- A high and stable gross margin signals that Nvidia maintains pricing power in the AI chip market, despite growing competition from AMD, Intel, and custom AI chips from Google, Amazon, and Microsoft.
- Wall Street closely watches Nvidia’s gross margin to assess whether its dominance in AI hardware translates to sustained profitability and efficiency.
What to Expect in Nvidia’s Q4 Earnings (Feb. 21, 2024)
- Gross Margin Forecast: Analysts are expecting adjusted gross margins of around 75%.
- If margins stay strong or increase → Nvidia is still firmly in control of AI chip pricing.
- If margins decline → It signals rising competitive pressure and potential price cuts.
Is the AI Party Over?
- Not Yet: Nvidia’s AI business remains dominant, with hyperscalers like Microsoft, Google, and Meta still heavily reliant on its GPUs.
- But Risks Are Rising: If Nvidia’s margins decline due to competition or excess inventory, investors might rethink its sky-high valuation.
🚀 Bottom Line: If Nvidia’s gross margin remains strong or improves, the stock could keep rising. If it weakens, investors may take profits, causing a sell-off.
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