Nvidia's 70% Growth Guide Rocks Tech Industry, Hugging Face Deal Takes on New Meaning

Nvidia's latest quarterly earnings showed a staggering 70% revenue growth guide for the fiscal year ending January 2028, exceeding analyst expectations of 44%. This has significant implications for the tech industry as a whole. Analyst Rory O'Driscoll pointed out that every analyst model for hyperscalers had assumed explosive capex followed by normalization in 2027, but Nvidia's guide blows this theory to bits.

The 70% growth rate is unprecedented and suggests that individual positions within the tech stack are shifting rapidly. Rory outlined three possible failure modes: direct customers stopping compute purchases, circular financing deals failing, or end-user demand falling short of forecasts. However, the only real risk is the last one, which would be triggered by a significant drop in end-user demand.

Nvidia's $12.9 billion acquisition of Hugging Face is also being reevaluated in light of these developments. Rory framed it as a margin play against the labs, allowing Nvidia to sell more compute through open-source providers with lower gross margins. However, Harry Stebbings argued that this deal is more than just arbitrage and represents Nvidia's strategic push into open weights.