
Only have a minute to read? Here’s the TL;DR:
In an effort to curtail surging market prices, the International Energy Agency approved a record release of 400 million barrels of oil as the Iran war rages. But with Gulf production cut by 10 million barrels per day and exports at less than 10% of pre-war levels, analysts warn the move may only provide a temporary cushion.
Revolut has finally won a full UK banking licence after first applying in 2021, allowing it to offer FSCS-protected deposits and lending products to its 13 million UK customers. The fintech has committed £3 billion to UK expansion and recently applied for a US licence in a bid to compete with legacy peers.
Meta announced four new proprietary AI chips set for deployment by the end of 2027, joining Google, Amazon, and Microsoft in the push for custom hardware. JPMorgan estimates custom chips will account for 45% of the AI chip market by 2028, currently dominated by Nvidia.
It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.
Crude Awakening: IEA Launches Record Oil Release as Iran War Rages
Last week, we discussed how the war in Iran has effectively shut the Strait of Hormuz – the narrow waterway through which roughly 20% of the world’s oil flows.
That closure has triggered a sharp spike in oil prices. But global officials aren’t standing idly by.
On Wednesday, the International Energy Agency responded with its biggest-ever intervention: a coordinated release of 400 million barrels of emergency oil from 32 member states.
However, even such a massive intervention may fail to meaningfully contain price rises.
Record intervention vs. record disruptions
While the scale of the IEA’s intervention is historically unprecedented, so too is the scale of market disruption:
The IEA’s action more than doubles the 183 million barrel release coordinated in 2022 after Russia’s invasion of Ukraine.
However, Gulf producers have cut production by at least 10 million barrels per day, with exports from the region running at less than 10% of pre-war levels.
Analysts remain sceptical that the IEA’s interventions will have a meaningful impact. Investment manager Carlyle warned that no policy response can halt crude’s ascent, with supply chain damage set to take months to unwind.
Markets appeared to agree. Oil prices briefly dipped on the announcement before climbing back above $90, suggesting traders see the release as a temporary cushion rather than a lasting fix.
Sidekick Takeaway: If oil prices remain elevated for an extended period, the knock-on effects for inflation, consumer spending, and monetary policy could be significant. The uncomfortable truth is that until shipping resumes through the Strait of Hormuz, oil markets will remain hostage to the trajectory of the war.
Licence to Bank: Revolut Finally Wins UK Banking Approval
For much of its existence, Revolut has been one of Britain’s most popular financial apps – but it was never technically a bank.
The company first applied for a UK banking licence back in 2021. After a lengthy regulatory process, it was granted a restricted licence in July 2024.
This week, officials finally lifted those restrictions, allowing Revolut to launch as a fully licenced UK bank.
The milestone is significant – not just for Revolut, but for the UK’s broader fintech landscape.
From fintech app to full-service bank
Having secured a full-service banking licence, Revolut is now able to compete on a level playing field with legacy peers:
Revolut’s 13 million UK customers will benefit from FSCS deposit protection of up to £120,000 per person, and will gain access to lending products already available in Europe.
The company, valued at $75 billion, has committed £3 billion to UK expansion and recently applied for a US banking licence.
Traditional lenders are watching closely. Barclays’ CEO has previously argued that Revolut actually benefited from lighter regulatory obligations.
Regardless, regulatory parity means that fintechs and high street banks compete on service and value, rather than differences in oversight.
Sidekick Takeaway: Revolut’s journey from payments app to licenced bank mirrors the broader maturation of UK fintech. For legacy banks, that maturation means that regulatory moats are no longer sufficient to stave off digital challengers.
Off The Old Block: Meta Builds New Chips to Cut AI Costs
For the past few years, Nvidia has been the undisputed kingmaker of the AI boom.
The firm’s chips power the vast majority of AI workloads – but they come at a cost. A single high-powered Nvidia GPU can easily exceed $30,000.
This week, Meta announced four new proprietary chips designed to handle AI workloads in-house. All four are set for deployment by the end of 2027.
The move is part of a broader trend across Big Tech to cut costs through proprietary chips.
Big Tech’s push for chip independence
While Meta is the latest firm to unveil a custom chip roadmap, the company isn’t alone in its ambitions:
Google, Amazon, and Microsoft have all been developing their own custom AI processors for years. Google’s TPUs are already considered competitive with Nvidia’s offerings.
The motivation for in-house development is largely financial. Meta’s capital expenditure guidance for 2026 is over $115 billion, much of which is expected to flow to chipmakers like Nvidia and AMD.
JPMorgan estimates that custom chips will account for 45% of the market by 2028. That’s a significant shift in a market Nvidia currently dominates.
None of this means Nvidia is in immediate trouble – Meta itself recently signed multibillion-dollar chip deals with both Nvidia and AMD.
But the direction of travel is clear: the line between chip buyers and chip makers is blurring fast.
Sidekick Takeaway: For investors, the key question is whether custom chips will seize market share from Nvidia, or whether AI demand is growing so quickly that there’s room for everyone. For now, the market appears to be expanding fast enough to accommodate both.
Notices
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𝘗𝘭𝘦𝘢𝘴𝘦 𝘳𝘦𝘮𝘦𝘮𝘣𝘦𝘳, 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘴𝘩𝘰𝘶𝘭𝘥 𝘣𝘦 𝘷𝘪𝘦𝘸𝘦𝘥 𝘢𝘴 𝘭𝘰𝘯𝘨𝘦𝘳 𝘵𝘦𝘳𝘮. 𝘠𝘰𝘶𝘳 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘪𝘴 𝘢𝘵 𝘳𝘪𝘴𝘬 - 𝘵𝘩𝘦 𝘷𝘢𝘭𝘶𝘦 𝘰𝘧 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵𝘴 𝘤𝘢𝘯 𝘨𝘰 𝘶𝘱 𝘢𝘯𝘥 𝘥𝘰𝘸𝘯, 𝘢𝘯𝘥 𝘺𝘰𝘶 𝘮𝘢𝘺 𝘨𝘦𝘵 𝘣𝘢𝘤𝘬 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘯 𝘺𝘰𝘶 𝘱𝘶𝘵 𝘪𝘯.