Nvidia Stock Drops as Earnings Loom Amid Rising Costs

Nvidia's stock price plummeted last week as investors focused on the upcoming earnings report that will reveal details about the company's revenue and profitability growth. The drop comes ahead of news that Nvidia is hiking its GPU prices, a move expected to boost revenues in the foreseeable future.

The price hikes, which mostly affect products shipped in 2028, are intended to help Nvidia offset rising costs, including memory and server expenses, according to Bloomberg. This increase may encourage customers to front-load purchases before the price jumps take effect.

However, analysts warn that these hikes carry risks, such as a potential shift by customers towards internal chips or alternatives. Top semiconductor firms like Cerebras, Etched, and AMD are boosting their AI chip production, while companies like Amazon, Microsoft, and Google are also working on improving their own Trainium, Maia, and TPU chips.

Nvidia's earnings report is expected to show revenue growth of 96% last quarter, with analysts predicting $92 billion in revenue. The company typically beats forecasts, so actual figures may be even higher, possibly exceeding the guidance for the third quarter.