Record growth, but a new problem
- Revenue hit $96.2B, up 106% YoY
- Data center revenue jumped 117% to $89B
- Next-quarter revenue is guided at $108B
- Yet gross margins are expected to fall from 75% to 71-72%
The culprit? AI’s biggest bottleneck
- Nvidia says memory scarcity is being driven by the AI boom itself
- HBM supply is tight across SK Hynix, Samsung and Micron
- Nvidia’s supply commitments jumped from $119B to $279B in just three months
- Inventory also climbed to $32B as it prepares for Vera Rubin
Now Nvidia wants customers to pay
- CEO Jensen Huang confirmed price increases early next year
- The move is key to getting margins back to 72-73%
- But the big question is whether customers will accept higher prices
This could be Nvidia’s biggest pricing-power test
- Hyperscalers like Google and Amazon have their own chips and can negotiate
- Smaller companies and enterprises have far fewer alternatives
- If Nvidia can pass on higher memory costs, its pricing power stays strong
The $279B bet
Nvidia is locking up scarce memory supply while asking customers to pay more for its chips. It is a huge bet that AI demand will stay ahead of supply.
Click to read full blog: Nvidia Q2 Earning 2026 (best quarter ever)- Why is Raising Prices