Nvidia Makes Aggressive Move Ahead of Earnings

Key Points:

• Nvidia plans to raise prices by over 15% on many AI servers using its chips due to soaring memory costs amid strong data-center demand, signaling its strong pricing power ahead of upcoming earnings.
• The price hikes will affect systems with Grace Blackwell and next-generation Vera Rubin chips, with contract manufacturers informing major customers like Microsoft, Alphabet, and Oracle about the increases.
• Memory shortages and rising costs from suppliers such as Micron, Samsung, and SK Hynix are driving up AI server expenses, but Nvidia's ability to pass these costs to customers shows continued high demand for its technology.
• Nvidia reported $81.6 billion in revenue last quarter, with Data Center revenue up 92% year-over-year and a non-GAAP gross margin of 75%, while projecting similar strong results for the next quarter.
• Investors will closely watch Nvidia's upcoming earnings report on August 26 for insights on gross margin guidance, demand for new chips, supply chain status, and the impact of memory inflation on profitability.