For most of the AI boom, Nvidia Corporation (NASDAQ:NVDA) margins moved in just one direction. That is about to change.
Soaring memory costs will push the company’s gross margins from 75% in the second quarter to 71%–72% in the fourth quarter. Nvidia expects margins to recover only after higher prices take effect in fiscal 2028.
But what caused the decline? An AI buildout so expensive that it inflates the cost of the components Nvidia needs to build its own systems.
That creates a new problem for the Santa Clara, California-based company: Demand is still overwhelming supply, but some of that scarcity is now working against it.
Memory Prices are Becoming Nvidia’s Problem
