Puts puts puts baby
09-10

Despite delivering another record-breaking quarter with $96.221 billion in revenue (+106% YoY) driven by massive data center demand (+117%) and the acceleration of its next-gen Rubin architecture, Nvidia’s post-earnings stock weakness reflects growing margin anxiety and a consistent pattern of post-release sell-offs. High memory component costs are projected to squeeze Nvidia's gross margin down from 75% to a trough of 71%–72% in Q4, signaling that supply chain inflation is temporarily outpacing pricing power. However, this near-term margin pressure on the primary chipmaker directly benefits memory and optical suppliers who are capturing those increased component dollars, creating a classic supply chain rotation. For investors, buying Nvidia right on the earnings headline carries historical risk given its four-quarter trend of initial sell-offs, but the broader rally in underlying memory and cloud infrastructure names offers a compelling pick-and-shovel entry point as compute continues to directly convert into enterprise revenue.

Can Telecom AI Become Nvidia's Next Data-Center Moment?
Nvidia rose 2.54% after Jensen Huang outlined an AI economy spanning energy, compute, AI factories, models, and applications, with telecom networks potentially extending compute to the edge. Nvidia is also expanding packaging, testing, substrate, and optical capacity with partners including Samsung and Amkor. Bulls see broader demand and supply-chain resilience; bears warn capacity takes time to generate revenue. Can telecom-edge demand matter before new packaging capacity comes online?
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Comments

  • EllisBird
    09-10
    EllisBird
    Memory suppliers look helped here, but that usually shows up near the top of the cycle. If Nvidia margin bottoms cleanly, a lot of that supplier upside may already be priced in lol
  • MorganHope
    09-10
    MorganHope
    Rubin pulling forward matters way more than a 3 point gross margin dip. 117% data center growth still says demand is outrunning the supply chain
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