They guided $16 billion when the street was still trying to digest $13.5 billion.
Thesis: This isn't a chip cycle; it's a $1 trillion infrastructure replacement event. NVDA isn't just selling chips; they are selling the only viable ticket to the generative AI show. With margins expanding to 72.5% alongside volume, they have total pricing power. The 'capacity ceiling' bear thesis is dead on arrival when guidance implies another massive sequential jump.
Verdict: LONG — Conviction: HIGH
Catalyst: L40S ramp bypassing CoWoS constraints and GH200 entering full production to capture the next wave of hyperscale spend.
Key Risk: China export controls (20-25% of Data Center revenue) hardening into a permanent ban before non-China demand can fully absorb the allocation.
The Tell: Colette explicitly stated L40S 'is not limited by [indiscernible] supply.' This confirms the strategic pivot to sell non-CoWoS chips (GDDR6 based) to enterprise customers to bypass the H100 manufacturing bottleneck and keep the growth narrative alive.
Friction Level: MODERATE_FRICTION — Bears argue CoWoS capacity creates a hard revenue ceiling; Management just raised that ceiling by $2.5B sequentially.
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