Puts puts puts baby
08-27 15:06

NVIDIA's record Q2 revenue of $96.22B (+106% YoY) and strong Q3 guidance of $108B prove that AI compute demand remains insatiable, but the temporary compression of gross margins to 71–72% in Q4 highlights the rising costs of HBM memory supply. Rather than signaling structural weakness, this margin dip simply reflects component pricing dynamics while the Vera Rubin architecture scales up for full production. Historically, NVIDIA has seen post-earnings profit-taking despite stellar beats, making the broader supply chain ecosystem—particularly memory partners like SK Hynix and Micron—the more compelling play for immediate upside as hardware rollout accelerates.

Nvidia Reclaims AI Narrative — But at What Cost to Gross Margins?
Nvidia's record quarter: revenue $96.221bn, +106% year-over-year and past the ~$93.6bn consensus, data center +117%, gross margin held at 75%. Rubin is accelerating toward full production, with Huang framing AI as the point where compute converts directly into revenue. The catch is memory: Q4 gross margin troughs at 71–72%, three to four points conceded to component costs. Shares +4% after hours, carrying memory, optical and cloud names along. Worth remembering the stock has fallen the day after earnings four quarters running. Does the supply chain rally from here?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • dimpy
    08-27 15:43
    dimpy
    HBM cost pressure probably lingers one more quarter, but the real swing factor is how fast Hynix and Micron capacity actually lands into Q4 shipments.
Leave a comment
1