Nvidia News
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It's a school day!
Nvidia is moving its future AI data centres towards an 800V power architecture, and the reason is pretty simple: the amount of power these systems need is getting ridiculous.
Today's AI racks typically use much lower-voltage power distribution(sub 60V), but as Nvidia moves towards racks needing hundreds of kilowatts, and eventually around 1MW(that's super massive-1 rack using the power of 600 houses!), the amount of current required becomes enormous. At 800V, you can deliver the same amount of power using far less current.
That brings some pretty big benefits. You need less copper, thinner cables and smaller busbars, which saves space, weight and cost. More importantly, lower current means much lower electrical losses, because resistive losses rise with the square of the current. So there is less energy wasted as heat.The 800V approach should also allow Nvidia to simplify the power chain, with fewer stages of voltage conversion. That improves efficiency and reduces the amount of power infrastructure taking up valuable space in the rack, so they can stuff more GPUs inside
Ultimately, it's about making much more powerful AI systems practical. As racks move towards 500kW and eventually 1MW, the old architecture becomes increasingly difficult to manage. 800V gives Nvidia a much more scalable way of delivering all that power efficiently.
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What do we think these boys will report on Wednesday?
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Record numbers
Revenue hard to say really however several tail winds. Blackwell yet to peak/firing. Vera Ruben mass production.
Demand exceeds supply
China H200 albeit modest.I think they could report close to $95B. The Guide will be at least +$10B over the reported Nr.
I think the QoQ rhythm is now in the range +$15B. If you go back we predicted $100B quarters by end of 26-early!Margins 75-76%. The transition to Ruben will always see a small initial margin compression due to yield. Corrects back end of the year.
Operating Margin 62%
Net income margin circa 55% (tax paid earnings margin)Nvidia has trailing growth rate of 80% and a realistic fwd of 45-50% over several years.
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Ignoring any revaluation of investments-operationally we expect the following when Nvidia report fiscal Q2 earnings after the close tonight! Expect Jensen to say Vera Ruben is in full production and demand for it is the highest in their history+ Blackwell has yet to peak.
Our expectations
Revenue $95–96B
Gross margin 75–76%
Operating margin ~65%
Operating income ~$62B
Underlying net income ~$51-53B (EPS $2.12-$2.15) excluding MTM on investments
Q3 revenue guidance $107–108B
In summary:
$95–96B revenue / 75–76% GM / ~65% operating margin / ~$62B operating income / ~$50B underlying net income / $107–108B Q3 guide.
For reference, current market expectations are around $92B for Q2 and $104B for Q3, so this would be a clear beat+raise -
So the naysayers will obviously state that the bubble will burst soon as they only made 62B
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Results are as noted above. 96b revenue. Margin check. Guide, check.
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Here is the result-it's fantastic and way better than consensus.
Revenue CHECK
GM CHECK
Operating Income 64b (+2)
Net Income 54B-
The guide was $108B CHECK!
100% growth people and a sub 20 multiple.And the icing on the cake. Nvidia said it is facing “extreme” memory costs and supply constraints, which are affecting its gross margins. Reports from the call say Nvidia expects those costs to pressure margins into the next quarter. Micron popped $30 AH. Nvidia $9-$10
Im not concerned about Nvidia margins as they intend raising prices 15% in Jan 27
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the CFO said they expect 70% revenue growth in fiscal 2028
would be 100% if not constrained. -
NVIDIA–AMAZON: MAJOR EXPANSION OF AI INFRASTRUCTURE DEAL
NVIDIA and Amazon Web Services have dramatically expanded their AI partnership, with AWS committing to deploy an additional 2 million NVIDIA GPUs across its global infrastructure during 2027–28. This is on top of the more than 1 million NVIDIA GPUs already committed by AWS, taking the total deployment to more than 3 million GPUs.
While the financial terms have not been disclosed, a reasonable estimate is that the additional 2 million GPUs could represent $70–100bn or more of hardware, once the GPUs, networking, NVLink, memory and complete NVIDIA systems are included. The overall AWS commitment could therefore ultimately represent well over $100bn of NVIDIA-related infrastructure spending.
Importantly, this is not simply a GPU purchase.The expanded relationship covers NVIDIA's Blackwell Ultra, Rubin and Rubin Ultra platforms, Vera CPUs, networking, software and NVLink, with Amazon also becoming the first collaborator on NVIDIA's next-generation custom high-bandwidth memory technology (custom memory as mentioned by Micron only weeks ago).
For NVIDIA, the announcement provides exceptional visibility into future demand and is another powerful confirmation that hyperscaler AI investment remains enormous. AWS is effectively doubling down on NVIDIA despite continuing to develop its own Trainium chips.
The key takeaway: more than 3 million NVIDIA GPUs committed to AWS, with the incremental commitment alone potentially worth around $100bn once the complete infrastructure stack is included. -
The facts are that Nvidia is increasing its market share across the entire AI infrastructure. So despite 'news' of various competitors and partners developing new XPU/Asics etc, Nvidia is becoming more embedded within the stack. Jensen commented on OpenAi's Jalapeno, saying 'he's pleased for his partners and wishes then every success-we didn't wake up losers'.
If you look at their latest results, their revenue is 10X the size of AMD and almost 30X the net income! Nvidia generate AMDs annual profit in 21 days(and falling). And the bit that most have forgotten, AMD has given away 20% of the entire company to its customers(for zero $) just to get them to buy their product.
Long live the King