tech
February 26, 2026
Have we seen peak pricing power for Nvidia chips?
Investors may be concerned that a more balanced supply-demand environment could pressure Nvidia's ability to sustain elevated margins.
TL;DR
- Nvidia's fiscal fourth-quarter results surpassed Wall Street's revenue and earnings expectations.
- Shares initially rose in after-hours trading but later fell, influenced by the CFO's comments on inventory.
- Demand for Nvidia's advanced AI chips has outstripped supply, allowing price increases and margin expansion.
- The CFO noted an 8% quarter-over-quarter rise in inventory and supply commitments through 2027.
- Investors are concerned that increased supply could reduce Nvidia's ability to maintain high gross margins.
- Nvidia projects near-term gross margins to remain stable, but questions linger about their long-term durability beyond 2027.
- The broader semiconductor sector is also experiencing pressure, with the PHLX Semiconductor Index declining.
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