I think the supply-chain rally has further to run, but leadership may shift from Nvidia to the bottlenecks.
Nvidia's $96.2bn quarter and 117% Data Center growth confirm that AI infrastructure demand is still accelerating. More importantly, Nvidia's supply commitments have surged to $279bn, primarily for memory.
That makes the margin pressure revealing. If scarce memory is expensive enough to compress Nvidia's margins, the same cost pressure can translate into pricing power for memory suppliers. DRAM and HBM demand already exceeds supply, strengthening the case for $MU and $SKHY. Connectivity and optical names can benefit too as ever-larger GPU clusters require more bandwidth.
I would therefore avoid chasing the whole basket after an earnings spike. Nvidia has proved the demand story; now I would watch whether orders and pricing confirm the second-order winners.
My preference: memory first, optical/connectivity second, NVDA on a pullback. The biggest risk is that today's enthusiasm prices in too much of tomorrow's earnings.
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- snuggix·09-09 13:02HBM ramp is probably slower than people expect, which keeps the pricing window open longer for memory. That margin squeeze on Nvidia says more than the revenue beat lolLikeReport