Chief Financial Officer Colette Kress warned that extreme pricing for memory components will pressure profit margins through the end of the calendar year. Nvidia increased its supplier commitments to $279 billion from $119 billion last quarter to secure critical components after the magnitude of price increases exceeded prior expectations. GAAP and non-GAAP gross margins are 74% plus or minus 50 basis points for the third quarter and will bottom in the 71% to 72% range in the fourth quarter.
Supply will remain a bottleneck through at least the end of fiscal year 2028, with margins settling between 72% and 73% as price increases take effect in the first quarter. The company is currently facing supply constraints but will ship both Blackwell and Rubin systems in the future. Kress attributed current memory scarcity to the AI buildout, describing the tighter supply as a symptom of the demand surge fueling Nvidia's growth.
Key sources
- SOURCE@tradfi“EXPECT MARGINS TO BOTTOM IN Q4 IN 71-72% RANGE”x.com
- SOURCE@thetranscript_“The magnitude of the price increase has exceeded our prior expectations and is headed even higher into next year.”x.com
- SUPPORT@wallstengine“Memory scarcity today is being driven in large part by the AI buildout itself... tighter memory supply is a symptom of the same demand surge that’s driving our own growth.”x.com
- SUPPORT@stockmktnewz“Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory”x.com
- SUPPORT@firstsquawk“NVIDIA SAYS IT WILL BE SHIPPING BOTH BLACKWELL AND RUBIN SYSTEMS IN FUTURE AND IS CURRENTLY EXPERIENCING CERTAIN SUPPLY CONSTRAINTS”x.com