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Nvidia Lowers Margin Guidance Amid Surging Memory Costs
Electronic Technology · Semiconductors · yonhap_finance · 2026-08-26
Nvidia has lowered its gross margin outlook as rising memory chip prices, driven by intense AI infrastructure demand, pressure the company's profitability.
What Happened
Margin Guidance Adjustment: Nvidia has lowered its gross margin guidance for the third quarter of fiscal 2027 to 74%, stepping back from its previous goal of maintaining margins in the mid-70% range. The company anticipates a further dip to 71-72% in the fourth quarter before stabilizing.
Impact of Memory Costs: The downward revision is directly attributed to the sharp rise in memory semiconductor prices, particularly for High Bandwidth Memory (HBM). Management noted that the current supply tightness is a direct symptom of the massive demand for AI infrastructure development.
Pricing Strategies: To mitigate margin pressure, Nvidia plans to increase prices for its next-generation AI server platforms, including the 'Vera Rubin' architecture, by over 15%. The company is also focusing on cost optimization, production cycle improvements, and product mix adjustments to protect profitability.
Future Outlook: Looking ahead to fiscal 2028, Nvidia expects gross margins to stabilize between 72% and 73%. CFO Colette Kress emphasized that the memory supply constraints are an inherent byproduct of the rapid growth in AI demand that the company is currently experiencing.