Srikas
08-28

NVIDIA: AI Growth Is Still Strong — But Margins Are the Question

NVIDIA continues to dominate the AI infrastructure story, with another record quarter highlighting just how strong demand for accelerated computing remains.

🚀 Key numbers:

• Revenue: $96.22B, up 106% YoY

• Data Center growth: +117% YoY

• Gross margin: around 75%

• Rubin is moving closer to full production

• Shares initially gained around 4% after hours

But there’s an interesting catch…

NVIDIA expects gross margins to come under pressure, potentially reaching the 71–72% range, largely because of higher component costs.

That raises an important question for investors:

Can NVIDIA maintain its extraordinary growth while protecting its margins?

The AI demand story clearly isn’t slowing down. The next generation of Rubin could create another major growth wave, but investors will be watching margins, supply-chain costs and execution very closely.

💭 My take: NVIDIA’s AI leadership remains extremely strong, but going forward, revenue growth alone may not be enough. The market could increasingly focus on how profitable that growth is.

Do you think NVIDIA’s supply chain and Rubin ramp can push the stock higher from here, or are margin pressures becoming a bigger risk?

Jensen Huang Drops a Number — Why Did AI Hardware Stage a Full Comeback?
Jensen Huang said Nvidia will ship twice as many chips next year as this year, and that AI safety matters but cannot be regulated the way social media was. AI hardware ran: AMD +6.36% to $545.09, Marvell +4.81% to $240.76, Nvidia +2.54% to $219.34, Broadcom +2.29% to $347.30, with the Philadelphia Semiconductor Index up over 3%. That is a third straight up session for chips, a rebound that started in the same week the slowdown argument was loudest. A week of talk finally has a number attached. But the number is the company's own forecast, not signed orders. Is one line enough to hold a rally?
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Comments

  • CuritisCissie
    08-28
    CuritisCissie
    A 3 to 4 point gross margin drop matters more than the revenue beat here. If Rubin ramps cleanly, the multiple can hold, but supply chain costs are starting to eat into the premium.
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