Nvidia Faces Data-Center Growth Hurdles Amid Rising Memory Costs

NVIDIA's Rubin Ramp: The Margin Test

Nvidia is set to report its earnings, and analysts are closely watching for signs of growth in its data-center business. According to a recent interview with analyst Rasgon, Nvidia's Rubin platform is expected to drive significant revenue growth in the coming years.

Rasgon estimates that data-center revenue could reach close to $500 billion next year, based on his analysis of build plans. This figure implies a three-year total of over $1 trillion for Nvidia's business. However, Rasgon also notes that gross margins may be impacted by rising memory and wafer prices.

Nvidia's partnership with Micron Technology is seen as crucial in addressing these concerns. The two companies co-design memory for AI infrastructure, which could help mitigate the effects of increasing memory pricing on Nvidia's gross margins. Similarly, Nvidia's long-standing collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) may also play a role in managing wafer costs.

The analyst is watching these developments closely as he looks for signs that Nvidia can maintain its mid-70s gross margin levels despite rising input costs. The company will report its earnings soon, and investors are eagerly awaiting the results to gauge the success of its Rubin platform.